CHAPTER XX
COMMERCE
To foreign nations – to our own especially – the particular interest felt in the state of the Philippines is naturally more of a commercial than of a political character. They must grow in trading importance; already enough has been done to make a retrograde or even a stationary policy untenable. Every step taken towards emancipation from the ancient fetters which ignorance and monopoly laid upon their progress has been so successful and so productive as to promise and almost to ensure continuance in a course now proved to be alike beneficial to the public treasury and to the common weal. The statistics which I have been able to collect are often unsatisfactory and inaccurate, but, upon the whole, may be deemed approximative to the truth, and certainly not without value as means of comparison between the results of that narrow-minded exclusive system which so long directed the councils of Spain and the administration of las Indias, and the wiser and more liberal views which make their way through the dense darkness of the past.
The caprices and mischiefs of a privileged and protected trade and the curses which monopolies bring with them to the general interests, may, indeed, be well studied in the ancient legislation of Spain as regards her colonies. One vessel only was formerly allowed to proceed from the Philippines to Mexico; she was to be commanded by officers of the royal navy, equipped as a ship of war, and was subject to a variety of absurd restrictions and regulations: the adventurers were to pay 20,000 dollars for their privilege; and no one was allowed to adventure unless he were a vocal de consulado, which required a residence of several years in the islands, and the possession of property to the extent of 8,000 dollars. The privilege often passed clandestinely, by purchase, into the hands of friars, officials, women and other speculators – and it may well be supposed at what prices the goods had to be invoiced. Such being the licensed pillage in Asia, on arriving at Acapulco, in America, to which place the cargo was necessarily consigned, 33⅓ per cent. was imposed upon the valuation of the Manila invoices. And on the return of the ship similar or even more absurd conditions were exacted: she was only allowed to bring back double the value of the cargo she conveyed; but, as the profits were often enormous, every species of fraud was practised to give fictitious values to the articles imported – in fact, from the beginning to the end of the undertaking there seems to have been a rivalry in roguery among all parties concerned.
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.
In 1810 the import trade of the Philippines amounted to only 5,329,000 dollars, of which more than half consisted of precious metals, sent from the Spanish colonies of America. From Europe and the United States the trade was only 175,000 dollars. The exports were 4,795,000 dollars, of which one-and-a-half million consisted of silver to China, and the whole amount of exports to Europe and the United States was 250,000 dollars. The great start took place in 1834, when the monopoly of the Philippine Company terminated, and commerce may be regarded as progressive from that time. Of the trade with the surrounding islands, that with Jolo, conducted principally by Chinese, is important. One of the leading articles of export is the edible bird’s-nests, of whose collection a Spanish writer gives the following account: – “The nests are collected twice a year; those most valued from deep and humid caverns. Early training is needful to scale the localities where the nests are found, and the task is always dangerous. To reach the caves it is necessary to descend perpendicularly many hundred feet, supported by a rope made of bamboo or junk, suspended over the sea waves as they dash against the rocks.” There is also from Jolo a considerable exportation of tortoise-shell. Trepang (sea-slug, Holothuria) and shark-fins are sent to the Chinese markets; also mother-of-pearl, wax and gold dust. The voyage from Manila to Jolo and return generally occupies seven to eight months. A trade in most respects resembling that of Jolo is carried on between Manila and the Moluccas. Spices are, however, added to the imports. There is a large trade between Singapore and Manila, and with Amoy, in China, the transactions are very important. Vessels are generally loading from and to that port. Rice, paddy, cocoa-nut oil, sugar, fine woods, table delicacies and a variety of minor articles, are exported; silks, nankins, tea, vermilion, umbrellas, earthenware and a thousand smaller matters, make up the returns.
Internal trade suffers much from the many impediments to communication and the various shiftings to which merchandise is exposed. It is said that in the transit from the north of Luzon to the capital there are as many as a hundred floating rafts upon which the goods must be carried across the different streams; at each considerable delay is experienced, as the raft (balsa) is seldom found when and where it is wanted. And during half the year inland conveyance is the only means of transport, as the monsoons make the sea voyage impossible for coasting vessels. Indeed, in the remoter islands months frequently pass without arrivals from the capital. Some of the fairs in the interior are largely attended by the Mahomedan and heathen natives, who will not visit the ports or larger towns. That of Yligan (Misamis, in Mindanao) is much visited by Moros, who bring thither for sale paddy, cocoa, coffee, gold dust, cotton fabrics, krises and weapons of war, with many other native articles, which they exchange mostly for European and Chinese wares. Panaguis, in Luzon, is another market much frequented by the Igorrote Indians. Many of the ancient river communications have been stopped by inundations, which have given a new direction to the stream, and by the invasion of snags, trees and rocks from the upper regions. There is a great deal of ambulatory petty trade in the interior; the Chinese especially are active pedlars and factors, and make their way to buy and to sell wherever there is a profit to be gained. They are to a great extent the pioneers of commerce, and in this way valuable auxiliaries and co-operators by opening new fields to be hereafter more extensively explored.
There are in Manila seven English, three American, two French, two Swiss and one German, commercial establishments. In the new ports there is no European house of business except at Iloilo, where there is an English firm, of which the British vice-consul is the directing partner.
Among the curiosities of commercial legislation is a decree of the governor of the Philippines, dated only a few years ago, by which it was ordered that no vessel should be allowed to introduce a cargo from China or the East Indies unless an engagement was entered into by the captain to bring to Manila five hundred living shrikes (mimas?), as the bird was reported to be most useful in destroying the insects which were at that time seriously damaging the harvests. I believe not a single bird was ever brought. It would have been about as easy and as reasonable to require them to import some slices of the moon, for the catching, and the caging, and the keeping, are scarcely within mortal capabilities, and 500 birds were the required minimum by every ship; nor was it the least remarkable part of the decree or requirement that they were all to be delivered gratis.
For the protection of the revenue there is an armed body called the Carabineros de Real Hacienda. It is composed of natives under European officers, and is charged with both land and sea service. They wear a military uniform and a broad hat resembling a large punch-bowl, which is, however, an admirable protection from the sun’s rays.
Great Britain has a salaried consul and vice-consul in Manila and vice-consuls in Iloilo and Sual. France has also a salaried consul in the capital. The United States, Portugal, Belgium, Sweden and Chili, are represented by members of commercial establishments, who exercise consular authority in Manila. The American consul is Mr. Charles Griswold, and few are the visitors to these islands who have not enjoyed his hospitality and benefited by his experience.
The post-office establishments are imperfect and unsatisfactory and the charges for the conveyance of letters heavy. There is a weekly postal communication from the capital with the provinces in the island of Luzon, and southwards as far as Samar and Leyte, but all the other eastern and southern islands are left to the chances which the coasting trade offers and are frequently many months without receiving any news from the capital or the mother country. A regular service, providing for the wants of these important districts, Panay especially, with its population exceeding half a million, is greatly to be desired.
There is now a fortnightly service carried on by the steamers of the Peninsular and Oriental Company between Manila and Hong Kong, generally reaching forty-eight hours before the departure, and quitting forty-eight hours after the arrival, of the steamers from Europe. It is conducted with great regularity and the letters from Spain arrive in about fifty days; but many days would be saved were there a branch steamer from Malta to Alicant. For this service an annual sum (recoverable monthly) of 120,000 dollars is paid by the Manila government to the company. The steamers are freed from all port charges except pilotage.
The government has published proposals for the establishment of a steam-packet company for the service of the islands, offering 45,000 dollars annually as a State contribution, but I believe there is no immediate prospect of the adoption of the scheme.
The Banco Español de Isabel II. is a joint-stock company, whose capital is 400,000 dollars, in 1,000 shares of 400 dollars each. It was established in the year 1855, and has generally paid to the shareholders dividends at the rate of six to eight per cent. per annum. It issues promissory notes, discounts local bills of exchange and lends money on mortgage. The general rate of interest in the Philippines fluctuates from six to nine per cent. The yearly operations of the bank exceed 2,000,000 of dollars. The value of about half-a-million of bills of exchange is usually under discount. Its ordinary circulation does not exceed 200,000 dollars in promissory notes and it has deposits and balances to the value of about 1,750,000 dollars. The bank has afforded considerable facilities to commerce, and has answered one of its principal objects, that of bringing into circulation some of the hoarded money of the natives. Most of the foreign houses are shareholders.
The decimal system of accounts and currency was introduced into the Philippines by a royal decree, and an end put to all the complications of maravedis, quartos, and reales de ocho, by the simple adoption of the dollar, divided into one hundred cents. It would be, indeed, a wretched compliment to the population of England (let me say it in passing) if, as certain opponents of improvement have averred, they would never be brought to appreciate or comprehend a change to decimal denominations which the “untutored mind” of the “wild Indian” has already begun to adopt, using his digits as the instruments of the new philosophy, and aided now and then probably by the simple abacus of the Chinese shopkeeper, with whom he has much to do.
The weights and measures used in the Philippines are —
The following return gives the exports from Manila for the year 1858: —
EXPORTS FROM MANILA FOR 1858
EXPORTS FROM MANILA FOR 1858. (Continued.)
In the year 1855, Don Sinibaldo de Mas, having been charged with an official mission of inquiry into the state of these islands, published an article on the revenues of the Philippines, addressed to the finance minister of Spain.30
He begins his report by contrasting the population and commerce of Cuba with that of the Philippines; stating that Cuba, with less than a million of inhabitants, has a trade of 27,500,000 dollars, while the Philippines, which he says contained, in 1850, 4,000,000 of people in a state of subjection and 1,000,000 unsubdued, had a trade of less than 5,000,000 of dollars. He calculates the coloured population of Cuba at 500,000; the white population of the Philippines at from 7,000 to 8,000 persons. He deduces that, if the produce of the Philippines were proportioned to that of Cuba, it would be of the value of 250,000,000 dollars, and that the revenue should be 48,000,000 dollars, instead of about 9,500,000 dollars.
He avers that the soil is equal in its productive powers to any in the world; that the quality of the produce – sugar, coffee, tobacco, indigo, cocoa and cotton – is most excellent; that it possesses almost a monopoly of abacá (Manila hemp); and he goes on to consider the means of turning these natural advantages to the best account.
He altogether repudiates any extension of the existing system, or augmentation of taxation in its present forms; and states, what is most true, that to the development of agriculture, industry and commerce the Philippines must look for increased prosperity.
His three proposals are: —
1. Opening new ports to foreign trade.
2. Emancipating the production, manufacture and sale of tobacco.
3. Increasing the population of the islands.
By a royal decree, dated 31st March, 1855, three additional ports were opened to foreign trade – Zamboanga (Mindanao), Iloilo (Panay), and Sual (Luzon). The results have not responded to anticipations. One reason is obvious – custom-house officers, custom-house restrictions, custom-house vexations accompanied the seemingly liberal legislation. These are sufficient to check, if not to crush, the growth of intercourse. I doubt if in either of the new ports the custom-house receipts cover the costs of collection. The experiment should have been a free-trade experiment, but the jealousies and fears of the capital were probably influential. It ought not to have been forgotten that the new ports, charged with all the burdens which pressed upon Manila, offered none of its facilities, the creation of many generations – wharves and warehouses, accomplished merchants, capital, foreign settlers, assured consumption of imports and supply of exports; these counterbalanced the cost of conveyance of goods to or from the capital, while, on the other hand, the introduction of a custom-house has prejudiced the trade which previously existed – as, for example, the call of whalers at Zamboanga, unwilling to submit to the fiscal exactions now introduced. But if every port in the Philippines were made free from custom-houses a great impulse would be given to industry, commerce and shipping; the loss to the treasury would be inconsiderable, for the net proceeds of the customs duties is very insignificant, while other sources of revenue would be undoubtedly increased by the impulse given to the general prosperity. De Mas states that the extension of the trade of Cuba from the Havana to other ports led to an augmentation in its value from 2,000,000 to 30,000,000 dollars.
Two plans are suggested by Señor De Mas for the emancipation of the tobacco cultivation and manufacture from the existing State monopoly. One, the levying a heavy land tax on all lands devoted to the produce; the other, the imposition of a duty on exportation. He estimates that a baleta of land (1,000 brazas square) gives 1,500 plants, and 4 to 5 cwt. of tobacco, saleable at 4 to 5 dollars per quintal. The cost of manufacturing 14,000 cigars, which represent 1 cwt., 5¼ dollars, and boxes for packing, 3½ dollars. He says the value of the cigars is 6½ dollars per box (it is now considerably more), in which case the profit would be 77¼ dollars, and proposes a duty of 70 dollars per cwt., which is more than five times the cost of the article. He gives satisfactory reasons for the conclusion that cigars would be made much more economically by the peasantry than by the government, shows that the cost of the machinery of administration might be greatly diminished, asserts that the Indians employed at home would be satisfied with lower gains than the wages paid by the government, and supposes that the unoccupied houses of the natives would be dedicated to the making of cigars as a pleasant and profitable domestic employment. It may be doubted whether he estimates at its full value the resistance which the indolent habits of the Indian oppose to voluntary or spontaneous labour; but the conclusion I have reached by not exactly the same train of reasoning is the same as that arrived at by my friend whom I have been quoting, namely, that the government monopoly is less productive than free cultivation, manufacture and sale might become; that a reduction of prices would extend demand, leave larger benefits to the treasury and confer many advantages upon the people; and that the arguments (mostly of those interested in the monopoly) in favour of the existing system are not grounded on sound reasoning, nor supported by statistical facts.
The tobacco monopoly (estanco) was established in 1780 by Governor-General Basco; it was strongly opposed by the friars, and menaces of severe punishments were held over those who sought to escape the obligations imposed. But to the present hour there are said to be large plantations of tobacco which escape the vigilance of government, and cigars are purchaseable in many of the islands at one-fourth of the government price. The personal establishment for the protection of the tobacco monopoly consists of nearly a thousand officials and more than thirty revenue boats. It is, notwithstanding, cultivated largely in provinces where the cultivation is prohibited by law; and I find in a report from the Alcalde of Misamis (Mindanao) the following phrase: “The idea of interfering with the growth of tobacco for the benefit of the treasury must be abandoned, as the territory where it is produced is not subject to Spanish authority.”
Attempts were made a few years ago to encourage the planting of tobacco in the province of Iloilo, by a company which made advances to the Indians; but the enterprise, discouraged by the government, failed, and I found, when I visited the locality, the warehouses abandoned and the company dissolved. There have been many expeditions for the destruction and confiscation of illicit tobacco; and on more than one occasion insurrections, tumults, serious loss of life and very doubtful results have followed these interferences. The statistical returns show that the consumption of the State tobacco varies considerably in the different provinces, being influenced by the greater or less difficulty of obtaining the contraband article.
There have been divers projects for augmenting the population of the Philippines – from China, from Switzerland, from Borneo and even from British India. The friars have never looked with complacency on any of these schemes. They all present elements which would not easily he subjected to ecclesiastical influence. The Chinese would not be willing cultivators of the soil if any other pursuit should promise greater profits, and it is quite certain that the indolent Indian will nowhere be able to compete with the industrious, persevering and economical Chinese. Many suggestions have been made for the introduction of Chinese women, with a view of attaching Chinese families to the soil; but hitherto nothing has sufficed to conquer the abhorrence with which a Chinese female contemplates the abandonment of her country, nor the general resistance to such abandonment on the part of the Chinese clans. Chinese female children have been frequently kidnapped for conveyance to the Philippines, and some horrible circumstances have come to the knowledge of British authorities in China, followed by the exposure and punishment of British subjects concerned in these cruel and barbarous deeds. An establishment of a sisterhood in China, called that of the Sainte Enfance, has been looked to as a means of christianizing female children, and conveying them to the Philippines; they have collected or purchased many orphans, but small success has attended these well-meant, but not well-directed labours. In 1855, it was stated in an official document (De Mas, p. 26) that in 1858, an annual entry of 2,500 children might be expected. The calculation has been a total mistake; the establishments in China are in a state of embarrassment and difficulty, and I am not aware that a single Chinese female has been supplied for the suggested purpose. Any number of orphans or abandoned children might be bought in the great cities of China, especially from the orphan asylums; but an increased demand would only encourage their abandonment by their mothers. These foundling hospitals are of very doubtful utility, and produce, probably, more misery than they cure.
The greatest impediment to the progress of the Philippines, and the development of their immense resources, is attributable to the miserable traditional policy of the mother country, whose jealousies tie the hands of the governors they appoint to rule; so that the knowledge and experience which are acquired in the locality are wholly subjected to the ignorance and shortsightedness of the distant, but supreme authority. Would the Spaniard but recognize the wisdom of one of their many instructive proverbs —Mas sabe el loco en su casa que cuerdo en la agena (the fool knows more about his own home than the wise man of the home of another) – more confidence might be reposed in those who are thoroughly cognizant of local circumstances and local wants. As it is, everything has to be referred to Madrid. A long delay is inevitable – an erroneous decision probable; circumstances are constantly changing, and what would have been judicious to-day may be wholly unadvisable to-morrow. Then there is the greatest unwillingness to surrender even the shadow of authority, or any of those sources of patronage which a government so enervate and corrupt as that of Spain clings to as its props and protection. Again, the uncertainty of tenure of office, which attaches to all the superior offices held under the Spanish Government, is alike calculated to demoralize and discourage. Before a governor has surveyed his territory and marked out to himself a course of action, he may be superseded under one of those multitudinous changes which grow out of the caprices of the court or the clamour of the people. It was a melancholy employment of mine to look round the collection of the various portraits of the captains-general which adorned my apartment, bearing the dates of their appointment and their supersession. Some of them only occupied their office for a few months, and were as carelessly and recklessly dismissed as a worthless weed is flung away. And there seemed no expectation of any change in this respect, for there were many blank frames made to receive the vera effigies of future excellencies. Our colonial system is wiser, as we appoint governors for six years, and, except under special circumstances, they are not dispossessed of their government. Whether there may be any moral deterioration connected with the possession of power, sufficient to counterbalance all the benefits which are furnished by long experience and local knowledge, may be a question for philosophy and statesmanship.