Part 13

ECONOMIC POSITION.--Lying within thirty-six hours' sailing from the port of Hongkong, the Philippine Archipelago bears promise of being an important distributing center for goods destined for the markets of the Far East. The ports and harbors have exceptional advantages of anchorage, and port facilities are easily obtained. The islands are close to the main trade route between America and Europe, via the Pacific. They are also close to the route from the extreme Orient to Europe and to the route from the ports of southern Asia to the two Americas. Furthermore, they lie on one of the most promising trade routes between Australia and Asia. Manila, however, is in competition with such ports as Hongkong, Singapore, Saigon, and Batavia, which are in most respects better situated especially for European trade. As regards American bound traffic, however, Manila has the advantage. Feeder lines are actually operated from Singapore to Manila and Zamboanga, and from Batavia to the ports of Mindanao. For goods coming from the United States for the east, direct sailings are conveniently made from the Pacific coast of Canada to the ports of the Philippine Islands, where transhipments can be made for any of the ports of Asia, Japan, India, Singapore, the Dutch East Indies, and even Australasia.

[Filipino capital]

The port of Manila has now a marine terminal that can compare favorably with any in the Orient. There are three piers provided with modern conveniences, and there is a good-sized basin inclosed with strong breakwater. If the development of the Philippine resources, however, should in the future proceed as rapidly as the development during the last decade, and if shipping opportunities generally in the East are taken advantage of, there will be need for a still larger marine terminal and for efficient ship-repairing and dry-docking facilities. But there will always be available sites on Manila Bay.

To emphasize the importance of Manila as a trade center, attention is drawn to the chart of page 146 where a circle, drawn with Manila as a center and having a radius of 1,700 miles, will comprise within its circumference no less than 20 cities of equal importance and would reach a population of no less than 125,740,711, while a radius of 3,500 miles would make the circumference of the circle reach into the interior of Siberia and China to the north, all of India and Colombo to the west, and about two-thirds of Australia to the South.

[Filipino capital]

THE PERSONNEL OF PHILIPPINE COMMERCE.--Before the coming of the Spaniards, the Filipino people were known traders, their interisland life leading naturally to a use of the sea as a means of communication. During the eighteenth and nineteenth centuries trade was controlled by the Spanish residents. The result of limited Filipino participation was a disinclination, through lack of knowledge and practice, to engage in trade, and it is only within the last few years that Filipino business men have been an appreciable factor. Dozens of enterprising and well-educated young men are now venturing into business. Filipino capital has hitherto been invested in great estates; the millionaires of the Islands with few exceptions have obtained their incomes from rentals and produce. All that is rapidly changing; oil companies, shipping firms, and importing houses are now financed by Filipino capital and managed by Filipino brains; but Filipino participation in the trade of their country has not yet assumed commanding proportions.

[Foreigners]

The people of all the great trading nations have established houses in Manila and have a vital part of the Islands' commerce, transacting a considerably greater proportion of the foreign trade. Of these, Americans are, of course, the most numerous, having as a basis the political bond between the two countries. A large part of these are ex-Government employees, who saw the opportunities for business development during their terms of service in the Insular Government.

The British probably occupy second place, though the Spaniards and their descendants in the Islands are important factors, their houses handling every branch of import and export trade. The British firms are for the most part long established, and their trade has the strong aspect characteristic of British trade the world over. They specialize in the export of the staples hemp, sugar, and tobacco. The French and Swiss have houses, which were here prior to American occupation. The Japanese are a new element; they have of late been invading every branch of commerce, with increasing momentum. Millions of Japanese capital are being invested in the basic industries of the Islands, and each month sees the incorporation of new companies. The post-war depression, however, has reduced their number and commercial activities very materially.

AMERICA'S MONOPOLY IN PHILIPPINE TRADE.--The old saying that "trade follows the flag" has held true in the Islands. At the time of the American occupation a very small portion of the Islands' commerce was with the United States; now it is about two-thirds, seven times that of any other country.

In the beginning, the growth was slow, and what growth there was, was due to the increasing American civil population. The few American houses were young and struggling with inexperience and lack of capital. The older foreign houses, with their branches in the provincial centers and established clientele, had a very strong hold on import trade.

[Effect of Free Trade]

In 1909 a tariff law providing for reciprocal free trade between the United States and the Islands was passed, with a few limitations which were removed in 1913. Immediately following the passage of this law American goods sprang to the fore and trade increased threefold from 1909 to 1912, $24,000,000 worth having been imported in that year.

MEDIUMS OF TRADE.--Generally speaking, there are three methods by which goods coming from foreign countries are brought to consumers in the Archipelago.

Some manufacturers establish branches throughout the Islands and sell only their particular line. For others having a smaller volume of trade various commission and indent houses stand ready to handle their goods together with other lines. Still other manufacturers having a large volume of business in the Islands transact business thru a branch or agent direct without any intermediary.

TRADE WITH OTHER COUNTRIES.--The following table shows the volume of trade between the Philippines and the other countries of the world for the years 1917 to 1922:

Countries 1922 1921 1920 1919 1918 1917 Pesos Pesos Pesos Pesos Pesos Pesos

United States 223,699,852 248,973,616 395,012,081 264,288,213 295,932,059 201,710,012 Hawaii 1,199,666 2,404,761 4,310,625 4,584,195 958,872 968,859 Porto Rico 159 Guam 279,929 344,211 223,304 198,134 522,822 208,494 United Kingdom 16,788,965 17,892,548 34,559,572 37,111,249 44,492,810 26,532,640 Austria-Hungary 298,425 353,670 23,305 391 1,633 2,063 Belgium 1,187,310 719,089 812,910 915,390 474 43,606 Denmark 49,800 86,745 103,098 36,667 40,810 87,417 France 4,519,468 7,812,258 5,828,482 11,423,798 4,097,446 4,506,617 Germany 7,934,643 7,429,125 2,787,824 733,882 65,215 321,879 Italy 984,018 469,804 663,707 337,104 378,305 427,312 Netherlands 5,670,345 10,859,875 7,292,425 17,213,031 90,927 176,910 Spain 7,467,255 9,548,425 12,878,951 9,728,135 7,860,335 4,881,013 Norway 124,795 39,105 10,539 37,610 15,475 29,858 Switzerland 1,510,333 1,875,403 1,890,888 1,347,920 1,215,741 1,120,127 Canada 2,320,070 1,236,079 2,007,190 481,439 1,400,341 1,119,188 China 17,786,205 24,054,116 25,915,481 21,884,855 19,652,486 12,839,167 Japanese-China 748,000 317,378 90,597 435,731 221,431 339,971 British East Indies 4,558,247 5,373,683 9,645,447 7,592,592 7,031,771 4,339,107 Dutch East Indies 5,569,494 5,813,437 5,524,312 8,242,028 2,662,846 2,490,819 French East Indies 6,191,832 6,516,898 10,226,884 10,456,432 16,560,839 11,309,048 Hongkong 5,664,825 10,146,269 14,960,216 14,882,990 10,129,983 11,154,093 Japan 28,964,902 35,094,966 47,064,272 37,285,086 42,144,920 31,088,379 Siam 466,336 4,196,598 8,733,450 2,637,467 2,439,348 753,449 Australasia 7,105,550 5,835,955 10,199,782 10,668,854 8,873,767 5,977,807 British Africa 50,936 72,990 145,457 402,018 161,063 French-Africa 35,975 All other countries 348,663 249,812 845,106 384,283 213,776 ----------- ----------- ----------- ----------- ----------- ----------- Totals 351,561,885 407,907,793 601,124,276 463,513,756 467,587,387 322,802,674

The values of imports and exports and the trade balance for each year, from 1913 to 1922, follow:

VALUES OF IMPORTS AND EXPORTS, AND TOTAL VOLUME OF TRADE, SHOWING BALANCE FOR EACH YEAR, FROM 1913 TO 1922

+-------------+--------------+-------------+------------------------ | | | | Balance of trade | | | +------------+----------- Year | Imports | Exports | Total trade |In favor of | Against | | | | Islands | Islands -------+-------------+--------------+-------------+------------+----------- | Pesos | Pesos | Pesos | Pesos | Pesos 1913 | 106,625,572 | 95,545,912 | 202,171,484 |----------- | 11,079,660 1914 | 97,177,306 | 97,379,268 | 194,556,574 | 201,962 |----------- 1915 | 98,624,367 | 107,626,008 | 206,250,375 | 9,001,641 |----------- 1916 | 90,992,675 | 139,874,365 | 230,867,040 | 48,881,690 |----------- 1917 | 131,594,061 | 191,208,613 | 322,802,674 | 59,614,552 |----------- 1918 | 197,198,423 | 270,388,964 | 467,587,387 | 73,190,541 |----------- 1919 | 237,278,104 | 226,235,652 | 463,513,756 |----------- | 11,042,452 1920 | 298,876,565 | 302,247,711 | 601,124,276 | 3,371,146 |----------- 1921 | 231,677,148 | 176,230,645 | 407,907,793 |----------- | 55,446,503 1922 | 160,395,289 | 191,166,596 | 351,561,884 | 30,771,307 |----------- -------+-------------+--------------+-------------+------------+-----------

VALUES OF PRINCIPAL ARTICLES EXPORTED, 1921-1922

Articles 1921 1922 Pesos Pesos

Beeswax 18,670 3,010 Breadstuffs: Rice 49,142 58,164 All other 4,941 1,919 Chemicals, drugs, dyes and medicines: Sapan wood 5,781 16,859 All other 2,674 1,670 Copra 26,146,913 28,206,146 Copra meal 1,208,930 2,435,290 Cotton, vegetable fiber and manufactures of: Unmanufactured-- Canton 1,342 61,530 Hemp (Manila) 25,969,385 39,081,829 Maguey 1,848,794 2,973,203 Pacol 9,662 1,489 Sisal 28,151 52,585 All other unmanufactured 47,697 133,060 Manufactures of-- Cloth 221,944 24,536 Cordage 918,544 1,099,375 Crochet 15 5,533 Embroideries 10,696,207 6,514,597 Knotted hemp 100,267 904,440 Laces 30,057 17,082 All other manufactures 28,998 103,950 Fish and fish products 175,847 252,912 Fruits and fruit nuts 239,060 532,632 Gold and silver manufactures 4,644 3,787 Gums and resins: Copal 140,607 127,209 Elemi 7,689 9,266 Gutta-percha 13,466 8,460 Rubber 25,700 ---- All other ---- 110 Hats 608,724 950,788 Hides and skins 16,094 27,435 Iron and steel, scrap and old 95,692 28,588 Malt liquors 34,127 28,757 Matches 15,360 33,207 Mineral water 300 ---- Oils: Coconuts 32,103,036 31,468,971 Ilang-ilang 57,554 60,606 Lumbang or candlenut 161 56 All other 565 220 Pearls, unset 3,444 15 Sesame seed 75,499 3,762 Shells: Unmanufactured 205,249 286,816 Manufactures of-- Pearl buttons 245,905 418,933 All other 19,141 12,848 Shoes 12,026 5,190 Slippers 16,917 10,867 Soaps 4,860 16,323 Spirits, distilled 57,895 56,796 Sponges 2,575 3,121 Sugar: Centrifugal 37,175,898 38,628,040 Raw 13,854,586 11,398,580 Refined 6,970 1,138,490 Tobacco: Leaf 9,522,812 4,546,234 Cigars 6,454,886 11,602,219 Cigarettes 87,530 165,880 Smoking 328,853 674,948 All other 170,353 350,955 Vegetables 5,092 3,471 Wood: Timber 7,591 10,328 Lumber 1,567,533 1,656,812 Rattan and reeds 615 943 Veneers 75,930 210,222 Basketware 118,802 76,379 Furniture 50,265 48,789 All other 94,978 22,627 All other domestic exports 722,335 635,919 Exports of foreign merchandise 4,465,365 3,951,818 ----------- ----------- Total 176,230,645 191,166,596

VALUES OF PRINCIPAL ARTICLES IMPORTED, 1921-1922

Articles 1921 1922 Pesos Pesos

Animals: Carabaos 758,862 65,033 Other cattle 3,315,863 1,596,156 Brass, and its manufactures 932,637 454,049 Breadstuffs: Rice 6,649,395 4,604,315 Wheat flour 7,017,174 5,783,194 Other breadstuffs 1,358,513 1,043,708 Cars, carriages, other vehicles, and parts of: Automobiles and parts of 7,459,214 1,406,965 Other cars, carriages, etc., and parts 3,345,418 907,856 Cement 2,005,264 1,587,383 Chemicals, drugs, dyes and medicines 3,349,384 2,946,324 Clocks and watches, and parts 508,305 261,504 Coal 6,987,004 5,009,362 Cocoa or cacao 797,527 713,839 Coffee 760,593 880,135 Copper and manufactures of 794,014 190,170 Cotton, and its manufactures 37,648,201 47,229,720 Cotton cloths 25,463,804 34,408,508 Other manufactures 12,184,397 12,821,212 Diamonds and other precious stones, unset 517,893 374,109 Earthen, stone and chinaware 781,366 964,678 Electrical machinery, apparatus, and appliances 4,683,060 1,891,967 Eggs 1,695,605 1,457,923 Fibers, vegetable, and their manufactures 3,507,000 2,331,324 Fish and fish products 2,965,912 2,834,949 Fruits and nuts 2,115,644 1,576,678 Glass and glassware 1,812,285 869,870 Gold, platinum and silver, and their manufactures 378,899 219,618 Hats and caps and parts of 617,369 647,620 India rubber, and its manufactures 3,511,910 2,534,399 Instruments and apparatus: Not electrical 1,279,204 509,802 Motion-picture, and films for 574,275 600,948 Iron and steel, and their manufactures 43,529,079 15,208,761 Agricultural implements, and parts 700,421 30,572 Machinery and parts 17,665,808 4,022,834 All other iron and steel 25,162,850 11,155,355 Leather, and its manufactures 1,786,461 1,563,939 Meat and dairy products: Meat products 6,255,609 4,623,158 Dairy products 4,325,411 3,924,896 Musical instruments, and parts 508,349 269,132 Oils: Crude 954,463 5,337,775 Illuminating 9,014,714 3,476,158 Lubricating and heavy paraffin 3,943,456 655,264 Naphthas, including all lighter products of distillation 8,832,227 3,804,003 All other oils 1,060,068 1,004,899 Paints, varnishes and pigments 966,845 882,485 Paper, and its manufactures: Books and other printed matter 3,013,988 1,407,916 All other 6,066,029 3,511,832 Perfumery and toilet preparations 1,530,011 1,026,213 Photographic equipments and supplies 446,066 350,949 Plateware, gold and silver 328,300 135,387 Silk, and its manufactures 3,721,538 3,117,454 Soap 710,879 718,802 Spirits, wines and liquors 1,564,629 822,933 Sugar and molasses 984,538 722,910 Tobacco, and its manufactures 4,301,769 2,480,322 Vegetables 2,825,998 2,665,212 Wax 216,893 350,211 Wood, and its manufactures 1,731,758 645,116 Wool, and its manufactures 1,645,701 1,337,484 All other imports 13,284,579 8,858,480 ----------- ----------- Total 231,677,148 160,395,289

Because the products of the Islands are usually exported to the countries where the imports come from, there have been established firms which deal in exports and imports of every variety, and have buying and selling organization both in the Islands and abroad. This double business, so to speak, besides being very profitable, lends itself to large scale enterprises and millions of capital have been brought together under one managing head.

SHIPPING.--The foreign, as well as the domestic trade of the Philippines, will always depend on an adequate supply of shipping. As fast as the agriculture and industries of the Islands develop, the supply of shipping must correspondingly increase, otherwise, the commercial development of the Islands will be retarded. Hemp, oil, and sugar are bulky and the surface they require when exported is large in proportion to their value. Practically, all Philippine goods are carried thousands of miles before they reach their destinations, either to New York or London and the continent--half way around the world. Because of this, reasonable wages and a regular supply of surface for cargo in the ships calling at the ports of the Islands are indispensable. Because of this, also, it is necessary for the Islands to have a merchant marine of its own in order that products therefrom can be easily transported to the markets of the world.

INTERISLAND TRANSPORTATION.--Water transportation is the key to the interisland trade of the Islands. For hundreds of years before the coming of the steamboat, the Philippine seas were dotted with small sailboats of every description, made out of a log, or of rough hewn planks surmounted by a sail made from abaca cloth. They were manned by sturdy, courageous voyagers inured to hardships, who dared to go forth even into strange oceans, through typhoon and tempest.

The following table shows the entrances and clearances of vessels in the Philippine Islands by nationalities during 1920-1923:

AGGREGATE VALUE OF MERCHANDISE CARRIED BY VESSELS ENGAGED IN FOREIGN TRADE, BY NATIONALITY