The establishment of the Company of the Philippines, in 1785, gave to monopoly another shape, but led to some development of colonial industry.
It is scarcely needful to follow the history of the commerce of the Philippines through the many changes which have produced its present comparative prosperity—a prosperity to be measured by the amount of emancipation which has been introduced. Had the Spanish authorities the courage to utter the magic words “Laissez faire, laissez passer!” what a cornucopia of blessings would be poured upon the archipelago!
But it could hardly be expected from a government constituted like the government of Spain, that, either of its own spontaneous movement, or by licence delegated to the Captain-General, so grand a work would be accomplished as the establishment of free production, free commerce, free settlement, and free education in the Philippines; and yet a step so bold and noble would, as I fully believe, in a few years be followed by progress and prosperity far beyond any calculations that have been ventured on. The little that has been hazarded for the liberty of trade, though hurriedly and imperfectly done, cannot but encourage future efforts; and in the meantime many beneficial reforms have been pressed upon the attention of the government with such conclusive statistics and irresistible logic, that, if it depended on these alone, the Philippines might hope to enter upon the early enjoyment of their heritage of future advancement. The reform of the tariffs—the removal of petty vexatious fiscal interferences—improvements in the navigation of the rivers—the cleansing the harbours—lighthouse, buoys and other appliances for the security of shipping—are among the more obvious and immediate claims of commerce. In Manila the absence of docks for repairing and harbouring vessels is much felt; the custom-house is on the wrong side of the river—though it were better it should exist on neither side; there are no means of regular postal communication with the islands from the Peninsula; tug-steamers, life-boats, quays and piers, seamen’s houses, marine hospitals, are wanting, but their introduction has been so strongly advocated that its advent may be hoped for. In truth, it is pleasant to find in a country so remote and so long under the most discouraging and retarding influences, that inquiry, which is the pioneer and the handmaid of all improvement, is already busily at work and will not be at work in vain.
A communication was made to the Chamber of Commerce by the Governor-General in 1858, requesting that the merchants would point out to him the best possible means for developing the riches of the Philippine Islands by extending their foreign trade. The British merchants, after expressing a general wish that the islands should enjoy the benefits of that system of free trade and liberal commercial policy whose “great results” are manifest to all, point out the special grievances which demand immediate reform.
1. The present system of requiring permits for every cargo boat employed, leads to many needless charges, vexations and delays.
2. Reform of the tariffs which press very heavily on certain articles, for the protection of some small manufacturing interest in the island. This is specially the case with cotton goods intended for common use; those of the colours given by dyes produced in the island are selected for the heaviest impost, to give encouragement to native dyers. Many articles are estimated much beyond their real value, so that the percentage duty becomes excessive. Lawns, for instance, are tariffed at double their market price. Iron chains worth five dollars per cwt. are tariffed at twelve dollars. A small quantity of white, black, blue, purple and rose-coloured cotton twist being produced, there is a duty of from 40 to 50 per cent., while red, yellow, green, &c., which the natives cannot dye, are admitted duty free. These are striking exemplifications of the workings of a protective system.
Other blue goods are prohibited because the islands produce indigo; and for the protection of the native shoemakers (who, by the way, are almost invariably Chinese and mere birds of passage in the country), foreign boots and shoes pay from 40 to 50 per cent., to the great detriment of the public health, for the country-tanned leather will not keep out the rain and the mud, while the protective duty encourages the Chinese settler to become a manufacturer, who is less wanted than the agricultural labourer. In the same spirit the tailors are protected, i.e. allowed to overcharge the consumer to the extent of 40 to 50 per cent., the duty on imported clothes, which goes principally to the Chinese. Foreign fruits, preserves and liquors have to bear similar burdens, for cannot the Philippines give confectionary and sweets enough of their own? So runs the round of folly and miscalculation. One hundred dozen of Spanish beer entered the Philippines in 1857, and to protect and encourage so important an interest an excessive impost was levied on 350 pipes and nearly 100,000 bottles of beer not Spanish.
3. Then, again, the heavy differential duties in favour of Spanish ships are a well-grounded subject of discontent and highly prejudicial to the general interest. The levying tonnage duties upon ships entering and departing without cargoes is a grievance of which there are just complaints. The adjacency of so many free ports—Hong Kong, Macao and Singapore—and the more liberal system of the Australian and Polynesian regions, place the Philippine trade in a disadvantageous position. Among the documents which I collected is one from a native merchant, in which he says:—“The demonstrations of political economists, and the practical results of free-trade legislation, establish the fact that public credit and public prosperity are alike benefited by the emancipation of commerce, and narrow is the view which, looking only to the temporary defalcation of revenue from the diminution of imports, forgets the enormous increase of all the sources of revenue from lowering prices and extending demand.” In this way the great truths which have been silently and successfully revolutionizing our commercial legislation are spread on all the wings of all the winds, and will finally encircle the world in the great bonds of brotherhood, with peace and prosperity for attendants.
By a decree of the 18th June, 1857, the restrictions on the trade in rice and paddy were removed, and foreign grain was allowed to enter duty free, not, only into the ports opened to foreign trade, but into divers subordinate ports. Though the permission was then temporary, it has now become permanent, and I found that the emancipation of these important articles from all custom-house interference had been attended with the best results, by regulating and assimilating prices, without any detriment to native production. The more general the principles of free trade the more security will there be against dearth and famine on the one side, and superfluity and glut on the other.
Rice is sold by the cavan. Its price is ordinarily double that of paddy. The average fluctuations are from one to two dollars.