Slight concession to the Company.The company are considered in the same light as the rest of the merchants, in the graduation and payment of duties, on such goods as they sell out of their own stores for local consumption, to the Company, with the exemption only of the Board of Trade rate of 2% and 3%, on the exportation of silver, according to a special privilege, and in conformity to the 61st Article of the new royal decree of 1803.
Besides the duties above enumerated, there is another trifling one established for local purposes of peso merchante, being a rate for the use of the king’s scales, levied according to an extremely equitable tariff, on certain articles only of solid weight, such as iron, copper, etc. The raw materials as well as all kinds of manufactured articles, belonging to the Islands, are exempt from duties on their entry in the port and river of Manila; but some of the first are subject to the most unjust of all exactions, that is, to an arbitrary tax and to the obligation of being retailed out on board the vessels in which they have been brought down, and deliverable only to persons bearing a written order, signed by the sitting members of the municipal corporation. Among this class of articles may be mentioned the coco of Cebu and the wax and oil of the Bisayas, which are rated as objects of the first necessity.
Undervaluation of galleon goods.With regard to the respective duties on the cargo annually dispatched by the merchants of Manila to New Spain, the practice of galleon is tolerably well regulated. An extreme latitude is given to the moderate rates at which it is ordered to value the goods contained in the manifest, by which means these are frequently put down at only one-half of their original prime cost; the commission to frame the scale of valuations which is to be in force for five years, after which time it is renewed, being left to three merchants, and made subject to the revision of the king’s attorney-general (fiscal) and the approbation of the governor; consequently, such being the nature of the tariff on which these operations are founded, the 33⅓% to which the royal duties amount on the $500,000 stipulated in the permit, does not, in fact, affect the shipper beyond the rate of 15 per cent, in consequence of the great difference between the prime cost and valuation of the articles corresponding to the permit; or, what is the same thing, between the $500,000 nominal value, and $1,100,000 or $1,200,000, the real amount of the cargo in question. The most remarkable circumstance, however, is, that the officers of the revenue in Acapulco collect the above-mentioned 33⅓% in absolute conformity to the Manila valuation, and not according to the value of the goods in America, and without any other formality than a comparison of the cargo with the ship’s papers. In honor of truth, it ought to be further observed that, although the Manila merchant by this means seeks to exempt himself from the part of the enormous duties with which it has been attempted to paralyze the only commercial intercourse he carries on with New Spain, in every other respect connected with this operation, he acts in a sufficiently legal manner, and if at their return those vessels have been in the habit of bringing back near a million of dollars in a smuggled way, it must be acknowledged that it is the harshness of the law which compels the merchant to become a smuggler; for according to the strange regulation by which he is thwarted in the returns representing the proceeds of his outward operation, he must either bring the money to the Philippine Islands without having it declared on the ship’s papers, or be obliged to leave the greatest part of it in the hands of others, subject to such contingencies as happen in trade. As long, therefore, as the present limitations subsist, which only authorize returns equal to double the value of the outward-bound cargo, this species of contraband will inevitably continue. The governors also, actuated by the principles of reason and natural justice, will, as they have hitherto done, wink at the infraction of the fiscal laws; a forbearance, in fact, indirectly beneficial to them, inasmuch as it eventually contributes to the general improvement of the colony. Indeed, without this species of judicious condescension, trade would soon stand still for the want of the necessary funds to carry it on.
Unbusinesslike custom ways..... It will readily be acknowledged that, in like manner as the good organization of custom houses is favorable to the progress of general commerce, so nothing is more injurious to its growth and the enterprise of merchants, than any uncertainty or arbitrary conduct in the levying of duties to be paid by them. This arises out of the circumstance of every merchant, entering on a new speculation, being anxious to have, as the principal ground work of his combinations, a perfect knowledge of the exact amount of his disbursements, in order to be enabled to calculate the final result with some degree of certainty. Considered in this point of view, the system adopted in the Islands is certainly deplorable, since it must be acknowledged that the principles and common rules of all other commercial countries, are there unknown. For example; this year a cargo arrives from China or Bengal, and the captain turns in his manifest. The custom-house surveyors then commence the valuation of the goods of which his cargo is composed: I say they commence, because it is a common thing for them not to have finished the estimate of the scale and amount of corresponding duties, till the expiration of two, four, and not unfrequently six months. The rule they affect to follow, in this valuation, is that of the prices current in the market, and in order to ascertain what these are, they are seen going round inquiring in the shops of the Sangleys (Chinese), till at length, finding it useless to go in search of correct and concurrent data, in a place where there are neither brokers nor public auctions, they are forced to determine in an arbitrary manner, and as the adage goes, always take good care to see their employers on the right side of the hedge. The grand work being ended, with all this form and prolixity, the sentence of the surveyors is irrevocable. The bondsman of the captain, who, in the meanwhile, has usually sold his cargo and departed with a fresh one for another destination, pays in the amount of the duties, thus regulated by law.
Variations in valuations.The practical defects and injurious consequences of such a system as this, it would be unnecessary to particularize. It would, however, be less intolerable, if, once put in force, it could serve the merchant as a guide in the valuations of his property for a determined number of successive years. What, however, renders this assessment more prejudicial, is its instability and uncertainty, and the repetition of the same operation I have just described every year, and with every cargo that arrives; but under distinct valuations, according to the reports or humor of the day. Besides these great defects and irregularity, the Philippine custom house observes the singular practice of not allowing the temporary landing of goods entered in transitu and for re-exportation, as is done on the bonding system in all countries where exertions are made by those in authority for the extension and improvement of commerce in every possible way. Of course, much less will they consent to the drawback or return of any part of the duties on goods entered outwards, even though they are still on board the very vessels in which they originally came shipped. Beyond all doubt, the wrongly understood severity of such a system, has, and will, continue to prevent many vessels from frequenting the port of Manila, and trying the market, unable to rely on the same liberal treatment they can meet with in other places.
The areca-nut.The bonga, or areca-nut, is the fruit of a very high palm-tree, not unlike the one that bears the date, and the nuts, similar to the latter, hang in great clusters from below the protuberance of the leaves or branches. Its figure and size resemble a common nut, but solid, like the nutmeg. Divided into small pieces, it is placed in the center of a small ball made of the tender leaves of the buyo or betel pepper, lightly covered with slacked lime, and this composition constitutes the celebrated betel of Asia, or, as it is here called, the buyo, the latter differing from that used in India, inasmuch only as it contains cardamomom.
Buyo monopoly unsatisfactory.The government, anxious to derive advantage in aid and support of the colony, from the great use the inhabitants make of the buyo, many years ago determined to establish the sale of the bonga, its principal ingredient, into a monopoly, either by hiring the privilege out, or placing it under a plan of administration, in the form in which it now stands. Both schemes have been tried, but neither way has this branch been made to yield more than $30,000; indeed the annual proceeds usually have not exceeded $25,000. In 1809, the total amount of sales was $48,610, and deducting from this sum the prime cost and expenses of administration, the net profit in favor of the treasury was equal to no more than $27,078 or upwards of 125½%. In 1780, the privilege of selling the bonga was let out at public auction for the sum of $15,765 and this, compared with the present proceeds, clearly shows that, although the increase has not advanced equally with the other branches of the revenue, it is far from having declined. It must nevertheless be confessed, that on the present footing on which it stands, the smallness of the proceeds is not worth the trouble required in the collection, and even if the amount were still greater, it could never serve as an excuse for the oppression and violence to which this monopoly frequently gives rise.
Hardships on areca-nut planters.As the trees producing the bonga are not confined to any particular grounds, and indiscriminately grow in all, the plan has been adopted of compelling the Filipinos to gather and bring in the fruit, raised on their lands, to the depot nearest the district in which they reside. There they are paid from two, two and one-half, three and three and one-half reals per thousand, according to the distance from which they come: and, in order to prevent frauds, the surveyors belonging to the revenue go out, at certain times of the year, to examine the bonga plantations, and the trees being counted, they estimate the fruit, that is, oblige the proprietor to undertake to deliver in two hundred nuts for each bearing tree, whether or not, hurricanes deteriorate or destroy the produce, or thieves plunder the plantations, as very frequently happens. In case deficiencies are proved against him, he is compelled to pay for them in money, at the rate of twenty-five reals per thousand, the price at which the king sells them in the monopoly-stores. Besides, the precise condition of delivering in two hundred bonga nuts, according to the stipulations imposed upon him, presupposes the previous exclusion of all the injured or green ones; and although the ordinary trees usually yield as many as three hundred nuts each, great numbers are nevertheless spoiled. If, to the adverse accidents arising out of the storms and robberies, we add the effects of the whims or ill-humor of the receivers, it is not easy to imagine to what a length the injuries extend which befall the man who has the folly or misfortune to become a planter of this article.
Folly of monopoly plan.On the other hand, as in the conveyances from the minor to the larger depots, frauds are frequently committed, and the heaping together of many millions of nuts inevitably produces the fermentation and rapid putrefaction of a great number of them, it consequently follows that the waste must be immense; or if it is determined to sell all the stock laid in, without any distinction in quality and price, the public must be very badly served and displeased, as in fact too often happens. Since, therefore, the habit of using the buyo is still more prevailing than that of tobacco, when suitable supplies cannot be had in the monopoly stores, the consumer naturally resorts to the contraband channels, although he encounters some risk, and expends more money. It is also very natural that the desire of gain should thus lead on and daily expose a number of needy persons, anxious by this means to support and relieve the wants of their families. Returning, however, to what more immediately concerns the grower, I do not know that the oppressive genius of fiscal laws has, in any country of the globe, invented one more refinedly tyrannic, than to condemn a man, to a certain degree at least, as has hitherto been the case, to the punishment of Tantalus; for the law forbids the Filipino to touch the fruit of the tree planted with his own hands, and which hangs in tempting and luxuriant abundance round his humble dwelling.
Its modification desirable.It would be easy for me to enumerate many other inconveniences attending this branch of public revenue, on the footing on which it now stands, if what has already been said did not suffice to point out the necessity of changing the system, as those in authority are anxious that the treasury should gain more, and the king’s subjects suffer less. The strong prejudice entertained against this source of revenue, the inconsiderable sum it produces, and the complicated form of its organization, have in reality been sufficient motives to induce many to become strenous advocates for the total abolition of the monopoly. I do not, however, on this account see any reasons for altogether depriving the government of a productive resource, as this might soon be rendered, if it was placed under regulations less odious and more simple in themselves. I nevertheless agree, that the perfect monopoly of the areca fruit, or bonga, is impracticable, till the trees, indiscriminately planted, are cut down, and, in the same way as the tobacco plantations, fresh and definite grounds are laid out for its cultivation, on account of the revenue. I am further aware that this measure is less practicable than the first; for, independent of all the other obstacles, it would be necessary to wait till the new plantation yielded fruit, and also that the public should consent to refrain from masticating buyo in the meanwhile, a pretension as mad as it would be to require that the eating of salt should be dispensed with for a given number of years. But what difficulty would there be, for example, in the proprietors paying so much a year for each bonga tree to the district magistrate, the governor of the nearest town, or the cabeza de Barangay, or chiefs of the clans into which the natives are divided, in the same manner as the Filipino pays his tribute? Tree-tax preferable.The only one I anticipate is that of fixing the amount in such way that, at the same time this resource is made to produce an increased income of some moment, it may act as a moderate tax on an indefinite property, the amount of which, augmented in the same price, may be reimbursed to the proprietor by the great body of consumers. It is not in fact easy to foresee or estimate, by any means of approximation, the alteration in the current price of the bonga, that would result from the indefinite freedom of its cultivation and sale, especially during the first years. Although, for this reason, it would be impossible to ascertain what proportion the impost on the tree would then bear with regard to the value of the fruit, the error that might accrue would be of little moment, as long as precautions were taken to adopt a very low rate of comparison, and a proportionably equitable one as the basis of taxation. Supposing then that the price of the bonga should decline from twenty-five reals, at which it is now sold in the monopoly stores, to fifteen reals per thousand, in the general market, and a tax of one-fourth real should be laid on each tree valued at two hundred bonga nuts, it is clear that this would be equal to no more than 8½%; or, what is the same, the tax would be in the proportion one to twelve with the proceeds of each tree, and the more the value of the fruit was raised, the more would the rate of contribution diminish. It ought at the same time to be observed that, under the above estimate, that is, supposing the price of the article to remain at fifteen reals, the 8½% at which rate the tax is regulated, would not perhaps exceed five or six per cent on a more minute calculation; in the first place, because at the time of making out the returns of the trees, Exception of immature and aged trees.those only ought to be set down which are in their full vigor, excluding such as through the want or excess of age only yield a small proportion of fruit; and in the second, because in the numbers registered, the trees would only be rated at two hundred although it is well known they usually yield three hundred, in order by this means the better to avoid all motives of complaint. In this point of view, and by adopting similar rules of probability, it seems to me that the government would not risk much by an attempt to change the present system into a tax levied on the tree itself, on a plane similar to the one above proposed; more particularly by doing it in a temporary manner, and rendering it completely subservient to the corrections subsequent experience might suggest in this particular.