The undersigned, a commitbee of the Department of Economics have examined a thesis entitled THE PHILIPPINE SUGAR INDUSTRY presented by Mr. Rafael Mateo Piguing candidate for the degree of Doctor of Philosophy, and hereby certify that it is worthy of acceptance. May 18, 1955 ProQuest Number: 10008408 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. uest ProQuest 10008408 Published by ProQuest LLC (2016). Copyright of the Dissertation is held by the Author. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code Microform Edition © ProQuest LLC. ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106- 1346 THE PHILIPPINE SUG.;H ’INDUSTRY A THESI S Presented to the Faculty of the GRADUATE SCHOOL of Michigan State College of Agriculture and Applied Science In Partial Fulfillment of the Requirements For the Degree of Doctor of Philosophy By Rafael Mateo Piguing 1935 ACKNOIfllEDGEMENTS The writer is especially indebted to Dr. Harald S. Patton, Head of the Economics Department, Michigan State College, for without his patient and generous help, this manuscript would not have been possible. I am grateful to Professor Orion Ulrey for his helpful criticisms and suggestions and to Mr. John C. Davis for suggestions, criticisms and kind aid in the prepara­ tion of this dissertation. Acknowledgement is due to Professor Stanley Edwin Crowe for his kind help in the statistical part of the thesis; to Mr. Jackson E. Towne, librarian, for securing available material; to Dr. 0. C. Stine, Chief of the Historical and Statistical Division, U. S. Bureau of Agricultural Economics, in furnishing some of the necessary material; and to Mr. Joel C. Hudson, American Consul General, Suraboya, Java, for sending data concerning the Dutch East Indies Sugar Industry. 98857 7 TABLE OF GO ITTENTS INTRODUCTION Page 1 Introduction Scope and Method of Investigation 4 CHAPTER I SUGAR PRODUCTION UNDER THE SPANISH REGIME 5 Origin of Sugar Cultivation in the Philippines 5 Spanish Commercial Policy 6 Spanish Agricultural Policy 8 Production of Sugar under Spanish Rules Development in Luzon Island Development in Visayan Island 10 10 11 Sugar Exports During the Spanish Regime 14 Status at the Close of the Spanish Regime 19 CHAPTER II GOVERNMENT AIDS TO SUGAR INDUSTRY UNDER THE AMERICAN ADMINISTRATION El Situation Following the Spanish-American War 81 Opening the American Market to Philippine Sugar E2 Tariff arrangements, 1898-1909 Preferential Irade Arrangements, 1909-1915 Unconditional Free Admission* 1913-1934 EE E5 24 Government Aid to Sugar Centrals 26 Insular Land Policy 27 Agricultural credit measures Educational Provisions Page 31 32 Philippine Bureau of Agriculture Agricultural Education The Philippine Bureau of Science 32 34 35 CHAPTER III DEVELOPMENT OF SUGAR PRODQCTION SINCE 1900 36 Growth and Localization of Cane Production 36 Place of ^ugar Cane Agriculture 39 Production in Philippine Farm Value of Sugar and Other Principal Crops 43 CHAPTER IV PRODUCTION OF SUGAR CANE 46 Sugar Land Tenure System 46 Administration System 46 Tenancy or Casama System 48 Agent System 50 Small Farm System 51 Cane production in the Cane Program 52 Methods of Production 53 Preparation of the Land Preparation of the Seeds Methods of Planting Sugar Cane Cultivation of Sugar Cane Application of Fertilizer Cultivation of the Ratoon Harvesting Transportation of Cane to Mills Cost of Production and Yield Cost of Production Yield of Cane Sugar 53 55 56 56 57 58 59 60 61 61 64 CHAPTER V SUGAR CENTRALS IN THE PHILIPPINES Page 6 67 Modernization of Sugar Milling 67 Relation Between Planters and Central 72 Insular Distribution of Sugar Centrals 73 Growth and Localization of Centrals 73 Daily Capacity of Centrals 77 Nationality of Controlling Interest in Centrals 78 CHAPTER VI EXPORT MOVEMENT OP PHILIPPINE SUGAR 84 Place of Sugar in Philippine Trade 84 Proportion of Grind Exported 88 Classes of Sugar Exported and Destinations 89 Muscovado Centrifugal Refined Changes in Destinations 89 90 92 93 Handling and Financing Sugar Exports 96 Sugar Exporting Firms 96 Entry into United States Ports 98 Methods of Financing 100 CHAPTER VII COMPETITIVE POSITION OF PHILIPPINES IN WORLD SUGAR TRADE 101 Position in World Cane Production 101 The Chadbourne Plan in Relation to Philippine Exports 103 Changing Positions in the United States Sugar Import ^’rade 107 International Position as Exporters of Cane Sugar Page 107 Competitive Advantages and Disadvantages in Supplying United States Market 115 Sugar Yield per acre cultivated 117 Sugar Recovery per ton of cane 119 Production and transportation costs 120 Differential Advantage of Philippine over Cuban Sugar in United States Market 124 CHAPTER VIII RECENT AMERICAN LEGISLATION AFFECTING THE PHILIPPINE SUGAR INDUSTRY 129 The Costigan-Jones Sugar Stabilization Act of 1984 129 Application of Act to Philippines 131 Significance of the Act for Philippine Sugar Industry 134 The Philippine Independence Legislation 1933-34 136 CHAPTER IX OUTLOOK FOR THE PHILIPPINE SUGAR INDUSTRY 140 Crisis Now Confronting Philippine Sugar Industry 140 Reciprocal trade Agreements 140 The Negotiation of a Long Time Reciprocity Treaty With the United States 141 Alternative Outlets for Sugar in Other Countries 145 Possibilities of Increased Sugar Consumption in Philippines 147 Possitilities of Developing Alternative Exports 148 Possibilities of Reciprocal Agreements with Foreign countries 151 CONCLUSION Page 153 APPENDICES 157 REFERENCE SOURCES 162 INTRODUCTION The sugar industry is now the primary one of the Philip­ pines, this country having become one of the leading cane pro­ ducing and exporting countries of the world. Sugar is well adapted to the soil, climate, and labor of the Archipelago. Even during the last fifty years of the Spanish regime In the Islands, the value of the annual sugar exports constituted from 25 to 59 per cent of the total value of all the exports, showing clearly that sugar, in spite of the antiquated methods of producing and manufacturing it, played a major part in the economic life of the Filipino people. Although It is known that sugar has been grown for more than a century in the Philippines, progress in the industry was very slow under the Spanish regime. The Spaniards did not pass any legislation favorable to the industry. Rural credit associations or other Governmental financial institutions were not in existence during that period. Labor problems greatly handicapped the Philippine sugar plant­ ers. There was no real incentive for the development of the industry. In reality, the Spaniards were more interested in monopoly of tobacco for their own advantage. Under the American flag, there has been and still is a great interest in the development of sugar growing and pro­ cessing. The legislation -of the American Congress has been favorable to the development of sugar cane. The Americans and Filipinos have cooperated in the introduction of scientific 2 methods and management, and have encouraged the adoption of modern machinery for the production and manufacture of sugar. The Philippine Government has approved legislation for the establishment of financial institutions to help the Philippine sugar planters. The Bureau of Agriculture has assisted through its plant breeding and other work in improving the industry. The College of Agriculture of the Philippine University has trained students in technical knowledge. The legislative measures of the United States Government created a great incentive for investment of American capital in the industry. The Americans pioneered the erection of the first Philippine "sugar central" in San Jose, Mindoro Island in 1910. The first cooperative central, the Calamba "Sugar Central," was soon started in Laguna Province, Luzon Island. The investment of American capital has also encouraged the use of Philippine capital. The sugar industry contributed approximately §1,000,000 in 1923 and §10,236,000 in 1933 in direct and indirect taxes to the revenue of the country, or 43 per cent of the total estimated income of the government in 1933 (appendix, table A-)• It is estimated that two million people are engaged in the growing of sugar cane and in the manufacture of sugar. It comprised 48 and 63 per cent, respectively, of all the income derived from the foreign trade in 1931 and 1932, and It has been primarily responsible for the favorable balance of trade In recent years. Sugar comprised nearly 30 per cent of the gross annual income of 8200,000,000 during 1932 The Philippine sugar industry is now the leader in the Archipelago. Competition in the markets for Philippine sugar has become keen. Legislative acts of foreign countries have tended to bar the Philippine sugar cut of the principal world markets. International agreements have set quotas for pro­ duction and exports. Because of these facts, together with a lack of available economic information for the students and research workers and others associated'with the interprise, it seems wise that the economics of the Philippine sugar industry and its future be studied. SCOPS AHD METHOD CP IITVE3TIGATIC1! This study covers the growth and internal economy of the Philippine sugar industry, the competition of other countries, the effects of tariffs and free trade, price relationships, principal markets and its future. The data covers many years of the Spanish regime on the islands, as well as the whole period of American administration. ■Spanish period were lacking, obtained. Considerable data for the bore complete recent data were In order to make the data from a variety of sources comparable many adjustments were necessary. The research work was started during the winter of 1933. Letters of inquiry were sent to bureaus and to the College of Agriculture of the Philippine Government, to bureaus at Wash­ ington, D. C., and to various universities and private companies of the United States, Dutch East India, Cuba, Hawaii, Puerto Rico, Rome, Vienna, League of Rations and London. The Librarian of Michigan State College aided in borrowing the published material not obtainable for free distribution or for sale. The foreign terms of 'weights, measures and monies are explained or converted Into American terms so that they may be understood. 5 CHAPTER I SUGAR PRODUCTION UNDER THE SPANISH REGIME Origin of Sugar Cultivation in the Philippines Sugar cane was cultivated in the Philippines before the discovery of the islands by Magellan in 1521. Historians state that the discoverer of the Islands found this plant among others grown by the natives near their homes for food. Piga- fetta reported an incident which occurred that year when the "Rajah" of Mindanao served sugar cane to the Spaniards. He told of the Moros manufacturing various kinds of sweets from the juice of cane. Legaspi, in 1565, wrote of meeting a boat laden with products of the Islands, among them sugar. Governor Sande (1583) and Father Alonso Sanchez (1588) mentioned sugar cane in some of their writings. The latter tells of sugar cane being offered by the natives -of Bantal and Ivloragui to the Spanish soldiers in token of submission. It was observed and recorded in 1591 that the natives of Cagayan on Luzon Island were cultivating large quantities of sugar cane. All of these early records suggest that sugar cane might have been indigenous to the Philippines. Records and publi­ cations in the Philippine Library at Manila indicate that at times the quality of Philippine sugar was considered superior to that of Java, China and Bengal (India). Spanish and other authorities, while agreeing that it came to the Philippines from India, believed that it was first taken to China and Formosa and subsequently introduced from one or both of these countries to the Islands. (1) Fairchild, George E., Sugar Central and Planters News, Vol. 6, No. 9, August 1925, pp. 465-467 6 Spanish Commercial Policy The tariff revenue acts of the Philippines passed, dur­ ing the Spanish regime were derived from the Laws of the Indies. In 1511 the Council of the Indies was formed with the power of making laws for the Spanish colonies. Control over the commercial and shipping rights between Spain and her colonies was vested in the Casa -de la Contratacion or Board of Trade. It had also the power to impose heavy taxes on the colonists. In January 1593, a commercial policy was inaugurated, restrict­ ing the external trade of the Philippines to Spain and Mexico. Spain did not want her colonies to deal with foreign countries not only because of political jealousy but also because of economic competition. The lav/s of the Islands did not allow any foreigner to enter the Spanish colony without a permit from the Spanish authorities. Colonists found trading with foreign merchants were liable to the extreme penalty of death.^ In 1785 the "Real Campania de Pilipinas" was chartered by royal decree which gave it almost absolute control of the mercantile affairs of the Islands. This company was semi­ official in character, one-fifth of the shares being retained by the king and clergy. The company was required to spend 4 per cent of its net Income upon the development of the agri­ cultural resources of the country. The company's capital was freely expended in the establishment of numerous plantations of sugar, tobacco and coffee. a short time. Many of these flourished for only The Real Campania proved a. failure, partly because of lack of technical knowledge on the part of its officers, and (1) Egerton, Hugh Edward, Origin and Growth of the British Dominions, Oxford University Press, Aug. 1S03, pp. 45-44. 7 partly because of the opposition by merchants of Manila to its methods and to the assumption of special privileges by many provincial governors in the Islands. The company’s charter was terminated about 1830, at which time the trade of Manila was thrown open to foreigners. Subsequently the ports of Sual in Pangasinan on Luzon, Iloilo in Panay Island, Zamboanga in Mindanao Island and Cebu in Cebu Island were opened to foreign shipping.^ ^ A portion of Philippine goods exported to Mexico was kept there, while the other part was re-shipped to Spain. The Spanish King subsidized two ships that sailed only once each year and granted the privilege of using them to high officials and favorites. Under this restrictive policy the commerce of the Archipelago languished. Although relaxing its early policy of monopolizing Philippine trade, Spain continued to maintain extremely high tariff restrictions upon foreign imports as the tariff act of 1832 remained in effect until 1891.-^^ Spain en­ joyed preferential treatment in the Philippine ports for both imports and exports. The preferential treatment given by Spain to Philippine (1) TJ.S.D.A. Yearbook, 1909, pp. 521-522; Commercial Handbook of the Philippine Islands, Bureau of Commerce, Manila, 1924, pp. 17-18. (2) Spanish commodities were admitted at a uniform ad valorem rate of 10 per cent. Export duties were levied on principal ar­ ticles. The export duty on sugar was 5 cents per 220 pounds, while the tobacco duty was from $1 to $1.50 per 220 pounds. The products of the Philippines were given preferential treatment in Spain. After 1892 sugar from the Philippines, Cuba and Puerto Rico were subject to an import duty, higher than the internal tax paid on Spanish goods. United States Tariff Commission, Colonial Tariff Policies, 1922, p. 587; Commercial Handbook of the Philippine Islands, Bureau of Commerce and Industry, 1924, p. 49. 8 goods did not encourage the exportation of a great amount of sugar to the mother country. The high tariff duties were a handicap to the development of the foreign trade of the Islands. Free trade countries that desired to import sugar from the Philippines in exchange for their goods could not do it under such unfavorable terms. On the other hand, Spain because of its great distance from the Archipelago, especially before the opening of the Suez Canal in 1869, afforded a very limited mar­ ket for Philippine exports. These conditions partly retarded the development of the sugar as well as the other Industries of the Islands. Spanish Agricultural Policy The Real Sociedad de Amigos del Paid (Society of Friends of the country) organized in 1823, fostered the cultivation of sugar in the Philippines. This association sent cane seed from Panay Islands to Havanna. It inaugurated a movement to compile a series of memoirs, which resulted in an offer by a Hr. Sagra in 1874 of a gold medal for the best and most complete treatise of experiments on the cultivation of sugar. The Spanish author­ ities did not give any attention or consideration, however, to Hr. Sagra’s suggestion to develop the sugar industry. planters were therefore left to their own resources. The sugar At one time, about the middle of the eighteenth century, the author­ ities in Manila prohibited the exportation of sugar. The Spaniards were more interested in the tobacco monopoly (which employed compulsory labor) for revenue purposes . ^ (1) U.S.D^.A. Yearbook, 1901, pp. 522-524 In 1849 the King of Spain promulgated a decree granting to the religious order of the Recoletc Friars a monopoly In the ownership and commerce of Negros Island. This organization, with the financial hacking of the British vice-consul, KIcholas Lcney, aided the development cf the sugar Industry. 3y royal decree of November 26, 1887, a school of agri­ culture at Manila was ordered to he created for the purposes of theoretical and practical education of skilled farmers and overseers, and for the promotion cf agricultural development in the Philippines by means of observation, experimentation and investigation. This school was opened July 2, 1839. In addition to this institution courses in agriculture were given at the University of Manila and at the Municipal Athenaeum. Instriction was given and experimental work performed by the students in the study and analysis of soils, irrigation, seeds, methods of cultivation, testing new crops, meteorology as re­ lated to agriculture, cost of crop production, animal husbandry, plant and animal diseases an I the means for their repression, agricultural machinery, etc. The Real Sociedad de Amigos del Pais succeeded later in inducing the government to establish an experiment station on the slope of Mount Arayat in Pampanga Province, Luzon Island, where Manuel Sota demonstrated the value of scientific methods and advantages to be derived from irrigation. Subsequently the government organized a model farm at La Garlota, Negros (Occidental) Island near the then principal sugar producing district of the Philippines. This provision for agr’ icu.ltural research and education does not appear to have produced the results contemplated. Foreman, - - - - - In 1383, according to 10 "the budget provided the sum of if113,680 for a school of agriculture in Manila and ten model farms and schools of cultivation in the provinces. Instead of benefitting the colony, this sum went to furnish the salaries of needy Spaniards. Very little was achieved in the teaching of agriculture by the Spaniards. The produce of the land devoted to agricultural experiments was enjoyed by the officers." (1* Production of Sugar Under Spanish Rule Development in Luzon Island. The earliest commercial development of the Philippine sugar industry was probably in Pampanga Province on Luzon Island, which still ranks second among the sugar producing provinces. Extensive application of old type implements and methods of producing, manufacturing and packing of sugar which were of Chinese origin were found here. Pampanga and Pangasinan Provinces on Luzon Island pro­ duced less than 7,000 short tons of sugar per-year during the first decade of the nineteenth century, most of which was ex­ ported in Chinese sampans and other foreign vessels. There must have been a considerable expansion in sugar production by 1835, in spite of primitive methods of production and manufacture, since at that time 12,981 short tons were exported from Luzon Islands. In 1849 the production was reported as 26,455 short tons. The rapid increase in consumption of sugar throughout the civilized world which began about 1850 greatly enhanced the price and made the industry very profitable. This condition proved an encouraging factor to capital, and increased invest­ ment in the Philippine sugar industry quickly followed, re- (1) U.S.D.A. Yearbook, 1901, p. 523. 11 suiting in an enlargement of the area in cane and an increase in production up to 1895.^) Most of the larger sugar plantations in the Philippines were owned by the Spanish gentry. Two of the most prominent of these were located in Pampanga Province on Luzon Island. Mr. Piafael Gil, a member of one of the oldest families in Pampanga, managed his Hacienda de Fio from 1864 to 1898 with such success that at the end of the 34 years his sugar planta­ tion was the largest in Pampanga, with 2,000 people living on his estate. The first steam engine in Pampanga was installed by him on Hacienda de Pio. The first hydraulic mill was also constructed on his plantation at Porac. The late Don Valentin Arrastia, another 'member of one of the oldest Spanish families in Pampanga, also devoted himself to agriculture. Of the 1,234 acres in his estate he had 748 planted to sugar cane. He took a leading part in the adoption of modern methods of agriculture and the fostering of centrif.ugal sugar manufacture in his province. He aided in the establishment of the first bona fide sugar central in Luzon Island and was active later in the organization of the Pampanga Sugar Planters Association. (2) Development in Visayan Islands. while in Luzon Island the sugar industry was mainly controlled by Spanish gentry, develop­ ment on Negros Island, which has become the most important (1) (2) Pitt, Harold M ., The Sugar Industry of the Philippine Is­ lands, Handbook on the Sugar Industry of the Philippine Islands, Bureau of Agriculture, Manila, 1912, pp. 13-14; Handbook of Philippine Sugar Industry, Sugar Hews Co., Manila, 1929, pp. 1-4 Sugar Central and Planters Hews, Vol. 2, Ho. 5, May 1921 p. 157. 12 sugar producing area of the Archipelago, was largely promoted hy foreigners. Prior to 1836 when its ports were opened to foreign traders, sugar production on Negros amounted to only about 250 tons annually. In Negros, the sugar industry was first established in Saravia, Silay, Bacolod and Eaga dis­ tricts.^) The mills in Negros for grinding the cane were crudely made of wood and stone. It was the initiative of the British and American commer­ cial houses, in rendering financial aid and in introducing modern machinery and methods of cane production, that was large­ ly responsible for the development of sugar growing in the Visayan Islands, Panay and-Negros. Mr. Nicholas Loney, the vice-consul of Iloilo, Panay, continued to loan funds to the Spanish planters in the fifties and sixties. He was regarded as the founder of the sugar industry of these Islands and a monument to perpetuate his memory was erected at Iloilo after his death. The American trading firm of F.ussel, Sturgis and Company which was established near the end of the eighteenth century, grew to be one of the largest Institutions of its kind engaged in business in the Orient. It had branches in Manila and Iloilo, and the latter branch was extensively' engaged in the exportation of sugar from. Negros and Panay Islands. failed in the panic of 1873. The company The sugar trade of these Islands was carried on afterward by British, American and Swiss mer­ chants and bankers. They made extensive use of banking credit to provide the capital required from one season to another. (1) V/alker, Herbert S., The Sugar Industry in the Island of Negros, Handbook on the Sugar Industry of the Philippine Islands, 1912, p. 16. J-O nil of these commercial agencies advanced money to the plant­ ers and took payment after harvest in the form of sugar, which they extensively exported. This cooperation bot'.veen finan­ ciers and planters resulted in technical improvement and in an increase of product ion up to 139 5 (table 1). Table 1. Development of Sugar industry on Megros Island', 1350-1393. d ) : 1850 Inhabitants 50,000 Production of sugar in metric tons 190 Wooden mills Hills run by steam Hills run by water power Mills of iron, run by animal power Steam plows Tramways (for transportation cf cane) - : : 1330 200,000 39,096 1393 320,000 113,850 — — 59 17 495 - 274 47 500 3 23 (1) Walker, Herbert S., The Sugar Industry in the Island of Megros, Handbook cf the Sugar Industry of the Philippine Island, 1912, p. 15. In 1360,according to P. Tchaus, the first steam driven mill was introduced In Hegrcs and by 1354 seven such mills were in operation. The number cf steam mills, iron mills and mills operated by water power increased rapidly and displaced the wooden mills. The installation of these modern farm mills re­ sulted in a higher recovery cf the sucrose content, thus con­ tributing tc the increased sugar output. Production on the Island v/as 600 times greater in 1893 than in 1350. The sugar olanters in ITegros began to realise at this stage cf the sugar Indus try the value and use of labor-saving devices such as steam plows, steam mills and tramways. The industry created a growing demand, for labor and it finally furnished employment for thousand of laborers not only from Megrcs but also from roighbcring islands. From thus period until the .-.merican 14 administration, Negros Island was one of the leading sugar producing districts of the Philippines. In the 1903 census, Senior Jose de Luzuriaga stated that the crop of 1893 of 300,000 tons was the largest ever harvested up to that date.^^ Sugar Exports Puring the Spanish Regime The earliest available record of sugar exports of 2,063 short tons was in 1780. There must have been earlier exporta­ tions of sugar to China from the Philippines because the tools and methods of -grinding cane and' manufacturing of sugar were introduced in the'Islands by the Chinese. Part of the Philippine sugar exports was shipped in the Chinese sampans. The Chinese conducted most of the early operations of manufacturing, trans­ portation and sale of sugar in Pampanga Province on Luzon Island and In the provinces near Manila. The throwing upen of Philippine commerce to foreign merchants in 1834 was accom­ panied by an Increase of sugar export to 12,980 short tons in 1835. Sugar packed in bayones (bags made of leaf of the buri palm) was carried by outgoing vessels In their holds as stowage cargo. During this period there was a considerable exportation of the lower grade sugar to Singapore and Macao. The completion in 1869 of the Suez Canal added greatly to the commercial development of thevIslands. Sugar which was one of pelago was exceeded in value the leading exports of the Archi­ only by Manila hemp in 1854 (table 2). From 1874 to 1883, sugar was the principal export of the Islands (1) Ibid, pp. 14-16: Handbook of Philippine Sugar Industry, 1929, pp. 2-4; Pit, Harold 11, The Sugar Industry of the Philippine Islands, Handbook on the Sugar Industry of the Philippine Islands, 1912, p. 14. J-O or I I p e r c e n t and averaged over 47 per cent more^than that of Manila hemp and over 36 per cent higher than that of tobacco. The average of the 1884-1893 sugar exports was nearly equal that of Manila hemp. The sugar export declined during the close of the Spanish rule. The quantity of Philippine sugar exported increased stead­ ily from over 42,900 short tons in 1849 to nearly 247,500 short tons in 1895 (table 3). However the exports of other products were expanded more rapidly during the last fifteen years of the Spanish rule, as indicated by the decline of sugar exports to 35 per cent of the total exports during 1890-1895. Table 2. Philippine Exports, 1854-1895. (1) Years : Manila : Coconut : Tobacco : product : Sugar : hemp :(per cent):(per cent):(per cent): (per cent) 1854^1 ) 1874(2 ) 1875 1876 1877 1878 1879 1880 1881 1882 1883 Average 1874-83 26 35 49 50 54 48 49 49 51 43 46 47.4 41 27 19 27 21 23 20 23 36 33 29 25.8 0.41 1884 1885 1886 1887 1888 1889 1890 1891 1892 1395 Average 1884-93 30 42 35 32 32 36 34 27 41 47 35.6 1894 1895 33 31 • • : Others :(per cent - 17 20 19 6 8 12 7 11 3 13 11 11.0 15.59 18.00 13.00 17.00 17.00 17.00 24.00 17.00 10.00 11.00 14.00 15.80 32 27 22 42 42 41 32 50 36 35 35.9 0.01 0.06 0.07 0.11 0.11 0.29 0.13 -. 0.26 0.05 0.12 8 11 10 8 13 9 12 10 13 11 10.5 29.99 19.94 32.93 17.89 12.89 13.71 21.87 13.00 9.74 6.95 17.89 44 34 0.18 - 10 13 12.82 17.00 27 59 6.00 1898 8 (1) Commercial Handbook of the Philippine Islanas, Bu. cf Ccmmer ce, Manila, 1924, P. 40 (2) Philippine Bureau of Commerce of industry, Manila Statistical Bulletin Ho. 2, 1919 , p p .’126- 140 16 Sugar export constituted on the average from a third to a half of the total exports of the Philippines, being as high as 58 per cent in 1873, in spite of the use of antiquated equipment and methods in its production and manufacture. Table 3. Years 1849-59 1860-69 1870-79 1880-89 1890-95 (1) Sugar Exports and Proportion of Total Exports of the Philippines, 1849-1895.' : ~: Average annual export (short tons) 43,122 63,077 118,994 199,161 247,408 : : Per cent of total exports 34.0 33.0 49.4 39.6 35.4 Philippine Sugar Association, Facts and Statistics about the Philippine Sugar Industry, Sugar News Press, Manila, Aug. 1928, p. 18j Philippine Bureau of Commerce and Industry, Statistical Bulletin No. 2, 1919, pp. 136-137. From 1861 to 1865, Great Britain was the principal market for Philippine sugar, taking 47 per cent of the total sugar export (table 4)._ Australia took 23 per cent, while the United States imported more than did China and Japan although these countries are nearer to the Philippines. The mother country, Spain, took only 1 per cent of the total sugar exports. Great Britain was the leading market during-.; -the early period because the British capitalists who aided the development of the principal sugar districts, were at the same time the leading importers of sugar into the British markets. The modern mill machinery which was imported by the British Vice-consul, Mr. Nicholas Lcney, was loaned to the sugar planters in Negros Is­ land and in Iloilo on Panay Island. The British traders also were influenced in exporting sugar to Australia during this period as the (Queensland sugar Industry was not yet highly developed. 17 Table 4. Distinations of Philippine Sugar Exports. (!) : tJnited : ' fShina & : Great : f~~ Year : States ; Canada : Japan :Britain : Spain ;Australia ________ :per cent':per cent:per 'cent:per cent:per cent:p'er' 'cent 1861-65 1891 (1) 16.0 34.0 0 26.4 13.0 11.3 47.0 28.0 1.0 0.2 23.0 0 Sugar Central and Planters hews, Vol. 2, ho. 11, Nov. 1921 p. 452; Philippine Bureau of Commerce and Industry, I.ianila, Statistical Bulletin ho. 2, 1919, p. 136. The United States, Great Britain and Canada were -the chief markets for Philippine sugar in 1891, taking''34, 28 and 26 per cent, respectively, of the total exports (table 4). The propor­ tion exported to the United States had materially declined 'since 1889 (table 5). Spain Imported practically no Philippine sugar, due probably to her nearness to Cuba and the sugar beet growing countries of Europe. China and Japan have never been an important market for Philippine sugar except during a short time In the nineties, although there were numerous Chinese and Japenese merchants in the Islands who were exporting, and even though trans­ portation costs were lower to these two oriental countries than to the United States. The United States was a much greater importer of Philippine sugar than Spain, in spite of the latter’s political control of the Islands and in spite of the duty imposed by the United States ■on Philippine and other foreign sugars.. During the last half century of the Spanish domination in the philiopines, the United States played an Important part in developing the sugar industry. The sugar exports to the United States increased from an annual average of all exports of 23 per cent during 1849-1859 to 54 per cent in 1830-1891 (table 6). ) The United States became one of the leading markets of Philippine 18 Table 5. Sugar exports and Proportion to the United States", 1876, 1880-1889. (1) Sugar exports : Total sugar :Per cent: to Year : exports :of total: United States :(metric tons. : exports: (metric tons) * « • * : Per cent of : sugar exported : to : United States 1876 130,547 50 68,830 53 1880 181,190 49 102,286 57 1882 1883 1884 1885 1886 1887 1888 1889 - 150,422 196,834 122,128 204,222 184,939 171,754 160,987 228,468 43 46 30 42 35 32 32 36 78,983 127,446 85,172 135,052 117,452 111,440 83,718 123,762 53 65 70 66 63 65 52 55 (1) Philippine Bureau of Commerce and Industry, Statistical Bulletin ho. 2, 1919, p. 136. 19 sugar, partly because of the active part played in loaning funds to the sugar planters in Negros and Fanay Islands by the American capitalists who were also leading exporters of Philippine sugar. Table 6. Year : 1849-59 1860-69 1870-79 1880-91 (1) Fhiliuoine Sugar Exoorts to United States* 1849-1891 U ) Average annual export to United States 8,663 12,720 43,299 93,844 • • : Per cent of total exports 22.7 23.6 39.6 54.0 Philippine Sugar Association, Facts and Statistics about the Philippine Sugar Industry, Aug. 1928, p. 18; Philippine Bureau of Commerce and Industry, Statistical Bulletin No. 2, 1919, pp. 136-137. Status of the Sugar Industry at the Close of HThe Spanish' Regime The Philippine -sugar industry did not progress rapidly during the Spanish rule because of the limited trade between the Philippines, Spain and Ilexico, the high tariff duties imposed by the Spanish Government, and because there was no government institution in the Islands primarily devoted to the technical to study of the sugar industry or to its efficient organization # and administration. Improvement was made in the Islands of Negros and Panay by the introduction of some modern farm implements and modern muscovado sugar mills, but this movement had not gone far in improving the methods of production and manufacturing musco­ vado sugar into higher grades of centrifugal sugar. There was a great loss of the suc-rose content, due to the muscovado mills not being properly equipped. the handicap of the industry. These antiquated methods added to The resulting low grade muscovado zu had a very small demand In the United States and other ad­ vanced countries, because Java, Cuba, Hawaii and the beet pro­ ducing countries of Europe were producing higher grades of 96° centrifugal and refined sugars which were in greater demand. There was no governmental financial institution that aided the sugar planters in obtaining capital. The development of the industry in Negros and Panay was wholly dependent upon foreign capitalists who gave financial aid to producers, usually at high interest rates. These foreign capitalists, who were also mer­ chants and. shippers, received payments of their loans from the planters in terms of sugar after harvest. The sugar producers were forced to sell their sugar to the merchants usually at low contract prices. 0 The Spanish Government did not regulate labor in the Archipelago. The sugar planters suffered losses because laborers frequently disappeared after receiving advanced pay. It was often difficult for sugar producers to get sufficient laborers to work on their plantations. Transportation facilities v/ere lacking. inadequate. Highways were 4 These also added to the difficulties in the develop­ ment of the industry. During the insurrection against the Spanish Government in 1896-1897, and the war between Spain and the United States in 1898, the sugar plantations were neglected. Sugar planters, as well as the rest of the population, felt the effects of the wars which caused a decline of sugar production. CHAPTER II GOVERNMENT AIDS TO SUGAR INDUSTRY UNDER THE AMERICA® ADMINISTRATION Situation Following the Spanish-American Ear The Philippine sugar industry was neglected at the close of the Spanish period and during the first ten years of the American occupation. The scientific methods of production and manufacturing of sugar had not been adopted and the low grade muscovado was thh only type exported. The insurrection against the American sovereignity in the Archipelago which began in 1899 and continued for several years was followed by the epidemic of rinderpest which killed the-greater part of the working animals. industry. These handicaps retarded the progress of the It was not until after 1910 that modern methods were more rapidly adopted, resulting in the manufacture of 96° centri­ fugal sugar which was demanded by United States and other countries. In order to change from the primitive equipment, the Philippine sugar industry after the Spanish-American Tar needed favorable legislative action to stimulate foreign and domestic capital investment. The industry also needed more adequate credit facilities and technical institutions for training Filipinos, expecially along the lines of production, organi­ zation and* administration. The development of a more assured market outlet was of special importance. Investment of capital was largely dependent on the terms under which sugar produced 22 in the Islands would be admitted to that country which had now assumed the responsibility for the administration of the Archipelago. Opening the American Market to Philippine Sugar Tariff Arrangements, 1898-1909» At the time when the Philippines was surrendered to the United States under the Treaty of Paris (December 1898), the Philippine sugar was dutiable under the rates established by the Dingley Tariff Act of 1 8 9 7 There were no tariff reductions or preferences given to the goods of the Islands exported to the United States nor to the American commodities entering the Philippine markets from 1898 to 1902. The treaty which permitted the Spanish ships and' goods to enter the Philippines on the same basis as these of the United States hindered the inauguration of free commercial relations between the Philippines and the United States. « The abatement of 25 per cent of the full duty on the Philippine sugar under the United States Tariff Act of 1902 (1) The tariff rate on refined sugar and sugar above No. 16 Dutch standard of color was 1.95 cents a pound, while the rate on 96° raw centrifugal sugar was 1.685 cents per pound, but an additional amount was paid for each degree above 75 degrees amount­ ing to 0.035 cents a pound, and sugars not above No. 16 Dutch standard of color and above 75 degrees by the polariscope test had a rate of 0.95 cents per pound. Handbook of the Philippine Sugar In­ dustry. 1929, p. 41; United States Tariff Commission, United States-Philippine Tariff and Trade Relations, Report No. 18, 1931, p. 2. 23 gave no practical benefit to the sugar enterprise.^ ^ it did not encourage the American and Filipino capitalists to invest their money in modern centrifugal c e n t r a l s . M u s ­ covado remained practically the only kind of sugar exported. Preferential Trade Arrangements, 1909-1915. The enact­ ment of the Payne-Aldrich on August 5, 1909, provided for the entry of 336,000 short tons annually of the Philippine sugar into the United States. (3) ' During; the application of this act all sugar from the Islands entered the United States free of duty because the exports to the latter country did not reach this limit until 1924. The passage of this Act immediately caused an inflov* of American capital into the Islands for the development of the sugar industry. The first modern centrifugal sugar central was successfully established at San Jose, Mindoro Island by (1) (2) (3) The act passed on March 8, 1902 provided that the Philippine commodities not on the general free list of the act of 1897 should be given a 25 per cent preferential reduction. The Products of the United States received by the Philippines were to pay the general Philippine import duties. Any export duty collected in the Archi­ pelago on shipments which were subject to the United States tariff duties must be deducted from the American import duties. All the import duties collected in the United States on Philippine products vvere to be paid into the Philippine treasury. United States Tariff Commission, United States-Philippine Tariff and Trade Relations, F.eport ho. 18, 1931, p. 2. A central is a place where a large specialized can-sugar mill grinds the cane and manufactures it into centri­ fugal sugar. This Act was passed under the administration of President Taft, who had been the first Civil Governorofthe Philip­ pine Islands, and who was a strong advocate of a liberal commercial policy between the United States and the Philip­ pines. He believed that such a policy would serve to devel­ op more rapidly the natural resources of the Archipelago and benefit the people. United States Tariff Commission, United States-Philippine Tariff and Trade Relations, 1931, pp. 2-3. an American company in 1910, in spite of the opposition of the Philippine government officials and the great pioneering difficulties encountered by the company.(1) >'\N JaifeCkN IH AI. fcVjfatf tjM jitm u i u itjj , r« i , j j . r i< » (r t l . Pig. 1. First Sugar Central in the Philippines The government officials feared the exploitation of the Islands by American and other foreign capitalists. The Talisay sugar central, Negros Island, which was erected with Filipino capital, began operation in 1912. Two r cooperative sugar centrals, one established at San Carlos, Negros Island, and a second at Canlubang, Laguna Province on Luzon Island, both erected by Americans, began operation in 1914. There were at least*ten modern centrifugal sugar cen­ trals built after .the passage of the Payne-Aldrich Act, during 1909-1915. These plants made possible both larger scale pro­ duction and higher grade sugar (95°) centrifugal) than could be obtained from the old farm mills which produced only muscovado sugar. Unconditional Free Admission, 1915-1954. The Philippine sugar industry was stimulated by the Underwood-Simnons Tariff act of 1913 which provided for the removal of the limitation on the quantity of Philippine sugar to be admitted free of duty (1) Handbook of the Philippine Sugar Industry, Sugar News Press, Manila, 1929, pp. 6-7. 25 into the United States. The Tariff Act of April 27, 1916, effective Hay 1 of the same year repealed the provision of the Tariff Act of 1913 dealing with the transfer of all sugars to the free list. The Act of '1916 did not limit the amount of Philippine sugar free of duty. The preferential duty on Cuban sugar and the tariff duty on other foreign sugar were restored. This Act guaranteed a tariff protected free market in the United States. The sugar centrals increased rapidly during this period until they numbered 19 in 1920. The production increased from 127,993 short tons in 1909 to 234,457 in 1919. The Eordney Emergency Tariff Act of 1921, the FordnevMcCumber Act of 1922 and the Smoot-Hawley ^.ct of 1930 pro­ tected further the Philippine sugar (table 7). It raised the' duty cn foreign sugar from 1.256 to 2.5 cents a pound on 96° centrifugal sugar, the Cuban preferential duty on 96^ centri­ fugal sugar from 1.0048 to 2.00 cents a pound, and cn Cuban refined sugar from 1.0752 to 2.14 cents a pound. The Cuban sugar producers therefore were not given as much advantage as Hawaiian and Puerto Rican sugar planters. The Philippine sugar producers received only partial benefit of their free (1) Duty cn all sugar reduced 25 per cent from and after March 1, 1914 and providing all sugars be transferred to the free list May 1, 1916. The duty on 96° sugar from Cuba was 1.0048 cents per pound and from foreign countries 1.256 cents per pound. The duty on refined sugar from foreign countries other than Cuba was 1.36 cents per pound. United States Tariff Commission, United States-Philippine Tariff and Trade Relations, 1931, Report No. 18, p. 3; Handbook cf the Philipine Sugar Industry, 1929, p. 42. 26 market in the United States because their cost cf transpor­ tation was greater than that of Cuba, Hawaii and Puerto Rico. The favorable trading relations with the United States aided in further increasing the number of modern centrifugal sugar centrals to 45 in 1932 and the production to over 1,102,000 short tons., or to 867,650 more than in 1920. Table 7. United States Tariff Rates on Sugar, 1897-1930.^^ Tariff Acts Luty on 96 centrifugal sugar : Cuban rate on Full rate *. Cuban rate : refined sugar (cents per lb.)-.(cents per lb.) :(cents per lb.) July 24, 1897 Aug. 6, 1909 Mar.l, 1914 May 28, 1921 Sent. 22, 1922 June 18, 1930 (1) 1.6850 1.3480 1.0043 1.6000 1.7648 2.0000 1.6850 -1.68 50 1.2560 2.0000 2.2060 2.5000 1.8031 1.4425 1.0752 1.7121 1.8885 2.1402 Lippert 'S. Ellis, The Tariff on Sugar, The Rawleigh Foundation, Freeport, Illinois, Jan. 1, 1933, p. 48. Government Aid to Sugar Centrals Modern sugar centrals were necessary in order to replace the thousands of plantation sugar mills which manufactured low • * grade muscovado sugar which was demanded only in the Chinese and Japanese markets. The cooperation of the Philippine Government was therefore essential for this development. On October 15, 1914, Governor General Harrison recommended tc the Philippine Legislature that cooperative agricultural associations to pro­ vide small farmers with credit facilities be created and re­ gulated. He recommended also that the government cooperate In the construction of sugar centrals in places where they were needed. In compliance with the latter part cf this recommendation, Act. Ho. 2577 was passed on February 4, 1916 creating a Sugar 27 Central Board Consisting of the Governor General, the Speaker of the Philippine Assembly or their authorized representatives, and three members appointed by the Governor General with the consent of the Philippine Commission. This board v/as charged with the duty of promoting and aiding the sugar industry through the establishment of sugar centrals. Insular Land Policy During the Spanish regime the agricultural land best adapted to sugar cane production was' under monopolistic control of the Spanish religious corporations and private individuals. In 1903 the public domain was increased by 396,690 acres pur­ chased from Spanish religious societies and wealthy Spaniards. Under the American Administration, land for production of sugar and other crops has been made available Jpy the Philippine Government in the form of homestead grants, lease holds, (1) The Sugar Central Board was empowered: ff(a) to guarantee to the .concern establishing a sugar central the pay­ ment of its value and interest from the net proceeds of the sugar manufactured, after deduction of fifty per cent of the gross product,'which shall be distributed pro rata among the -producers of the cane milled and after the further .deduction of the operation expenses. "(b) To purchase from a corporation or corporations composed of owners of land planted in sugar cane, bonds issued upon the security of the property of said corp­ oration or upon the security of the first mortgages upon the land or part of the land of the individual owners who are stockholders In the- said corporation, or upon both securities mentioned; provided, however, that the base value of the land received as security for the said bonds shall not exceed the value certified by an appraiser who shall be appointed to inspect and appraise the same. M(c) To make loans secured by first mortgage tc a corporation or corporations owning and operating a sugar central or sugar centrals for addition and the improve­ ments thereto.n Rafael R. Aluman, Row, The Fast, Present, and Future cf the Philippine Sugar Industry, hanila, Vol. 18, To. 49, Oct. 15, 1932, pp. 10-12. 28 sales of public lands or sales of friar lands under Act. No. 926, enacted by the Philippine Commission on October 7, 1903. The Act of the United States Congress cn July 1, 1902 placed a limitation of 2,530 acres on land holdings in the Archipelago by agricultural corporations. This limit has never been changed even though the Philippine Legislature was empowered by the Act of Congress of August 29, 1916 to legislate concerning landholdings in the Islands. The'Homestead .act of 1903 allowing 40 acres to be ac­ quired by any Filipino or American for agricultural production was amended by Act ho. 2874 cf November 29, 1919 to permit 60 (2) acre homestead.'1 ' The total number of applications for home­ stead during the five year period 1905-1910, was8,951,cover­ ing a total area of 285,007 acres « The 1903 Public Land act permitted only 40 acres of land to be purchased by any Filipino or American from the Philippine (1) (2) (3) United States Tariff Commission, United States-Philippine Tariff and. Trade Relations, Report No. 18, Second Series 1931, p. 29. The Homestead Lav/ of October 7, 1903 provided that any citizen of the Philippines or of the United States over 18 years -of age, or the head of a family who did not own more than 60 acres (24 hectares) in the Philippines, might enter an application for a homestead not exceed­ ing 60 acres of agricultural land on the public domain. After filing of the application and with the approval of the Director of Lands, possession.might be taken upon the payment of S5 as an entry fee. The period granted by the .law to homesteaders for the improvement and cultiva­ tion of their claim was from 2 to 5 years. The appli­ cant, was entitled to get a deed upon payment of an addition­ al amount of 35, after he has complied with all require­ ments of the law. United States Ear Dept., Bureau of Insular Affairs, A Brief Resume of the Rules and Regu­ lations Relating to the Disposition of Public Lands in the Philippine Islands. 19^54, p. 1. Forbes, ~r. C., Phil. Islands. Ilanila, 1910, p. 128. 'The Friar Land-Inquiry, Government. This was increased to 250 acres by the amend­ ment in 1919 and to 360 acres -under the Philippine Land Lav; of 1925 (No. 3219). The period of payment was extended from 5 to 10 years by this last law. Thder the original act, any person of legal age could buy not more than 40 acres of the ,ffriar landf' which had been purchased previously by the Govern­ ment. A corporation duly registered in the Philippines was granted the privilege of purchasing as much as 2,500 acres.(1) The sale of "friar lands" like that of other public land, was at public auction. The total area sold by the Government dur­ ing 1905-1910 was 24,922 acres involving 332 sales. Under the 1903 Leasing Act any citizen of the Philippines or of the United States, of lawful age (21 years), could lease from the Philippine Government 2,560 acres. Corporation or an association could lease 2,560 acres of land provided it was organized and constituted under the laws of the Philippines or of the United States, and if authorized to transact business in the Islands and if at least 61 per cent of the capital stock belonged wholly to the citizens cf the Archipelago or the United (1) Citizens of countries, the laws of which grant to citizens of the Archipelago, the same right to acquire public lands as to their own citizens, may, while such laws are in force, with the express authorization of the legislature, purchase any parcel of agricultural land not more than 250 acres. Lands sold by the government aopraised by the Director of the Bureau of Lands, with the approval of the Secretary of Agriculture and Natural Resources. The minimum selling price is fixed by the government, and the payment may be in full or install­ ment annually for 12 years, with interest at 4 per cent. The appraised value of land must at least be equal to the expense or that which may be incurred by the govern­ ment is connection with the application for purchase. A deed is issued after all is paid. Commercial Handbook of the Philippine Islands, 1924, pp. 72-77; United States Tariff Commission, United StatesPhilippine Tariff and Trade Relations, Ho. 18, Second Series, 1931, p. 29. States. An individual or corporation that owned land could also lease additional land to "bring the total up to not more than 2,560 acres. The lease could extend for a period of not more than 25 years and was subject to renewal at the option of the lessee. The annual rent could not be less than 3 per cent of the value of the land.^1 ^ The total area leased from 1905 to 1910 was 123,759 acres including 185 leases. The Fublic Land Act of 1924 (No. 3164) permitted any native of the Philippines to *apply for free patent. The deed would be given provided the farmer did not own more than 60 acres of land and provided he or his predecessors had since July 4, 1907 or prior to that date continously occupied and cultivated the tract of public land. The filing of free patent applications for lands was limited to December 31, 1938 which is the last day when freepatent applications for lands will be accepted. (2) The total number of free patent applica­ tions during 1905-1910 was 15,877, covering 130,039 acres. Under the land acts, 563,727 acres of government land were obtained by 25,345 individuals or corporations during 19051910. During 1931-1932, the only other years for which data are available,"226,055 agres were disposed of by free grant, sale or lease to individual farmers or corporationsV~ ;As during the earlier period the homestead grants were the most important. This favorable land policy of the Philippine Government has aided the sugar planters and others to acquire a large (1) (2) U. S. War Dept., Bureau of Insular Affairs, Brief Resume of the Rules and Regulations Relating to the Disposition of Public Lands in the Philippine Islands, 1934, pp. 8-10. Ibid, p. 11. 31 area.of agricultural land for the production of sugar cane as well as for other types of farming. For example, the San Jose sugar estate in Mindoro, the Calamba sugar estate in Laguna Province (Luzon Island) and other large sugar plan-, tations in Luzon and Visayan Islands covering thousands of acres, were acquired by the sugar planters from the Philippine Government for cane production. Agricultural Credit measures The Spaniards did not create any government credit insti­ tution during their sovereignity in the Islands, whereas the Americans have fostered the development of government credit facilities as part cf their program to aid the farmers. The Agricultural Bank which was created on October 16, 1907 (when the first Philippine Assembly was organized) for the purpose of extending loans to the planters for the development of their farms, aided only to a limited extent the progress of sugar production in the-Islands. The §500,000 capital stock of the bank which was appropriated by the Philippine Legis­ lature from the general fund was inadequate to fulfill the needs of the sugar producers. The bank lasted only 8 years, when its functions were transferred to the Philippine National Bank which was established by the Philippine Legislature in 1916. The purpose of this bank was to finance the domestic commerce and the development of natural resources. The sugar planters have been able to borrow frcm it to the extent of 50 oer cent of the value cf the land and improvements for the purpose of erecting sugar centrals. ' This bank has also loaned, money to the sugar planters for cane production and for exportation of sugar, as well as for Importation of fert­ ilizers, etc. Lower interest rates have been charged by this bank than by the private banks or sugar merchants. The bank financed the construction of six sugar centrals, partly through the sale of bonds during the boom period prior to 1S20. During the depression of 1921 when losses were in­ curred, the centrals could net pay the principal and interest on the bonds or the bank loans. The bank placed them under its control through legal procedure for a few years and then turned them again to the Filipino companies when the latter were able to pay the farmer by installments. The bank has aided materially in encouraging the Fili­ pinos in their participation in the development of the sugar enterprise. The government’s financial aid has been one of the most important factors in the rapid progress of the in­ dustry . Educational Provisions Philippine ^Bureau of Agriculture. The Bureau was or­ ganized under the Act of April 30, 1902 and has aided in collecting and purchasing sugar, cane seeds for experimental research and for distribution to sugar planters. It has also improved the varieties of sugar cane by careful selection and breeding. (1) Rafa'el K. Alunan, how, The Past, Present, and Future of the Philippine Sugar Industry, Vol. 18, 4th Series, Ho. 49 Oct. 15, i§32, p. 12; George, Edwin 3., Philippine Trade Financing and Exchange, Trade Information Bulletin ho. 49, July 1926, p. 11: Commercial Handbook of the Philippine Islands, 1924, pp. 19-20. 33 The first chief of the Bureau of Agriculture visited New Orleans, Louisiana, and Charleston, South Carolina to select modern farm machinery used in cultivating sugar cane and rice. He procured a large consignment of general agri­ cultural equipment. In November 1902, the Philippine Government appropriated $25,000 to carry on the work at La Carlota in the western part of Negros Island. This experiment station’s major pro­ ject has been the growing of cane for experimental purposes as well as.for production of points (puntas)^ ^ f o r distri­ bution to planters. Alabang Stock Farm, Rizal Province, Luzon, has been used for producing cane for distribution. The plant at Singalong Experiment Station is employed mainly for quarantine work on cane diseases and for experimentation on varieties imported from abroad. The Lamao Horticultural Sta­ tion is maintained for propagation work with seedling varietie Experimental research was started in 1914 for the purpose of producing new varieties suited to Philippine conditions, resistance to drought, excessive water, insect attacks and can diseases. The Bureau distributed about 37,300 points of dif- ferent varieties to the farmers in 1913. (2 ) Experts .of the Bureau of Agriculture are conducting demo stration work to teach the. sugar planters the value of scien­ tific methods cf sugar cane production, such as the selection of seeds for planting; methods of propagation; modern methods (1) Points or puntas is the white top of the sugar cane used for seed (20 to 25 centimeters). Hernadez, Adriano, Sugar Central and Planters News, Vol. No. 4, Oct. 1920, p. 25. 3 4 of preparation of land for planting; methods of planting, cultivating, harvesting and milling; the value of fertilizers and insecticides; use. of modern machinery; modern manufac­ turing methods; and handling of locomotives for transpor­ tation of sugar cane and sugar products. Agricultural Education. In 1919 a hill providing an appropriation for a miniature sugar central at the Agricul­ tural College of the Philippine University was approved by the Philippine Legislature.^^ Fig. 2. Since then Dr. Manuel L. Rozas, Miniature Sugar Central at the Agri­ cultural College of the Philippine University former Head of the Chemistry Department and now the Under-Sec­ retary of Agriculture and Commerce, has offered courses for students majoring in sugar technology. These courses are nart cf the college curiculum, leading to a degree of Bachelor of Science in Sugar Technology. Students are trained in de­ signing and laying-out drainage and irrigation canals and plots for experimental work cn sugar plantations, and in the prin­ ciples and practice of the analysis of sugar and its by-products. The students also study the problems of organizing and oper­ ating sugar centrals. (1) Dr. N . B. Mendiola, Head of the Agri- Sugar Central and Planters Hews, Vol. 2, Ho. 3, Nov. 1919, p. 20 3 5 nomy Department of the same college has offered courses dealing with sugar cane varieties, production practices, selection of natural or hybrid seedling adapted to the dif­ ferent cane regions of the Islands, and with other modern methods cf propagation. The college has distributed a great number of high-yielding sugar cane points to sugar farmers, "any of the graduates of this college are holding responsible positions in sugar centrals. The technical and business training of students has materially aided the sugar industry of the Archipelago. The Philippine Bureau of Science. The Bureau has aided the sugar planters in the control of those pests and diseases which were injurious to the sugar cane. The scientific re­ search conducted by this bureau has caused the majority of farmers- to plant the more resistant varieties of sugar cane which have also a high sucrose content. GRAFTIB III DLVLLCPLLIT SUG.-.7 P~CLTICIIGL SIR Cl 1900 Orovth and Localization of Cane Production The tv/o .islands, Luzon and "’ogres have produced ever 90 per cent cf the sugar cf the Philipuines since 1900. Panay has averaged S per cent v/hils the production cf ;indero, lindan&o, Palawan, harindu&gui and 3a tan93 Islands has been insignificant. The area utilized In sugar cane production in the tv/o islands, Luzon and Tegrcs, during 1S02-1S03,averaged 444,270 acres. The acreage for the entire country was only 205,425 in 1910. This was increased, to 640,275 In 1932. The average acreage under cane cultivation was 352,363 in 1910-1914, 560,199 in 1920-1S24 and 633,357 in 1930-1932. Luzon has led in land area devoted to sugar cane pro­ duction since 1900. In 1919-1920 Luzon devoted 243,357 acres cf land for the cultivation of cane or 1.6 times mere than that of Legrcs Island (table 6). Cf the total acreage (190,592 acres) under sugar production in Visayan Islands, the area occupied by Legros constituted 81 per cent. Pansy Island used 23,725 acres while 'Iinhere Island produced only 4,980 acres oi cane. in i; o* L-_*e s j -c. v' ;r r Luzon Island reached 321,07o acres cr 52 per cent mere than in which the Vi say an group^v/as enpanded to 54 per cent until it average: only 3 psr cent less than that cf Luzon Island. Luring the sane oeriod the cane acreage cn Panay Island was core ^po'l o O # Q -V-, cage of Sugar Cane, cy : Islands I slands.( -) 1919-1920(1 ) : 1930-IP31 ( ^ average : average ) i : i on o (0 ) 521,075 315,525 V i saper. I sland s Negros Island Fanay Island Others 13 0,592 153,727 23,725 13,138 311,650 238,062 50,187 23,401 308,000 239,150 47,900 C. 2,100 L'jndor o I s'!and %4 243,357 o 00 c> Luzon Island 7,212 Lindanao Island 2,457 2,312 Falav/an Island 122 ' U W y ^ -Tr\ ii U U 7O r j rC KJ 7- - Liarindu que 97 537 525 Batanes Island 80 200 125 441,685 643,085 535,775 Total (1) Hines, Clove "r., Economic He sconces and Develop'd ent of the Philippine Islands, HanI la 19 20, p. 53. (2) Philiooine Hep artment of -*gr icultvrs and Natural Hescurces, Annual Hepopt, Hanils., Dec. 31, pp. 217-218. (3) Philippine _epart:nent of Agriculture and Commerce, tical Handicck of the Philippine Islands, "anils, : Hunter, 1333, pp. 41-43. 3 8 doubled. .In 1932, the area or all of the islands except hegrcs was slightly lower than -in 1931. In 1902-1903 the production on Luzon and ITegros Islands averaged 198,654 short tens. The output of the entire Philip­ pines declined during the. nest few-years since the total produc­ tion, was only 130,048 short tens in 1910. Production v ia s steadily increased to 1,279,040 in 1952-1933. (Table 28,p.lOla) , The average production was 201,278 short tens 'in 1910-1914, 322,360 in 1920-1924 and 1,030,966 -in 1930-1933. Sugar production was most advanced on ITegros Island in 1SG2-1903 since this island had 40 per cent of the cane area and produced 52 per cent cf the sugar, o/hile Luzon contained 50 per cent of the area and. produced 38 per cent of the sugar, hegros even during the Spanish regime, received,financial aid from foreign Investors who introduced better equipment and methods of production and manufacture of the muscovado sugar. In 1932 Luzon Island produced 402,557 short tons of 96° centrifugal and panocha^^ sugars while TTegros Island produced 361,208 tons on a 24 per cent smaller acreage, indicating high­ er yield which were partly due to the more advanced development of sugar production on the latter island. The production of Pegros Island constituted over 87 per cent cf the total output of the Vissyan group both of centrifugal and par.ccha sugars, and ever 56 oer cent of the entire production cf the Thillnrines. (1) Panccha is a low grade sugar prepared in the fortfof cake molded in half shells cf coconuts. The size varies from 1 to 2 pounds and Is consumed generally throughout the hr chi* pelago. (2) Stine, Dr. 0. C., !'. S.D. A. -.-3u. of ngr. Lccn., 1934 (arranged). ) 3 9 Place of Sugar Cane Production in Philippine Agri­ culture . J Area Devoted to Sugar Cane and other Principal Crons. P.Ice and corn are the two important food Philippine Islands, while sugar, coconut, aba-ca, tcbs cco, maguey, coffee, and cocoa are the leading cash crops. The total area devoted to the cultivation cf principal crops was expanded from an average of 5,933,747 acres in 1910-1914 to 9,259,902 in 1930-1931 cr 53 per cent, while the area In sugar cane Increased 78 per cent during the same period. (Tables 9 and 10, Fig. 3) Sugar occupied 6 per cent in 1910-1914, 7.53. per cent In 1925-19.29 and 7 per cent in 1950-1931 of the total acreage of the nine principal crops. The 'area In rice has constituted from 44 to 49 per cent of the total acreage devoted to the nine crops since 1900. The average was Increased from 2,185,258 in 1910-1914 to 4,413,500 in 1930-19.32. The acreage under coconuts was increased steadily from 9 to 15 per cent, the area in corn was slightly decreased from 15 to 15 per cent, while the acreage in abaca was de­ creased from 17.8 to 12.7 per cent of the total area during the same period. The ether principal crops hove used an insignif­ icant proportion cf the total acreage. The area planted to sugar cane was increased steadily as a result of the favorable -legislation cf the .-.merican Congress an3 the Insular Government, improvement in yield and the assured market in the United States. The area In rice has been increased to meet the demand cf a growing country although a small proportion has been exported 40 3d3d- r— rH #» to (0 ® -OP f Oi Eh cC m m cn 60 03! and Other Principal Crops »• * • © ,«— © to Vi © 3dcn rH * PH ^ •3 • fi o d n a + > -p © 03 ■p Js; -p f i to O TP 4-> o o in * 60 CO rH to Ok & in cn n «• cn a in in cn VO m o 3d«k IT \ 0J * rH » m cn m — rH 3d60 r-H cn a o •» VO n rH «* rH m r— rH in 60 a r f—I CT \ LT\ r— O o o a" in m o 60 in r VO VO 3d- cn cn rH — o vo in 03 d iH rH cncn rH rH i m en i—l rH cncn i—1 rH I O a cn rH mt in vo r— VO O * i—I 60 VO m S t #• rH — VD n rH «k |H rH LO. to » rH o VO 60 a a « cn a vo 8 a 3d" a cn rH iA c n a a cn cn rH rH fi 3 Pf © fi -tF o CT> rH rH CM CM cn cr> rH rH ip cn CM CM cn cn rH rH © S-i *0 O 0 0 * 1 © CsQ K >< p -P P 0 P 0 0 Ip P E-l O s, • 1 O tF rH P © P -P g S p g © o •0 g o P -P 0 P

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rH o cn IN CM 01 — ' -- . to «k — ■- o o O d ---- «k rH rH o 00 cn rH rH cn to CO to cd f—1 *Q i—1 o o E-t 'd d p d (0 cn 00 * cn CN to to cn 01 O r e '­ en rH •k CO CO +3 to xi © © p p E-t © © tO d © T j © 03 M *— -• M to CP O 1 M to to to M to to Ol 1 M to to ^ M to to O l M to M to M to M Ol 1 M M tD tO M M O 1 •* «• O IB O o © — TO 4 4 ct CD H3 ct a © H- P P P M cf © cf - P O 4 4> O © • «• W H 4 • to H* — M O 00 P OM Hcf < P P M P 4 a * © f* O Ol g P M P 1 p O Ol t-b 03 s; © tn «+ ej" Cj p © . 4 cf © M CO M W * cf id m P ® o P W © HO M M p H* 4 © *4 o 34) © pi H« a p « Q) M to to to 00 M -a to O M M -a •* ** V P © i> 4 o' © o o © © p cf •* •• M CP M -<3 M 00 to to CP M Ol M to Ol P o © o 4 O o © P © p P cf cf ID -_•• M . —* p 1-3 © o 4 O' © CD O o P o cf © •• •♦ p o • to M . o M • o M . O o . Ol © g TO o P © © 4 © p cf •• »• p CP Ol . O o to Ol £ CP © id 4 Ho o © © p cf ■__ *• o • o • to o * to o • to 9 o o * M o • M O • M M o • M O M •• p © o 4 O o C5 O © © p cf __•• •• .__ p © CD 4 O 1-b o i-b © © p © cf r*•^ •• o to O to CO M M p a o 4 O 4 © p © p cf in Sugar Cane Production in Relation Crops of the Philippines.(1) M 03«• id w © M P P to M O « M 4 M © cf - cf HO P p *-b • O d H 4 © O CP . -a to to Per Cent of the Value with Other Principal © M^ M p CO a p 4 00 © O 4 © P cf 12. & £ b %o it B * cf © © 4 © Table 4J _ Cf w f3 HH 1 (D H O 4 H1 rt H - y o M 4 h H HP «• O SB ® © B M M P< W to P W M h3 4 M (D 4 ® 0 © © © CD p. P © CD 4 O O id 4> p “ CD - M O fD O O cf § O H- 3 s o © W 3 4 H- CD © M - © © pfc Cd © © p f"b P P 1 4 O O 4 H 3 cf P M •to « M 4 5 years of the depression because of unusually high yields and heavy production, and because prices were protected by the tariff in the United states narhet as explained later. ;Ut>ar has be cone by far the most imoortant cash croo cf the Islands and constituted SI per cent of the value of all exports in 1931. Chapter IV PRODUCTION C7 SUC-,.". CATTE , Sugar Land Tenure System - In Cuba about 75 per cent of the cane is grown by small farmers or colonos v/ho produce the crop under contract with the central, and the remainder of the cane is produced under the administration of the centrals. is produced by the centrals. The Hawaiian and Javan cane In the Philippines the sugar cane is produced under the administration, tenancy, agency and small farm systems, the first two being by far the most Important. Adm in istra t ion System. Under this system, the owners of the centrals directly supervise all of the processes of pro­ duction such as the care of the land, harvesting and transporta­ tion of cane to the mills. The management employs the laborers and consequently no settlement is made with any agents or i/ntii laborersAafter harvest. The costs are usually separated between the plantations and the mills in order to determine the gain from each/"^ The centrals may own or lease the farm land w h i c h they o p e r a t e . ^ ) The centrals employ a technical staff, permanent labor­ ers and seasonal laborers. The technical staff consists of chemists, agronomists, engineers and farm superintendents who (1) Pratt, Edward Ewing, International Trade in Staple Commod­ ities, McGraw-Hill Book Company, New York, 1928, p. 288. (2) Ellsworth, John Orval, Thesis, Sugar Marketing, Cornell University, 1926, p. 44. 47 who are usually stationed at the centrals. Graduates of the Philippine University and other higher educational institu­ tions occupy many of these positions. their technical men to the haciendas^ The sugar centrals send which are associated with them through milling contracts to study the production problems and to give advice concerning production and harvest­ ing practices. Some haciendas which do not have contracts with the centrals obtain the services of the technical men either by direct hiring or through planters’ associations which own the centrals, or from the Bureau of Research of the Philippine Sugar Association. The permanent laborers employed by the sugar centrals include practical mechanics, shopmen, clerks, office help, etc. This group on the haciendas are primarily composed cf the sub­ tenants (naparceros" or "casara") who operate other land on shares. Some of these permanent laborers are also employed in the production of other crops during the slack seasons of plant­ ing, and harvesting sugar cane. The permanent laborers on some of the plantations also take care of dairy, poultry and working animals. The additional longer period during the enterprises keep the laborers busy a year. The seasonal laborers are recruited at the time cf harvest­ ing and planting. The sugar planters in Luzon Island obtain seasonal laborers from the province of Ilocos Sur, Ilocos Norte, (1) Haciendas are large estates. Some of these were formerly Rriars Lands belonging tc the Spanish religious corpora­ tions and some were owned by wealthy Spanish individuals during the Spanish regime. They were acquired by the Philippine Government in 1903 and offered" for sale to the public as previously discussed. 48 La Union, Pangasinan, Zambales and Bantangas. Fegros Island alone requires 20,000 seasonal laborers for approximately 130 working days for harvesting the average annual production of 2,500,000 tons of cane. These laborers are recruited from Cebu Island, Antique Province on Panay Island, and ether neigh­ boring islands. Sugar plantations on Hinderc Island obtain laborers from Capiz on Panay Island and from Panpanga on Luzon Island. The seasonal labor requirements for rice do not conflict with the peak demands for sugar cane production. consequently the Ilocano laborers who are employed in rice production move to Pampanga, Laguna, and other sugar provinces of the Islands during the planting and harvesting season. The administration system has been the best among the ones existing because it has obtained a higher degree of efficiency in the production and manufacture cf sugar. This system quickly applies any new Improvements in production methods. In general under the administration system there has been developed a satisfactory contract for both the laborers and the centrals and there has been provided a fair wage scale, sanitary lodging and cheap medical care for laborers. However there is considerable difference in the treatment of laborers and in the efficiency of the centrals. Tenancy or Casama System. The tenant operates under thetcRrts ofucash cr share lease with the owner of the sugar plantation. The amount of the share lease paid by the tenant generally ranges from 15 to 20 per cent cf the value of the sugar. (1) Pugh, Resources and Trade of the Philippine Islands, United States Dept, of Commerce, Bureau, of Foreign and Domestic commerce, Bui. Lc. 410, 1926, p. 6. 49 The lease is usually for a period of five years. If a sugar plantation is rented cn a share basis, the landcv;ner furnishes the land and the seeds while the tenant provides the working animals and implements. The landowner often advances money to provide the necessities for the tenant and for his family. This advance is later deducted from the tenant's share of the crop. The tenant prepares the land, plants the cane seeds and cultivates the growing cane plants. The landowner hires laborers to harvest the cane while the tenant provides only his own labor during harvest. The agreement usually permits the tenant to conduct ether small enterprises such as growing feed crops, vegetables and poultry. Some of the progressive central plantations are operated under a combination of the administration and tenant systems. The land is rented to the tenant who owns the working animals although they may borrow money from the sugar central in order to purchase them. If any additional funds ere advanced to the tenant the amount is based on the preliminary estimate of the tonnage to be harvested after the cans begins to develop. tenant is under the guidance of the central. The The cost of harvesting, loading on the cars and transportation are to be borne by the landowner which Is usually a central. The share received by the tenant depends cn the legal contract with the central. The weight of the cane reported by the central where the cane is milled Is the basis cf payment. Some plantations pay the t-' farm work on sugar cane. If the ter. standard fined by the contract he receives additional ccmpensa' tion. This "bonus" which is a real incentive h 50 increase the yield is an improvement in the tenant system.^^ The passage of the Philippine Senate Bill ho. 38S on Dec­ ember 7, 1933 has improved, the position of the tenants. The law requires the landlords to furnish the tenants with receipts, documents and other necessary -papers in connection with the quantity of cane which the landlords take to the centrals for milling. The advantage of the tenancy is that it provides labor, tenants and working animals for the sugar'plantations of the landowners who have limited financial means. Its chief limi­ tation is that many tenants do net want to make changes in the methods of preparing land, of selecting and preparing seeds of cane, of planting the seeds, cultivation, application of fertilizer and crop rotation. This is becau.se the tenants have been accustomed to less progressive methods for years. Agent Systecu Under this system the agent who recruits the necessary number of laborers frequently advances from §25 to §30 per worker for the transportation and subsistence cf the workers and their families. The agents’ remuneration is based on a straight wage or on a percentage of wages paid his workers. (S) Labor conditions are net usually satisfactory under the agent system. The agent often replaces superior workers with relatives or friends which tends to destroy the morale and reduce the supply of the laborers. The agent frequently knows (1) L. R. Onrubia, Labor on Luzon Island, Sugar Central and Planters News, Vol. 6, No. 1, Jan. 1925, pp. 20-25; Jose Generoso, Sugar Nev/s, Nanila, Vol. 15, No. 1, Jan. 1934, p . 52. (2) Handbook of the Philippine Sugar Industry, 1929, p. 15; Facts and Statistics about the Philippine Sugar Industry, 1923, pp. 50-51; Onrubia, L. R., Labor cn Luzon Island, Sugar Central and Planters News, Jan. 1925, Vol.5,No. 1 pp. 20-25. 51 tut little about the work. The growers have suffered annual losses which ranged from 15 to 20 per cent of the money ad­ vanced because the laborers failed to fulfill their agreements. According to President Rafael R. Alunan of the Philippine Sugar Association, the losses of planters in Negros alone for advances to laborers who did not complete their contracts is $100,000 annually. redress. The government provides no means for getting The labor problem in the Islands is not a shortage of available man power, but is one traceable to the lack of efficient supervision and a failure to understand the needs and disposition of the potential man power in different sections of the country. Small Farm System. The small sugar planters who own and operate their own farm^ produce a minor part of the sugar cane. They use labor existing In the communities. They do not usually make any contracts with the sugar centrals. The financing of of production is wholly dependent upon their own means, only a few of them getting financial aid from the Philippine national Ranks. They manufacture the cane in their farm mills into low muscovado sugar and panocha. Panocha is commonly sold locally. These small farmers sell the muscovado sugar to the small mer­ chants or to the centrals which convert it into higher grades. The small farm system is uneconomical In producing and manufacturing sugar. It has net provided a satisfactory wage scale, living conditions for ’workers, or income for the farmers. It has teen very slow in adopting the nevV improvements, (ihe low grade muscovado sugar is produced by the small farmers at their farm milTs.) 52 Cans Production in the Farm Program During the Spanish rule and the early period of the American occupation of the Islands the sugar planters and other farmers commonly produced only a single cash crop. Al­ though the Bureau of Agriculture, Bureau of Science and College of Agriculture of the Philippine University demonstra­ ted the value of diversified farming and crop rotation, it was not until recently that these practices were adopted by more than a very few of the sugar producers and small farmers. The government institutions have shown the value of diversified production In reducing risks of farming and the value of crop rotation in preserving soil fertility, eradication of weeds, keeping labor busy throughout the year, and in stabilizing the farm income. In the provinces of Batangas, Pampanga, and Rizal (Luzon Island) several of the sugar planters have diversified their production and rotated their crops in recent years. The cur­ tailment of production in the Islands due to the limitation of Philippine sugar to be exported to the United States under the import quota system of 1934 is tending to cause many sugar olanters in Luzon and the Vlsayan Islands to diversify their production. Coconuts, coffee, cotton, rice, cassava, mungo, soy beans, string beans and other quick growing crops are being planted. They are also establishing dairy and poultry enter- ori 3 es oru the plantations.^) (1) The plantations are also Sugar Lews, Lanila, Vol. 15, ITo. 3, bar. 1934. p. 169, 177; Ibid, Vol. 15, Vc. 3, Tar. 1234, p. 45, 53 attempting tc supply more cf the food for home consumption. The diversification of agriculture should tend to stabilize and raise the farm income, make it easier to pay the interest and principal of loans, provide steadier em­ ployment and higher wages for laborers and raise the standard of living in the agricultural districts. The increased output resulting from the fact that the farm people are kept busy for a longer period on the larger number of farm enterprises should also result in a greater demand for manufactured goods. Methods of Production Preparation of the Land. The sugar planters of the Philippines during the Spanish regime used the old-style wooden plow (cast iron point and shared and bamboo harrow in the preparation of the soil for planting^ There are still a few Fig. 5. Preparing land for planting. (carabas and wooden plow) plantations employing native wooden plows because cf their simplicity, cheapness and lightness in draft. The wooden and bamboo implements do not last long and are easily destroyed causing delay in farm operations. The wooden plows do not penetrate the soil deep enough for good production. They are 54 especially uneconomical for large scare production. They are still commonly used by small farmers. Under the American administration'modern equipment has been introduced to save time and labor, and to efficiently Cr^-6). prepare the soily\ The moulboard plows which are fitted with Fig. 6. Steam plowing engine drawing two disc plows. revolving coulters and the disc plows are used for the first plowing when tall grasses and bushes are growing. The disc plow and disc harrow7 are then used to pulverize the soil and level the land. The second or cross plowing which is done by cable plow, if available, is deeper in order to aid the sugar cane roots in penetrating the soil in search cf plant food and moisture. The soil is again pulverized. A small plow drawn by an animal or a small tractor serves for the third plowing and harrowing because the land is loose and level after the second plowing. When the land is ready for planting it is laid out in rows preliminary to receiving the seeds. (1) Asuncion, Sivestre The growing of Sugar Cane in the Phil­ ippines, Dept, of Agriculture and natural Resources, Bureau cf Agriculture, Manila, Cir. ho. 1S7, 1925, pp. 1-2; Hines, Cleve W., Cane Production and Sugar Manufacture in the Philippine Islands, Bureau of Agriculture,- Bui. 33, 1919, pp. 78-79. Animal power Is used to produce a greater proportion of sugar cane because of the cheapness of labor. Many of the tenants and landowners could net afford to purchase the ex­ pensive tractorsf The large plantations and sugar centrals use tractors. Preparatiori of the Seeds. The white tops cf the cane from 20 to 25 centimeters long are generally used for seeds. These points are usually cut off while the canes are still standing in the fields, although the tops may be removed after the cane Is cut. Strong and vigorous buds are selected in order tc Insure good germination. Healthy seeds are more resistant to the attack cf diseases and Insect pests. The women and children who dc most of the wcrl: in the preparation of cane seeds work under contract at so much per 10,000 tops ("lacsa"). The leaf sheaths on the tops which have been cut by the laborers at harvesting are removed by hand and the points are tied into bundles cf convenient size. The points (puntas) are loaded into carabac carts, wagons or rail cars and taken tc streams or tanks to soak for 1 to 3 day before planting In order to promote rapid development of the buds. This Insured growth In the unirrigated field and allows the seeds- tc get a start cn the weeds. The points are taken r- idiy to the field prepared for planting to prevent them from drying cut. irrigated. The points are net soaked if the plantation is The planting season is from December tc _-pril.(-) (1) 'Talker, Herbert S., The lugar industry in the Island c: T'egrcs, Handbook cn the Tugar Industry of the Philippi: Islands, 1912, p. 85. Method.; cf Planttng Sugar Cane. The wooden plows which are used for making furrows are run either once cr twice in the sane furrow. The most common method cf planting is to place thecane tops In . ' d i n g -v ,f_; aslanting,position • -h ; in afurrow imeters apart and one meter between therows.(Fig. 10,000 - T-_w l u m I ■ 7) hearly i M-f W . Mi-,;.;. . ■ k 40 cent- l-3~. ' :. ih-k:i-fdh hu'-h b ftw:uv.. jpBwHpP^PW RBl a , .-a- . £ *. fi m ■ 'isL-i*.?* -fom n ■ ■ ..'i'W-V Ah-•-V.h-u JN* %5 ■m ■-4' :'.-r h j h .V"i I,"’''---' Fig. 7. Planting Cane in the Rows seeds are planted p<=r acre. The points which are packed with loose soil extend a few centimeters above the surface. The square method of planting cane where two points are set together is alsc used. This system requires approximately 8,000 cane points tc the acre. The growth cf weeds can be prevented by cross plowing without danger cf injuring the young plants, while planting in rows permits subsequent plowing in only one direction. However the square method permits fewer canes which requires greater expense for plowing because- there is more space tc be kept free from weeds, and a- longer time must elapse before the shade cf the cane retards the growth cf weeds. Culoivation cf Sugar (Jane. ’hooden plows are more often employed in the cultivation of sugar cane on small farms "hiIt disc Implements and five tooth cultivators are commonly used cn large plantations. Then the young sugar cane plants are 57 :v "%' 30 to 40 centimeters high, four or five weeks after planting, the first plowing is done. Fig. 8. between the rows. It consists of running furrows Flowing between the rows, One or two weeks later the plow is run close along the 'Cans in each row and the dirt is thrown away from the cane and towards the middle of the row. ercised not to disturb the large brace roots. Care is ex­ The third operation is to clear the plants of weeds by means cf hoes. Another immediate cultuvation covers most of the small weeds which remain. These operations are repeated until the cane slants reach the size where there is danger cf breaking them down by animals when they pass between the rows. In the last cultivation as much earth as possible is thrown up around the canes to strengthen and to enable them to resist storms better than they could under flat cultivation method. The furrow between the rows serves as a drainage ditch tc remove the excess of water that might injure plant growth. Application of Fertilizer. Some sugar producers believe In three applications of fertilizers. The first is applied at the time of planting, the second is made when the plants are one half of a meter in height, and the third just previous to 58 the rainy season. The fertilizers .are'mixed well with the earth through cultivation before irrigation water is applied in order to prevent them from being washed away.^^ The quantity and kinds of fertilizer vary on the.jolantat ions depending on the nature of the soil fertility. Nitrogen, phosphorous and potassium are the three elements commonly applied. There has been a great need for the use of fertil­ izer on the sugar plantations because many of the producers same grow cane on the^land year after year. This system of pro4 duction has resulted in the exhaustion of some important ele­ ments of the soil necessary for plant growth. A proper crop rotation would tend to preserve the soil fertility. Cultivation of the Ratoon. In Negros Island and other -fertile sugar producing sections, the sugar fields are allowed to ratoon from two to four crops. This is especially true in the rich soils of Ilog-Cabancalan, Binalbagan-Isabela, San Carlos and Bais. Ratocning is also practiced in areas which are overflowed by mountain streams since the silt which is I 2) deposited, serves as fertilizer.' 7 The trash and leaves are burned after harvesting to facilitate cultivation. Tater is immediately supplied where irrigation is practiced, to hasten sprouting. The plow Is run close to the plant to loosen the dirt and to cut the old roots in order to stimulate its growth. Ratooning saves time and reduces the labor and other (1) Silvestre Asuncion, Ibid., pp. 1-2 (2)Ratoon is a term applied tc the second or latter year’s growth from the original plantings. Silvestre.Asuncion Ibid., pp. 1-2; Herbert S. "hiker, Ibid, pp. 85-85. 59 coats but the yield is always less than that of the planted cane. Harvesting. -During the Spanish domination of the Is­ lands, the sugar producers did not possess the scientific method of analyzing cane juice to determine its maximum sucrose and minimum glucose contents in order to know the proper time of harvesting the cane. They harvested the cane whenever they thought it was ready and when labor was available. Labor was one of the most limiting factors during early per­ iods. Under the American administration the sugar centrals -to have their chemistsAmake tests of the sugar contents of the juice In order to determine the right time to harvest the canes. The nbolo,!, a knife from 40 to 50 centimeters in length with a blade from 8 to 12 centimeters at its broadest point and with a hook at the top, is used for stripping and cutting the cane. Each laborer is assigned a row of cane from which / the leaves are removed and the stalks are cut. The points which are for seeds are thrown in one pile and the cane stalks which are for milling in another. During the early times the canes were left for so many hours or da2/s exposed to heat and moisture that rapid deterioration of the sucrose contents of the canes resulted. In recent years efficient transportation facilities convey the cut cane as soon as possible to the sugar central. An experiment conducted in Pampanga Province, Luzon Island using the Pampanga Red variety in 1923 showed that the deterioration of topped cane after it had stood for four days before cutting and milling was 93 pounds of sugar per ton of 60 cane. The cut cane which was allowed to lie in the sun in an open field deteriorated more than that in the shade of "bamboo and grass. ^^ Transportation of Cane to Mills. The "paragos", a sled made cf wood and bamboo frames without wheels and pulled by CFi&- *£• caraoao was commonly used during the Spanish time* The prim- Fig. 9. Crude and inefficient method of transportating sugar cane. i itive two-wheeled carabao cart, the light four wheeled wagons having a capacity of about two tons of canes and drawn by two animals, and the portable tramways were also used for trans­ portation of canes from the fields to the sugar mill s . ( %) Under the American administration some of the old methods of transporting canes are used by the smaller plantations. The sugar centrals have employed more efficient methods of trans­ portation of canes by the tramways and railroads to reduce the (1) Experiment was conducted under the direction of the In­ vestigation Staff of the Bureau of Science, Philippine s u g a r Centrals Agency, San Carlos Milling Co., North Negros Sugar Co., Victorias Milling Co., and Hawaiian-Philippine Cot The International Sugar Journal, Vol. 25, No. 292, April 1923, pp. 212-213. (2) Talker,'Herbert S., The Sugar Industry in the Island of Negros, Handbook on the Sugar Industry of the Philippine Islands, 1912, pp. 91-92. 63deterioration.in the sucrose contents. The loading and un­ loading is done by hand. Coat of Production and Yield Cost of Production« The average cost of producing sugar cane in the Philippines on seven haciendas in 1924-25 was §89.28 per acre while in 1930-32 the cost wa* 450.46 per acre on 30 centrals (tables 13 and 14). The differences in the cost in the two studies was due tc the selection of cases studied, the items included and the price level which was high­ er in 1924-25 than in 1930-32.^ Labor was by far the largest cost item, constituting the major proportion cf several of the important expenses such as cultivation and harvesting. The costs of preparing and cultivating the land amounted to §17.80 per acre in the 19241925 studies and to §12.78 in the 1930-32 studies. costs were only slightly less in each study. Harvesting Fertilizer cost was §14.30 oer acre on the seven haciendas but only 80 cents on (1) It was impossible to draw definite conclusions or to make comparisons between many cost items because of inadequate explanations and of differences in classification of the items included. The cost of cultivation in the 1930-32 study probably included the same items as the cost of pre­ paringl_l land, planting, and cultivation in the 1924-25 study. rtha costs nf a O'n a n i a hr a.t 5 on a n d of e n r p r, i a t i n r> of of administration and of ddepreciation of bnitrlbuild and equipment were net included in the study of the 30 centrals. Rent cn the haciendas and miscellaneous rentals reported in 1924-25 probably should be combined. Interest may refer to cash payments only or tc interest cn the entire investments in 1924-25. If bad debts were due to advances to labor this item should be a labor cost” and If due to a less on the sale cf sugar It should be deducted from the price of sugar. The cost cf seed was not reported. Taxes were not reported for the seven haciendas and the items included in development cost for the 30 centrals were not ex plained. In general the study conducted by the U. 3. Tariff Commission cn co3t of the Philippine sugar production is mcr satisfactory than the other report because it is a larger samnle and is a longer and 'more recent period. — J * X . 63 (Table 13. Cost of Producing Cane per Acre, 1924-25.^ Items Average cost per acre (dollars) Land preparation, planting, cultivation Harvesting Administration Supervision Repair of building and equipment Care of animals Total labor cost 17.80 17.40 8.10 5.20 2.00 2.10 52.60 Fertilizer Rent of hacienda Planters association miscellaneous rental Interest Depreciation of animals Depreciation of buildings Bad debts Total 14.30 2.80 1.70 1.70 5.07 4.77 5.21 .50 35.24 Total production cost Cost per pound 88.34 .01424 (1) Carlos Locsin, Graph for Bstimating Costs, Pacts and Statistics about the Philippine Sugar Industry, Sugar ITe'.vs Press, Manilla, 1923, (Table A. 63 | i \ lable 14. Cost items Cost of Producing Cans per Acre, 1930-52. i Cost per acre : 1930-31 dollars) : Cultivation Irrigation Harvesting Supervision Taxes Fertilizer Development Qther Imputed interest at 6 per cent Total cost Cost per pound : Cost per acre : 1931-32 (dollars) : : Average cost per acre : 1930-52 : (dollars) 12.71 10.98 11.86 5.63 .10 .80 1.75 7.59 12.85 11.71 14.69 6.08 .10 .81 2.25 6.85 12.78 11.345 13.275 5.855 .10 .805 2.00 7.22 5.94 57 .36 6.22 61.56 6.08 59.465 1.46 cents 1.18 cents 1.32 cents (1) U. S. Tariff Commission, Heport to the President on Sugar, Ho. 75, Second Series, 1934, p. 126-127. 64 the 30 centrals. Irrigation water cost $11.35 per acre on the centrals but was not used on the haciendas. These two items tend to offset each other since the fertilizer included in the irrigation water probably served the same purpose as the fertilizers applied on the unirrigated land. Adminis­ tration expenses were not pro-rated to the land by the centrals but amounted to $8.10 per acre on.the haciendas. The cost of supervision was over $5 per acre in each study. The other cost items were of minor importance. The low cost of the planter’s association used by the haciendas was many time3 compensated by the benefits the sugar planters received from the association such as improving the methods of production and marketing sugar. The average cost cf producing sugar on a pound basis was $1.42 cents in 1924-25 and 1.32 cents in 1930-32. The greater the output of sugar per acre the lower was the cost of pro­ duction a pound. Of the seven haciendas the one which pro­ duced the greatest yield of 8,120 pounds per acre in 1924-25 had the lowest cost per pound or 1.11 cents (table 15). The hacienda which had the lowest yield of 4,872 pounds' had near to the highest cost a pound or 1.51 cents. In 1930-31 the output of the 30 centrals averaged 3,875 pounds per acre and cost 1.45 cents per pound while the higher yield cf 5,156 pounds In 1931-32 cost only 1.18 cents a pound. Yield of Pane Sugar. The yield per acre cf Philippine srrar increased steadily from an average of 1,385 pounds in 1912 to 3,704 in 1932 or from an average of 1,574 pounds in 1910-14 to 3,001 in 1929-32 (Fig. 10). The Increase In the yield Indicates that the expansion has not taken place on 3tiOV H3d SQNOOd F I G S U G A R YI ELD 66 poorer land. The increase in yield which has probably■ been associated with a lower cost of production has been due t o the application of scientific methods of production and manuf a ctur ing sugar, the development of the sugar centrals which have re­ covered a higher percentage of the sucrose con tent and to the use of higher yielding cane varieties* 6S Table 15. Yield and Cost of Production of Sugar per Ibund on Seven Haciendas, 1924-25 ^ « • Hacienda Sugar per acre : • • : Cost per pound (cents) A C B D F E G 8,120 6,821 6,166 6,037 5,794 5,710 4,872 1.11 1.31 1.53 1.42 1.59 1.47 1.51 Average 6,203 1.42 Average yield per acre = 3.1 short tons (1) Carlos Locsin, Graph for Estimating Costs, Facts and Statistics about the Philippine Sugar Industry, 1928, Table A. 65a Table 16, Cane Sugar Production of the Philippines. (1) Tear 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 (1) : : : Area cultivated (acres) 205,508 297,293 405,889 435,188 418,676 427,710 444,189 459,436 507,818 494,692 487,783 596,364 595,066 561,634 561,386 591,730 572,877 586,492 585,627 640,063 633,021 640,450 632,775 : : : Total sugar produced (short tons) 168,254 268,878 281,355 345,077 408,339 421,191 412,274 425,266 474,744 453,346 466,913 589,437 533,188 481,273 523,142 746,504 607,358 766,896 807,808 829,905, 866,515 956,033 1,171,860 : : : Production of sugar (pounds) 1,637 1,809 1,386 1,586 1,951 1,970 1,856 1,851 1,870 1,833 1,914 1,977 1,792 1,714 1,864 2,523 2,120 2,619 2,759 2,580 2,720 2,999 3,704 Concerning Sugar, Sept. 1925,pJ.-2, May 30, 1930, pp. 1-5; Alunan, Rafael R., Annual Report of Philippine Dept, of Agriculture and Natural Resources, Manila, 1933, p. 142. CHAPTER V SUGAR CENTRALS IN THE PHILIPPINES Modernization of Sugar Killing. As noted in Chapter 1, sugar plantations during the Spanish regime milled their own cane. The equipment long in general use took the primitive form of crude wooden or stone rollers'turned hy a long sweep moved by animal (usually carabao) power. Fig. 11. (Fig. 11) Later, Crude wooden sugar mill, small steam engines were used and prior to American occupation a few larger mills equipped with vacuum pans were installed in the Islands of Luzon and Negros. In 1905 the number of steam driven mills was 528 while those operated by animal power numbered 470 (table 17). Although the steam mills had increased to 1,277 by 1918, there was an even larger total of the y u d e r type of mills "which had arisen on a rapidly grow­ ing number,of small native plantations. In terms of value of production, however, the output of the former in 1918 was more than 25 times greater than that of the mills depending on animal power. The mills had not increased materially either 6 3 in number or in value of production (table 17). Table 17._ Types of Sugar Mills in Operation, 1903-18. • • • • Kind of power : Year : • Number of • establishments :Value of production . Animal Animal 1903 1918 470 1,294 Hydraulic Hydraulic 1903 1918 77 89 304,689 352,857 Steam St earn 1903 1918 528 1,277 2,425,022 39,179,209 (1) $ 571,793 1,522,685 Census of the Philippine Islands, Manila, Vol. 4, Part 1^ 1913, pp. 231-232. During the Spanish rule in the Islands, transportation facilities were Inadequate and slow. JLLILC0 0CC Considerable loss of red in the hauling of cane from plantation to sugar mill by the crude carabao drawn carts over unimproved roads. In the crushing of the cane In the crude type of animal power and tone or wooden mill only a small portion of the sucrose content was recovered, the major part remaining in the lightly pressed bagasse. After crushing, the juice was strained and boiled in open kettles. Fig. 12. Old method of boiling juice (open kettles) A further portion of sugar was wasted in this method due to 69 over boiling or spilling through careless handling. T G juice -l J. was boiled to a thick syrup and poured into moulds to dry and harden.( ) Several grades of crude sugar were made such as pilon, (2 ) mat and panochas. (3) There were three processes involved in manufacturing sugar. First, the ’’pilon" as a block of hardened sugar was taken from the mould. The white sugar that had formed on the top was separated from the lower portion which was heavy and wet. The latter was then taken to a wooden shed where it was again put into moulds4 Second, the pilones were set on earthenware jars into which the molasses dripped through the hole in the bottom of the pilon. On top of the pilones was (p -i i *•) placed a layer of mud for about twelve days. The purpose of Y W'" ' ' t. : Fig. 13. Mud on top of pilon to aid in purify ins sugar. (1) Handbook of the Philippine Sugar Industry, 1929, p. 2 ; Cleve ",r. Hines, The Sugar Industry of the Philippines, Fconomic Resources and Development of the Philippine Islands, 1920, pp. 49-55. (2) Mat sugar or baycnes is a type of open-kettle muscovado sugar 70 these proc ess es wa3 to puri fy the sugar as m u c h as possible. The sugar in some cases was boiled in large, open, cast-iron kettles. Third, the final part of the process consisted of spreading out the sugar and exposing it to the sun several times until it was completely dry. It was packed in bayones and stored in the sheds ready to be exported. The resulting sugar was a dark brown product containing considerable impu­ rities and as.auch was incapable of competing with the high grade centrifugal sugar in Occidental markets. Under the American administration the introduction after 1910 of modern centrals which grind the cane for surrounding planters and convert the juice by mechanical and chemical pro­ cesses into high grade centrifugal raw sugar, has revolutionized the industry in the Islands. This system not only permits the handling of vastly greater quantities at a given point, with great economies in time and labor, but also makes possible a much larger recovery of sucrose content and the turning out of a high grade and uniform product. The employment of better transportation facilities such as tramways or railways and more rapid handling of cane from the plantations to the sugar mills have aided materially in reducing the loss of the sucrose content under the old system. On arriving at the central the cane is passed through two heavy crushers and then through a series of from nine to eighteen 'rollers, subject to 400 or 500 tens hydraulic pressure. These rollers are arranged in sets of three, with jets of water play­ ing on the crushed cane to facilitate extraction. Under this process most of the loss of sucrose content which accompanied grinding In the older type of mill is eliminated. After 71 successive processes of evaporation and chemical clarification the crystallized mass is run through centrifugal machines. The centrifugal machine consists of a circular basket which is lintwith a circular sieve. By revolving the basket at a rapid hate, the molasses is thrown off and the sugar crystals remain in the inside the sieve. Since the introduction of. the modern centrifugal sugar central there has been a more rapid expansion of production of higher grade sugar than that of the muscovado sugar. In 1922-23 iho production of the former (247,653 short tons) was only uiightly In excess of that of muscovado (231,284 tons). By 1931-32 the production of centrifugal had risen to 983,699 tons, while that of muscovado had fallen to 46,332 tons. In other words the proportion of centrifugal production increased within bho period from 52 per cent to 95.5 per cent of the combined out­ put of the two classes. Most modern centrals employ an experience superintendent, un assistant superintendent, a .chief chemist, three to four ,lcsiatant chemists and a production specialist-whose services 'wcpq not used in the old method of producing and manufacturing ■'"'gar. Practical mechanics and shop men are also employed by hho central. During the milling season there were usually day 'uvl. night shifts, each of which required from 50 to 75 laborers. •'■■u'iUt 50 laborers are needed in a mill with a daily capacity of h'ju tons.(^) (U The greater division of labor under technical surer Handbook of the Philippine Sugar Industry, 1929, p. 15; U. S. Commerce Reports, Ro. 249, 1919, p. 249. 72 vision in large scare production makes possible both lower labor cost per unit of output and the manufacture of a superior and uniform product. Relation between Planters and Central:. The early independent sugar centrals owned or leased land for cane pro­ duction and also obtained cane on a contract basis from cane producers. Since the capital required to construct and operate a modern centrifugal plant was beyond the resources of the in­ dividual planters, they organized planers’ associations in order to establish the central or bargain with them. These associations have been effective in obtaining more favorable and uniform milling contracts between their members and the sugar centrals. years. The contracts -are usually drawn for a period of §0 Each sugar central handles the cane of from 50 to 500 growers operating from to 750 acres of land. The sugar pro­ ducers obligate themselves to load their cane on special cars supplied and operated on the railways by the centrals. The planters also agreed to give the right of way for the railways over their property during the term of the milling contract. The centrals contract to mill the cane of the planters for which ser­ vice thev received from 40 to 50 per cent of the sugar produced, (1) the planters obtaining the balance. It has been largely through the development during the past two decades under government encouragement and assistance of efficiently managed centrals that the Philippine Islands have become an Increasingly important competitor in the export of high grade sugar to the American market. (1) Handbook of the Fhiliopine Sugar Industry, 1S29, no. 15-17. Io Insular Distribution cf Sugar Centrals Growth and Localization cf Centrals. nft:r the erection of the first sugar central on Lindora Island in 1910, ties num­ ber of centrals increased rapidly sc that by 1921 there were 25 in operation. (ta~le IS) The increased protection given to the continental and insular producers under the Fordney-hcCumTable IS. Localization of Centrals and C u t o u t ^ ) _ rg21 __ f_r9'32-’ 3o TT^5^3o~ :Humber :P er cent:Humber :Pereent:Outout :Percent :Cut out Island: of : of : of : of rmetric : of : per :Central s.Total :Centrals Total :ton :output :Central Luzon Legros Panay Cthers Total 7 17 1 1 23 27.0 65.0 4.0 4.0 I'QQ.O' 15 19 S 4 45 35.6 374,654 42.2 643,710 13.3 64,319 8.9 45,863 TOO. 1173,545 33.2 57.0 5.7 4.1 lOO.L) 23,415 33,373 10,720 11,466 25,079 .■ O3+-J‘T.>w , 1929, Table R.-R. Altman, Lou, The Past, Present and Fi J 'w of the 1 Sup.' _Lc <✓ O Phil. Sugar Ind., Vol. 13, ho. 49, G< 4-U ft ni o t ■ P 4- > ,~ and Bj G. G. Gordon, A Brief Re visa/ t-L O—« Phil. Sugar Ind., 19 31. j \s - y y y her Tariff Act cf 1922^^ led to a rapid expansion cf cane acre­ age in the Philippines and to the addition of 13 new centrals during the years of 1922 and 192S. Zrpansic-r. v/ss further ac­ celerated by the still greater protection enjoyed by the Philip­ pine producers after the passage of the Suocb-Lanley Tariff _-.ct “T ~ 1 O J _ 'u ’w W ", ft \ *— ) b o m O ""m n U j.Iu U V -- (w «/ 1 C i. t a , 1 w -J ^ s. ~ t •• ,o n c v~ i~ "•*> a. ”1 oj -n u v — O a v~ r p r\ n ___ __ v ^ 1o f - t - a Production of sugar in the Archipelago has expanded preatlsj ing the period from 19 22 through 1933. vs _ u "i ' u • r>.. In 1922 only 373,73$ (1) The For dr.ey-Lc Cumber Tariff _:Ct cf 1922 fined the duty on Cuban 96° centrifugal sugar at 1.7543 cents per pound and fc] foreign sugar at 2.205 cents per pound. (2) Sncot-Lauley .iCt cf 1230 the duty on Cuban sugar v;as raised r\ < / *w - o f* O " " g J. J. V *n c „*s „ -hi , _ >W ’Ci" — ^ V- * —r " t > "h “ r • ^ o "f* P — ■k ^ c U s ~ r u * r? ? i ^ u ~ o -J w - -A ■... X f* m V U C • — <_, p .u , * ^ -V ~~ ffl •H o o 1 and ai 02 02 ffl £ o H > i — I ia . I, CO 1929. Cl ffl LO O LO CO . Industry, £ 02 £ . Philippine 02 . H LO r H CO CO CO O O 01 O O 0 o o 01 ^ o H 0 0 D - CO CO . . . . I ill)I—f-p CD CO -P £ 0) £ffl Pi ffl 02 ffl 01 02 CO 02 CO i —I i—I CO T3 £ CO CO CO CO CD CO § •H i—I rH cd O P P o i £ Sfl •H f Pi •H Pi O O E-t •H £ £ £ S H £ ffl ffl H p, g o fxi CO «£ o H £ si S s •H co ffl o Pi •H •H H •H £ £ H £ ffl •H Pi a fx, m < o rH O £ si 02 o C4 ■H E -i •H £ rH c tf . •H CO < £ O PJ § 20. Insular Distribution of Investments in Centrals by Nationality. 1928 § £ O C- O ^ O 02 O 00 L Q c— O) i —I a cc p, a o co «tj o (1) H £ g ffl £ P O O d __ Eh m p P o p w © P © P •• ff l 0 © O .. —■ ra P © (—t rH O d —' O 02 * ffl CO •• to ff l CO H 00 CD . • • • • . 02 d 1 CO ffl CO CO oo ' d< cn ffl d< CO CO in 02 CO rH rH 02 ffl CO ffl CO o cn «k m A Ok cn CO CO to 02 cn ffl cO o CO tN o to d« d< O cn *k 0k «« Ok H 02 CO o CO CO rH rH p © © 0 ffl iH -p © o S> • • •+ . . • • » . . . ©» ff l ffl •p • . P fl © © cn cn P c •• • * o CO cn ^ © CO CO ra o 02 cn a o\ © P ffl co ff l © © CN d< o 0 rH o ffl E-t rH <—1 Ok © O > p © P •• d © © P S © ffl >5 © d © ttC 0 cd rH *3 © > Table 21. Comparison of the Principal Exports of the Philippines. (1) •• •• .. ffl to to O cn cn P © P P © d CQ P © © >H -P © © o •• -— © p © 1—I rH O d ---- CO 02 O * d* 02 rH ffl H CO O'rH ffl A •» o» CN cn 02 rH d< d< H d< in d * d * CO O ok •» Ok Ok «• Ok to to C - cn co to d< cn rH d 1 O rH rH rH LO rH CO ff l -d 02 o rH cn to o CO IN Ok «* Ok 02 02 O CO cn ff l IN o rH d< CO IN A «k •k cn iH CO CO H CO o d< o o . • • • . • rH d< CO CO 02 to 02 02 02 02 CO 02 O d 1 CO o rH CO O o 02 d< co d m A Ok •k to to ffl to cn ffl cn 02 IN to CO CO Ok •% A d< 02 IN ffl 02 to d 02 ffl © © o o d 1 O o o rH » « . . • . o rH o IN to cn ffl d< d * 02 02 ,_. © p © rH 1—1 o d -_. to d< CO 02 CO ffl •fc Ok cn ffl rH 02 cn tO 11 © © o -■—k ra P © © 0 H i—1 rH © o > d m 02 o c - 02 CO o - o 03 02 rH CO c m A «h Ok o to 02 cn ffl cn o IN to d 1 02 to Ok Ok Ok «% cO cn CO IN o i—1 rH to 02 to 1—1 O ffl o O 02 CO . • * • . • £N cn CO o O 02 rH rH rH to CO ffl ■d* CO ffl 02 CN IN CO IN d< ffl CO CO ffl ffl ffl H CO •» Ok •k Ok Ok ffl CO IN H ffl sfl ffl CO to 02 CO CO CO 02 CO d< IN CO «k •h n Ok Ok A ffl cn d* ffl ffl CO fl rH CO d< f < 0 cn d< cn d o rH rH 02 1 1 1 1 fl O CO o f o 1—I rH 02 cn cn cn cn rH rH rH i—l cn 02 1 ffl 02 cn i—l CO CO 1 Cn rH m P 4> m p H © to & P 1 ■P © o t*D CO 0 o tn . p +> © p p © o •H H Ok p P CO © P rH 03 •rt cn rH rH rH © ,© P • rH s © to • H ■p O Ok • m ■p P © S 0 Ok •rl o o •P -p ffl 02 © © © CO rH 0 cn r—f o to rH o © P)

rH © © 0 tH • e> © P © © o 4s p P S n © CQ •H CQ p rH © -P iH fa «v © A 0 Ph •»vrH ta to © • « <7> © M o 1 © d< CO ■d i— 1 00 © 1 P © cO • © 02 P4 © —1 © i o © • © P © P CO P o d H cn i — i •« cn ©* © rH i —i ffl •p Eh •fc © 02 © A © S & Q P » 0 O •• ffl K m •n S © © o rH © •H p H P to p © 0 0) P H o iH •H i —i ,P rH 0

000,000 dollars in 1929 to 15,000,000 dollars in 1932 due to the curtailment, of demand for this commodity in the United States and other countries. Proportion of C-rind Exported. The proportion of grind entering the Philippine export trade was very irregular es­ pecially during the early period c-f the .-jnerican administration in the Islands. The market in the United Gtates for Philippine sugar was net yet stable and higher grades of suger were not produced in great quantities until after the passage of the tariff acts in 1922 and 1930. The rapid expansion in the,amount of grind exported was caused, first, by the increased production of 96° centrifugal and refined sugar demanded in the American market; second, by the greater protection furnished when the tariff duty on Cuban sugar was Increased; and third, by the favorable adjustment made on transportation rates.from the Philippines tc the United states. The average yearly production of grind in the Philippines amounted to 257,060 metric tons for the period 1310-14. (1) By Philippine Islands, Bureau of Customs, Annual Report of the Insular collector of customs, lianila, 1933 p. 25. 89 1930-32 the amount of grind nroduced had increased to an (Table 22aJ average amount of 907,480 metric tens/ On a per centage basis the production of grind increased 540 per cent during the period studied. Exports of grind also increased great­ ly during these years. In fact on a per centage basis the increase -in exports cf grind was greater (415 per cent) than the"per centage increase in total grind produced. The'most rapid Increase in the production of grind as well as in the amount of grind exported took place following the World War (table 22). Classes of Sugar Exported and Destinations. The three forms of sugar exported from the Philippines are the muscovado, centrifugal and refined sugars. The raw mus­ covado sugar was the principal form exported during the earl­ ier years. Since 1921 the higher grade sugars have been the most important due to the introduction cf scientific methods of manufacturing in the Archipelago and the great demand, of the American market for the 96° centrifugal and. refined sugars. During the mineteenth and the beginning cf the twentieth century Philippine sugar was exported mainly to Great Britain, > the United States, China and Japan, while in recent years the United States has been the principal market because cf the existence of free trade relationships. muscovado. Over 94,000 short tons cf muscovado sugar, (the only sugar produced in the early days,) was exported in 1 8 9 9 . The export of this grade of sugar was increased to averare of 309,351 short tons in 1900-09 representing ever 99 (1) Phil. Islands, Bu. cf Customs, annual mepcrt cf the in­ sular Collector cf Customs, Uanila, 1S33, p. 89. Table 22a Proportion of^Grind Entering Export T r a d e . ^ v Philippine ___ • • Production : Exports Year: (metric tons): (metric tons) :per cent 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 Cl) (2) (3) 152,639 243,925 255,243 313,051 370,443 382,103 374,013 385,799 430,686 411,273 423,580 534,734 483,706 431,365 479,988 707,167 550,995 695,729 732,844 754,546(2) 788,181 869,121 1,065,138(3) 121,472 209,044 197,076 157,334 236,498 211,013 337,490 205,908 273,258 136,060 180,341 289,876 362,072 271,983 357,830 546,832 411,232 553,324 569,938 695,868 743,980 776,210 778,338 80.1 85.7 77.3 50.3 63.8 55.2 90.2 53.3 63.4 33.1 42.4 54.2 74.9 63.1 74.3 77.3 74.6 79.5 77.8 92.2 94.39 89.2 73.0 : Retained within the country i (metric tons) :per cent 31,167 34,881 58,167 155,717 133,945 171,090 36,523 179,890 157,428 275,213 243,239 244,858 121,634 159,382 122,158 160,335 139,763' 142,405 162,906 58,678 44,201 92,911 286,800 19.9 14.3 22.7 49.7 36.2 44.8 9.8 46.7 36.6 66.9 57.6 45.8 25.1 36.9 25.7 22.7 25.4 20.5 22.2 7.8 5.6 10.8 27.0 Philinpine Bureau of Commerce and Industry, Statistical Bulletin No. 3, 1921, p. 244; Ibid., Statistical Bulletin No. 7, 1924, p. 113; Ibid,, Statistical Bulletin No. 12, 1929, p. 188 • United States Tariff Commission Report on Sugar, 1933, p. 8. Alunan, Rafael.R., Annual Re-port of the Dept, of Agriculture and Natural Resources, Manila, 1933, p. 142. 87 Table 22. Average Proportion of Grind entering Bxnort Trade. • • Year : Production Index Bo. * » : Amount 3xp orted: Index No.: of Grind : retained 1910-14 237,060 100 134,285 100 82,775 1915-19 393,770 149 232,745 125 164,024 1920-24 470,644 176 292,420 159 178,224 1925-29 679,256 '254 555,439 300 123,817 1930-52 907,430 340 763,176 415 141,304 (1) PhiliDioine Bur ear. of Commerce and Industry, Manila, Sta. Bulletin Ko. 3, 1921, p. 244. Ibid, Sta. Bulletin !7o. 7, 1924, p. 113. Ibid, Sta. Bulletin Bo. 12, 1929, p. 1SS. United States Tariff Commission, Report to the President on Sugar, 19 35, p. 8. P.. R. Airman, Annual Report of the Department of Agri­ culture and Rational Resources, Manila, 1933, p. 142. so per cent cf the total sugar exported (table 23). China’s import cf this grade of sugar (including Hongkong) of 155,138 short tons constituted 53 per cent cf the total ex­ port during the same period. About two-thirds of this amount was shipped to the British port, Hongkong. The United States imported only 55,730 tens or. 19 per cent of the total during 1900-09. The exports averaged 254,739 tons in 1910-17, prac­ tically all of which was muscovado. During 1910-17, the United States, which was the leading market for muscovado sugar, im­ ported 133,253 short tens or 52 per cent of the total. Some muscovado sugar was imported by the United States during these periods because of the low price. This grade could be sold to the orientals In the United States who consumed this type of sugar. In 1918, the first year when the centrifugal sugar was grouped separately In the reports, the muscovado sugar constituted about 75 per cent of the total exports. In 1918-31 China again became the principal market for muscovado sugar, nfter 1921 the export of muscovado sugar declined tc an average of 17,978 short tons or to 2.1 per cent of the total sugar exports in 1928-32, due primarily to concentration in the pro­ duction of the higher grade sugars demanded In the United States. The United Kingdom has Imported a relatively small amount cf muscovado sugar ranging from 6 tc 9 per cent during the Amer­ ican administration. Centrifugal. After the establishment cf the first sugar central in 1910, the production of centrifugal sugar steadily Increased until the experts amounted to 70,557 short tens or to 23 per cent of the total sugar exported ~n 1918. In 1921 centrifugal sugar became a more 'mpcrtant export than the 91 +3 d d © © Pi o CM +5 — Os d o i rH 2 R XI o 0 1 +3 o 1 —1 CN rH CM I Io . C M CM CM o I I III in co to tO CM O to tii rH CD • 1 I I . i o OS ’ Os C M IN CO rH • • • . t• •• co i co •• to co o CM CM tit CM CM CM 03 Ci H I 00 H Ci I I III I I os«* r— I lO rl CO o in 1 I rH -P d © o ** 1900-1932. Sugar, of Philippine Destinations Table 2.3. 1 eo +3 CM d © OS o d i—i x ; o ©

s I—I i—1 O to 1 tit . os CM o t JI rH rH in I I Io • d to >j u — ta ' t>sd•—* * © H >s d •h a u —■ © I—I ra -p © © O +3 +3 •H *H O 03 £ d JCS © P P O f4 © -p >s © +3 d ® 0 0 P 0 I * I CM cn to in co CO 0 o o«k to CM o O O rH to «k to CM 1 —t I I I I I I 11 I 1 1 O 0 0 O ' CO rfcO o o 05 rH rH i—t oo 05 05 H O O rH to rH ^ft to CCM CO •k 05 IS CM O T jl 0 O 05 o o 05 o 05 o I «k O H O O O m • 05 o • o 05 CO I • 00 rH 05 rH 0 r» O P 1—1 CQ 6 •H 0 t>» 0 0 > 0 0 0 0 ft pa 0 #k 0 © p O 0 O 0 0 © ft P p | rH 0 O ft O O •H O P 0 ft 0 ft 0 ft 0 0 0 ft p O 0 0 0 P ft f t rH 0 0 0 ft © O 0 *i"4 f t *>» 0 CQ rH 0 60 •k P <1 • 0 ft < O • 0 ft O • 0 P ra 0 • 0 h> CO i —I 1 ft ft 0 0 •i—< ft © 0 O ID I 0 O • •rH P -— . 0 •rH 0 P SP 0 0 P 0 CQ 0 0 0 O i —r ft i —I I 9 IP CM It 0 S « t ic co I1 0 Ft Ft 6 0 IS I II I I I I r 1 O 05 •rH rH *3* CO •k CM IS cn I I II II I 1 1 CO i —i o P * -i 0 0 O 0 .0 O 0 P O 0 CO to to o 05 0 1 1 Pt 0 rH •• P 0 0 0 0 ft O •• • • o 0 CQ CN O rH rH ES rH 1 ■ O +5 rH Ft 0 05 O 0 I—[ , 0 O » +> Ft 0 0 o ft O •* CM CO "0 P to P 0 0 H• O•N • O O rH to 10 O CM o o •sft O CM O • • • • CM O O in 05 P Ft 0 0 0 rH CM • CO t o to CM 05 •k CM O 0 p *u r Ft 0 i i i ft 0 Oa o co Table gg. Destinations of Philippine Sugar, 1900-1932 (concluded) •• IS H to CM •k ES co CN 05 rH 05 rH 05 O 0 i0 CQ S P ft CQ 0 of Ss I aP 0 p ft 0 O ft o » o ^ ft O Ft e«h 0 Ft cd fefl ft CQ CQ CD P i—I cd cd 6 0 CQ ft ft ft 0 ft ft Ft H ft CO cd PQ w _ 0 .0 O CQ •H u ft 0 rH p o 0 P o O Eh i-l © Ft ^ -H Ft 0 0 +3 S P 63P 0 © P f t 3 0 0ft P t,0 Ft ,0 3 P t O 0 0 P © to O Cl S fflHa O O H 0 P O Eh © 0 ft 0 0 0 P p 0 0 ft 1—1 0 P O P 0 0 0 ft 0 0 6 0 Ft 0 ,0 P ft- 0 0 CO 1—t ft ft 0 0 to O O ft •0 P 0 ft ft 0 > 0 *rt © O 0 0 O O P 0 0 Ft f t © 0 © cc O ft ft PH ft 0 Q 0 0 0 *k 0 © 0 0 0 P 63 t w f 0 ft 0 • ft • ft P 0 rH •1—1 ♦ r0 0 Ph p ft O 0 s 0 0 _ __ ____ rH CM muscovado type. Centrifugal sugar averaged 123,508 short tons, or 44 per cent of the total sugar exported in 1918-22 and 402,932 or 85 per cent of the total in 1923-27. The ex­ portation of centrifugal sugar v/as further increased to an av­ erage of 787,258 short tons or to 94 per cent of the total ex­ ports in 1928-32, because almost the entire export of Fhilippin sugar was absorbed by the refining companies in the United States as the one free market for the insular sugar. During the period 1918-22 almost 92 per cent of the total sugar ex­ ported f r o m the Philippines went to the United States.- By 1928-32 almost the entire export of the Philippine sugar was sold in the United St-ates market (table 23). This increase in the amount of centrifugal sugar exported during the years 1922-32 v/as the result of the United States Tariff Acts of 1922 and 1930 -which gave the Philippine producers an advantage over competitors in the sale of sugar in the United States. Refined. Refined sugar exports occupied an insignifleant position in the Philippine trade during the early part of the twentieth century. 'The reasons for this were: The high cost of fuel necessary in the evaporation, recrystallization, and drying of this type; the limited local demand for the refined sugar; and the long journey tc the United States ports, which often resulted in the refined sugar becoming damp and deter­ iorating in quality. The average amount -of this grade of sugar exported in 1900-06 was only 463 short tons, practically all of which went to Hongkong• This refined sugar constituted about 2 per cent of the exports during 1918-22 and less than 1 per cent in 1923-27. Since 1930 the exports of refined sugar have exceeded the exports of muscovado sugar. The average export 93 of refined sugar in 1928-32 was 30,871 short tons or almost 4 per cent cf the total sugar exports of the Archipelago. Since 1906 almost all of the refined sugar has "been sent to the United States. Changes in Destinations. During the Spanish rule the United Kingdom was one of the leading importers of Philippine sugar hut her importations declined and entirely ceased after 1919. During 1900-19 the annual amount exported to' Great Britain ranged -from 1,102 to 67,193 metric tons. Great Britain Yifas one of the great consuming countries v/hich depended on imports. 'Then the Tcrld TTar cut off Great Britain's normal beet sugar supplies from continental Eur­ opean countries in 1914, the British Government after the war by means of a bounty gave encouragement to the British far­ mers to produce sugar beets. The great cane producing countries expanded their production during the World Ear to provide sugar for the British markets. The average sugar production in Great Britain.was increased from 2,000 short tons, in 1919-20 to 27.9,000 in 1929-30. This domestic output represented only a small proportion of the total consumption which amounted to 2,392,500 short tons (raw) in 1931-32.^^ Great Britain has imported large amounts of cane sugar from Java,‘Cuba, and the British ’Vest Indies. Large sums of money were invested by the British financiers and exporters in seme of the Javan sugar mills. These capitalists also leased land from the natives for use in producing cane. The British capitalists invested money in one of the sugar mills in Cuba.(^) The English investors have greater influence in their home (1) A. A. Roberts, The American Sugar r.efining Co., 1934 (arranged)' (2) Dr. 0. C. Stine, TU.3.D.A. 3u. of Agr. Econ., 1934 (arranged 94 markets than the foreign exporters who deal in Philippine sugar. The high tariff duties imposed by the United Kingdom on foreign sugar^ ^ and the preferential treatment given by Great Britain to some sugar exporting countries in English markets have discouraged the shipping of Philippine sugar into that country. Japan* s production of sugar in 1920 was about 65,000 tons while her consumption was over 500,000 tons. Formosa which was acquired-by Japan in 1894-95 produced only 30,000 tons in' 1895 but in 1929-30 the production had been increased to 787,650 metric tons (estimate) because of the aid given to the industry by the Japanese Government. This expansion cf pro­ duction resulted in an output in Formosa and Japan almost equal to the consumption cf the Japanese people which was 930,000 metric tons (raw) in 1931-32.^^ Japan needs foreign sugar only for refining and for con­ fectionery products which are exported in large quantities. This supply can be obtained from Java at lower prices than from Formosa because of the cost of production in Java was about 30 per cent less than that in Formosa. In 1933 Japan (including Formosa and Korea) imported only 116,894 metric tons. The Japanese capitalists and exporters have invested in some of the Javan sugar mills-and have also rented land from the natives for growing canel These Japanese^ traders who have been naturally influential in Japanese markets have (1) See table 24 (2) A. A. Roberts, The American Sugar Refining Company, 1934 (arranged) 95 shipped Javan rather than Philippine sugar to the home market. China which was one of the most imoortant markets for Philippine sugar during the early period of the American occu­ pation, stopped inporting this sugar in 1932 becaiise the Chinese importers and investors found a cheaper supply and more favor­ able commercial relationships in Java where they, also, had money invested in sugar mills. They produce cane by leasing land from the natives and by employing Chinese coolies on the J plantations. Consequently Chinese traders were able to sell sugar in the Chinese markets. Table 24 Countries United Kingdom Japan China British India (1) Tariff Duties Imposed on Sugar by Selected Countries, 1933. : Raw Sugar : cents per lb. : Refined Sugar : cents per lb. 1.765 0.94-1.848 1.470 1.900 2.532 1.994-2.780 1.740-3-. 600 2.350 G. G. Gordon, A Brief Review of the Phil. Sugar industry, 1933, p. 7. Another reason for the changes In destination cf Philippine sugar is the nature of the Philippine Laws which restrict the use of land for production to Filipinos and Americans. These laws have prevented the English, Japanese and Chinese from ex­ tending their agricultural and industrial activities In the Archinelago. The Philippine labor Laws do not allow the use of Chinese coolies and other low-paid foreign farm or factory labor­ ers who would compete with the Filipino laborers. Since the passage of the United States Tariff nets of 1922 and 1S30 giving greater protection to the sugar producers In the United States and Insular Possessions the American market became the principal market for Philippine sugar. This is 96 shown by the fact that in 1923-27 the proportion of sugar exported to the United States was -86 per cent cf the total sugar exports cf the Archipelago, increasing to 98 per cent in 1928-32 (Table 25). Handling and Financing Exports. --- -Sugar; -Export ing -Firms "» The Philippine sugar planters have not been as progressive as the producers in Cuba, Java, Hawaii, and. other cane producing cpptries of the world in the competitive marketing of their sugar. The latter countries established strong marketing agencies in the great sugar mar­ kets of the world before the Philippines. The principal dev- • elopment that has aided the marketing cf Philippine sugar was the creation of a sugar marketing agency In Few York by the f Philippine National Bank discussed in last section. The pro­ duce department of the Manila trading center and enchange was organized In 19 33 for the purpose cf providing a mere suitable place for dealing in sugar and other commodities, host cf the selling cf sugar in foreign markets has been handled by the English, American, Spanish, and Chinese exporters although some Filipino exporters have been active in the .exportation of Philippine sugar. The annual range cf the shipments of 25 exporters of Philippine sugar who handled 3,427,000 long tens or 97 per cent cf the total sugar exports during 1917-27 was .from 1,441 to 87,405 long tens (appendix, table D). There were five firms operating during the entire period (11 years). The six British and the seven Filipino firms exported practically the same amount of sugar during 1917-27, which was about 300,000 long tens or 23 per cent for each nationality (table 97 Table 25. exports of,Sugar from the Philinnines, 1898-1932 ' ( 1 metric ton------2,204.6 lbs. ) Total to all countries Total to United States • • Year : : « • Quantity : Quantity : (metric tons) : (metric tons) : Percent 1898-02 91,680 12,443 14 190-3-07 109,646 24,330 22 1908-12 160,331 104,404 65 1913-17 229,649 95,470 42 1916-22 248,321 131,521 53 1923-27 428,240 369,007 86 755,857 742,185 98 1928-32 (1) Philippine Bureau of Commerce and Industry, Sta . Bulletin No. 3, 1920 , pp. 182-183. An nual Renort of the Insular Collector cf Customs, Manila, 1933, tJ. 89. 98 25, append!c§s table D). The single Chinese and seven American firm* exported nearly equal amounts during 1917-27, or about 18 per cent of the total for each. The five Span­ ish shippers exported 16 per sent of the'total during the same period. Entry into United States Ports. The average quantity of Philippine sugar entering the custom districts of the United States each year was 425,905 short tons in 1923-28 and 710,727 in 1929 (table 27). The Atlantic coast ports received 80 per cent, the Pa­ cific coast ports 18 per cent, and the C-ulf coast ports 2 per cent of the Philippine sugar in'1923-2S. In 1929 these ports received 88, 3, and 4 per cent, respectively. The chief ports cf entry of Philippine sugar were Phil­ adelphia, Baltimore, hew Yorh, San Francisco, and hew Orleans. There was a noticeable Increase in the shipment of Philippine sugar tc the Atlantic coast ports and the C-ulf coast ports, and a decrease tc the Pacific coast ports during the sane years, host of the sugar went to the Atlantic coast ports, due to fact that transportation costs from the Philippines to the At­ lantic refineries through the Panama Canal and then to the princioal consuming centers arc less than from the Philippines to the Pacific refineries and then to the eastern consuming centers of the United States. The refining companies in the Pacific coast, such as the California and hawaiian sugar Refining Cornerstion, Ltd., owned by thirty-one Hawaiian sugar producing companies, and the western Sugar Refinery, controlled by J. D. f1) and A. 3* Sorechles C o d 1 melt and refine raw sugar largely (1) Farr & Co., manual of Sugar Companies, rev?'York, 1934, pp. 69-70; Ibid, p. 90. 99 Table 25. Nationality of Exporters of Philippine Sugar, 1917-27. • Nationality of Exporters ; • • * No of firms; • • • • Amount (long Tens) ; Per cent British 6 799,901 23.5 Filipino 7 796,713 22.*5 Chinese 1 630,998 17.9 American 7 628,623 17,8 Spanish 5 571,265 16.2 107,442 3.0 3,534,942 100.0 Others Total (1) Facts and Statistics about the Fhilipoine Sugar industry, IS28, Table 10. 99 Table £7. Customs District Philippine Sugar Exports Entering Custom Districts of the United States, 1923-29. 1917-22 t n ----: 1929CD 1923-28 U ) » : * (per Average :(per «• Average :(per (short tons ): cent) (short tons) : cent) :(short tons): cent) Atlantic coast Maryland Philadelphia New York Virginia Massachusetts Total 117,383 132,196 91,283 -- 149,251 77.3 Pacific coast San Francisco Los Angeles Washington Oregon Hawaii(3) Total Gulf coast New Orleans Galveston Total Grand Total CD (2) (3) 27.6 31.0 21.3 - 234,672 232,193 156,228 4,482 33.0 32.7 22.0 0.6 267 341,129 0.1 80.0 72,053 756 1,080 544 17.0 0.2 0.3 0.1 46,293 5,505 2,717 • 1,628 6.5 0.8 0.4 0.2 74,433 17.6 56,143 7.9 2.2 0.2 2.4 27,009 27,009 3.8 3.8 100.0 710,727 100.0 43,903 22.7 9,718 625 10,343 193,154 100.0 425,905 — 627,575 • 88.3 - Facts and Statistics about Philippine Sugar Industry, 1928, table 9. United States Tariff Commission; United States-Philippine Tariff and Trade Relations; Report No. 18, 1931, p. 103. Two hundred pounds. The quantity entering the United States in 1917-22 was not given by states. 100 from .their sugar plantations in Hawaii. Metnods of Financing. The two primary ways of finan­ cing the sugar exports are through the aid cf the Philippine I National Bank, which has an agency in New York, and by the toll system. The usual method of financing through the Philippine National Bank is to have the agency borrow in New York against acceptances drawn on New York banks and indorsed by itself. The acceptances are sold in the open market. The oroceeds are deposited with the New York Bank against which the Phili­ ppine National Bank In Llanlla sells telegraphic dollar trans­ fers. The acceptances which are generally for 45 days, are created after the New York agency (which received the sugar) and the accepting bank receive advice of the shipment from Philippine posts. Nearly 50 per cent of the recent annual sugar exoorts have been financed by this method. rnhe Philip­ pine National Bank finances the shippers by purchasing 90 day sight drafts drawn cn the shippers’ selling agencies In New York. The toll system was introduced in 1925 by bankers who were interested in the sugar Industry. The raw sugar Is shipped direct to the foreigh tolling refiners where It is refined and the finished product is sold. _-.ftor the deduction of charges for refining and selling, the balance Is remitted to the shippers. . 1 P r* U in in market (1) -L_V» ~ L/.-1 S By this method, the producers carry the risk h) •’M 1 U-! til. Ydwin 3. Geer i~> - • Financing and hxcha July 1925, pp 3-4. i t c -L ^ o •: 1 p ~ -L Li "’•'B "f •- / T » -n ^ -* v. r-\ ~n -■ ^ J . ---- h - ■. J- > Bept. oi Commerce, full. , Tr ad e Inf orna t icn Bui. /Ii o CHAPTER VII COMPETITIVE POSITION OP PHILIPPINES IN WORLD SUGAR TRADE Position in World Cane Production. Within the last de­ cade production of cane sugar has expanded at a greater rate in the Philippines than in all other cane sugar exporting countries. Among the latter, its output is exceeded new only by that of Cuba and Java. The total world production ofcane and beet expanded from an average of 16,843,439 short tons in 1907-11 to 19,773,531 in 1912-16, declined to 18,489,267 in 1917-21, and increased rapidly to 32,244,162 tons in 1930-31 (table 28). The contraction of the world production during the War period (1918-19) was due to the severe reduction in the acreage of sugar beets in Europe. Cane sugar production was slowly expanded during this period. Rapid expansion of production in the twenties was necessary during the War period, to make upfor the contraction -*-n fact, if production had continued to expand at the same rate as it did during 1906-19 (averaging 3.77 Per cent per year) it would have been higher than the actual production in 1930-31, since the production for the entire period, 1906-31 expanded at the rate cf only 2.72 per cent ner year. The world production has declined since 1931 due to the effect cf the Chadbcurne Plan. Cane sugar accounted for 52 per cent of the world sugar production in 1907-11, 71 per cent in 1915-20, 59 per cent in 1921-26, and 55 per cent in 1927-31. Cane sugar production 101a CO CQ CQ Ci rH CQ * CQ I 0 01 Cl CQ B- IQ • C\J O g co H to •A to Ol CO o A IQ rH O IQ rH CO HI O O O to O a a a b£> Ol BBIQ o o rH a oi iH CO H CQ d rH CQ tO 01 fi- tO «> CO 00 CO B- rH CO Oi CO H* tO tO CQ CQ CO 4k 9> to I E- CO Cl H Ol IQ CO B- Ci cq cq 01 H I b- iH CO Ci o H cn CO CO H P o CO CO CO tO I Hi o to CQ 4k to o HI Hi CO CQ Hi iH Oi 0h Hi B- CQ o> Oi 0» oi 01 HI tO Cl 00 CO HI * CO o 00 4k Hi «H iQ IQ * IQ IQ o o 00 A CO rH Hi a a CO H< Hi CO rH * brH rH O 0k rH o 01 E- ■sH CO tO B» Ol CO CO a CH CO CO H 4k . a CO rH *5 o Ps P CO H CO Cl I E- CO B* H H< CO o 00 CO * rH cn O IQ B0k CO to rH CQ 00 tO rH tf» to CQ Cl i —1 CO 00 H* IQ 0 m I CO iH 0k CO 4k rH O 01 H< tO oi CO CO fi01 to 4k CO IQ Hi CO rH Oi 4k to tO Hi O 01 Ci to P O CO CO CO iH P fD lO •1 to co rH cd rH tO Ol CO * o o HI Cl IQ 4k w rH rH © H rH P P EH rH B^ Ol O •i to CO •IQ CQ CQ Hi 0k A O Hi CO Hi IQ Hi 0k •> O 01 rH CQ Ci CO * rH rH CQ A Hi IQ CO tO B» * to CQ CO CO o Cl 0 CO 01 CO tO CQ tO 0k I B- O Cl 0k to HI O o to co CO A to rH to A IQ rH IQ to IQ IQ 4k CQ CO CO cn * to cn B•k rH o CQ 0k rH rH «k rH o to cn * CO o IQ 0k rl o o E'­ en B- . Ol «> o rH tO a H H CQ H O B- iH CO • IQ IQ CO CQ Hi rH 00 •t rH H CQ O iH o CO 0k to Hi IQ CO tO A 'rH H CO A Ol * CQ Ol 0k CQ rH CO O rH « to rH 0k CO CO H 4k « CQ H CQ CO Ol CO to CO 0k E- CQ 0k CO rH CO BCQ co O B- • B- 0k rH rH o to o iH «» CO CO B~ «k CO CO Oi O A B* rH CO iH tO CO 0k Oi rH CO « Hi tO * tO CO CQ CO tO O O B- CO IQ '0k Hi 0k Oi CQ B*» ©C O Ol o iQ 0k H rH 1 CD Hi GO rH rH A CQ B» O 0k IQ to iQ to to * Hi Oi Oi * B- 00 CQ rH CO 0k Ol CO to« B^ CQ A to CQ C- A CO S3 Eh O B § Ph -H o § s m nd CQ H cd CQ © 41 rH P P © rH S3 •rl S3 s CQ -P o o s 0 P o o S3 cd CQ © rH s3 •H Pr 09 Pi cd 09 XI Ph cd e>o JH o *H P3 0 p u © 1 cd Oi A 01 CO 0k CQ to HI 0k CQ CO BtO CO A oi co Hi A CO rH rH CQ IQ A CQ BC- A Ol rH rH 00 A to A CO A CQ CQ 01 CO to to CQ IQ H Pi 00 CQ A 01 A I SH P 60 P CQ P o © o •H P © •H P P P CQ P• j Pi ° P> & •H © © •x •H P i a O P o © H h © © -P © P § cd Q h3 o © «©d cd rH Cl3 P to -P «d a) cd +3 •H x cd c> O P P P h » o P3 EH EH S o H 3 CO CQ CQ A rH CQ © E rH o 00 Ol CQ Hi -P o rH A o o o A CQ CQ B- JH S3 CO Hi CO 00 CO CO * to rH Ol H CO CQ « o * IQ Hi hi o •i CO CO B« CO IQ tO CO •» CO co 0k CO o •r^ -p o * CD 01 rH « rH iO «* CQ a CQ 01 Oi Ol 0k H< Hi IQ •d* « Ol H CQ CO CO CQ CO O * CO CD B0k CO H P © h CQ P3 © © =3 Pi H O P JH P O 102 was expanding at a none rapid rate than beet sugar production prior to uhe ..ar period but expanded less ranidly after the War on account of the recovery of the beet sugar industry of Europe. The three principal cane sugar producing countries of { the world during 1907-31 were' Cp.ba, British India and Java, while Brazil in 1923-31^^ ranked fourth and Hawaii v/as the fifth leading cane sugar producer. Hawaii and Porto Rico each produced more sugar every year than did the Philippines between 1906 and 1925. Since 1926 the Philippine production has exceeded that of Porto Rico and since 1931 and 1932 that of ( ‘ Hawaii and Brazil respectively^ Philippine production in (2 ) 1932-34v 1 ranked fourth in importance among the cane pro­ ducing countries cf the world. The production cf sugar in the Archipelago’v/as expanded to an average of 784,879 short tons in 1927-31. This amounted to an average1of 4 per cent of the world cane sugar production in the same period..(Table 29) Table 29. Proportions Occupied by the Principal/', , Cane Producing Countries of the World' . Period1907-11 1912-16 1917-21 1922-26 1927-31 1932-33 :Philippines’ .Hawaii: Porto: Cuba :Virgin :British : : Rico : Islands:India 1.8 2.3 1.8 2.73 4.03 6.4 5.9 5.43 4.41 4.2 4.71 5.4 3.24 3.61 3.5 3.1 3.73 5.25 18.4 26.8 30 •2 30.0 24.7 13.64 0.2 0.078 0.07 0.03 0.033 0.03 25.85 25.21 23.3 19.93 17.48 23.57 (1) United States Tari,ff Com. , ooa t otics on Sugar, Hay 1933 p. 9 1) Farr 2: Co., T,Torldls Sugar Production, Companies, 1934, pp 56-57. (2) Ibid, pp. 56-57 mual of Sugar Java 16.0 14.0 13.4 13.5 16.9 11.4 /vjti?I it.'ik S h o r t t o n s fjOOO 4.O00 ooo fines 7OOo Tio.}' V ro d v c iio n 103 Cuban sugar production reached a high point in IS27-31 averaging 4,S0o,42o short tons or 24.7 per cent of the v/orld cane sugar production. r>y 1932 the Fnilippine Islands v/as orodu.cing 5.6 per cent of the v;orid cane sugar output exceeding all other United States Insular Possessions, while on the other hand, Cuba’s share had fallen from an average of 24.7 per cent during 1927 to 1S51 to 14.7 per cent in 1932. The Philippines changed their interna­ tional position during these years attributable primarily tc in­ creased protection accorded the Continental United States and Insular Possessions under the Srnoot-Hav/ley Tariff, and to limitations on Cuban Javan production under the Chadbourne Inter­ national Sugar agreement approved in IS31. The Chadbourne Plan in Relation to Philippine Imports. fact that sugar pro The ction throughout the v/orld expanded faster ,,_ L> -h 'O' than the demand for sugar caused the burl ng the late twenties price cf sugar tc decline In Rev/ York and London from 3.8 and 5.1 cents per pound, in 1S29 to 2.9 and 3.OS cents, respectively, ^r»ces d u r i n g this p c t i o J a n a the g r e a t accumulation c f w o T L d s u g a r in 1932. ^ ^ The severe decline in world sugarAstocks brought about a demand for some method of controlling production and ex­ ports in the surolus producing countries cf the v/crld. This de­ mand resulted in a method of control knov/n as the Chadbourne Plan. (2) The Plan v/as adopted on Hay 9, 1931 b" the rspresenta- (1) U.T.L.i. Yearbook, 1332, p. S81; Lr. C.C.Stine, U.3.Bureau of _-.gri. Icon., 1934 (arranged( compiled from the Yearbook cf the Int. Institute of .agriculture and "The Iccr.cm.ist , London. (2) The Chadbourne Plan mas named after its author, Thomas L. Chadbourne, Lev York lav/yer and representative of .-.merican sugar Interests In Cuba. The two principles cf the plan were: (1) that each exporting ccur.tr" should ’ segregate its entire unsold surplus stocks of sugar and finance that sur­ plus for 5 years/cne-fifth cf the segrated stock tc be sold each year; and (2) that production and experts be re­ duced for 5 years on the basis cf the 1931 croc. The Plan is administered by the Intemotional Sugar council which is composed of 27 members, or three members from each signatc — 104 tives of Cuba, Java, Germany, Belgium, Czechoslovakia, Hungary, and Poland during their conference at Brussels. The objective was to limit exports and control production of stocks. Peru and Yugoslavia accepted the plan before the end of 1931. The members of the plan produced about 40 per cent of the world* s sugar and nearly 90 per cent of the world1s exports sold in foreign markets. The Chadbourne Flan which was adopted, be­ came effective for the 1930-31 crop. It orovided,production and export quotas for the members for 1931-1935 (table -30 a.) As a result of the operation of the plan a reduction in the world sugar production took place, from over 32 million short tons in 1930-51 tc less than 27 million tons in 1932 and a reduction in production of the members of the agreement from 12.7 million tens tc 7 million tons for this period (Table 30, Fig. 15). However the accumulation of stock carry-over was at a faster rate cf Increase than that of the v/orld sugar pro­ duction. accumulated stocks Increased from S.5 per cent in 1920-21 to 9.6 per cent in 1927 and to 28 per cent In 1353, or an Increase from 4.5 million short tons In 1930-51 to 7.5 million tens In 1932-33 (Figs. 15 1 16.) In spite of the reduction in world sugar oreduction, the accumulated stocks carried ever has rreatly expanded because world sugar consumption has net ir- >.1the ugh the total world production of sugar has declined since the inauguration of the Chadbourne Plan, sugar output in the Philippine Islands has steadily increased. The countries agreeing to the provisions of the Chadbourne Plan have suff/red (cc-ti'u.-ed from 103) country. The number cf o u k m s is in gro­ wer tier, tc the imnortsr.ee cf each country as a evgur grcnation. The c o u n c i l ’s seat is at The Hague, "clland. 105 Table 30* Chadbourne Plan. May 9, 1951 ^ Sugar Export Quotas of various countries under the terms of Plan 1931-1935 Country Cuba Sugar season Jan-Dee. To the United States 1931 1934 1935 1,000 1,000 sh. tons sh.tons 1,000 sh. tons 1,000 sh. tons 2,885 3,136 3,136 3,136 3,136 902 958 958 958 4,038 4,094 4.094 4.094 1931-52 Java ^ b e g i n n i n g Apr.1st. Sugar season April-Mar. 2,535 1930-31 Europe Sugar season Sept-Aug. (1) 1933 1,000 sh.tons To the other countries 734 a) Total exports from Cuba 3,620 Czeeholovakia Germany Poland 'Hungary Belgium Total Europe Total above countries 1932 629 551 340 93 33 1,646 7,801 1932-33 1953-34 1934-35 1935-36 2,645 1931-32 2,756 1952-33 2,866 1933-34 2,976 1934-35 .629 331 340 93 53 1,426 8,276 629 331 340 93 33 1,426 8,386 629 386 340 93 33 1,481 8,164 629 331 340 93 33 1,426 8,496 a) includes 291,000 short tons drawn each year from quantity segregated b) includes 110,000 short tons drawn each year from quantity segregated Lynn Ramsay Edminister, U. S. Dept, of Agr., Bureau of Agr. Economics, Agricultural Price- supporting Measures in Foreign Countries, July 1952, p. 6 8. 106 to W W O O W l O O l O WjoNroOfflN© OOtO(MU)(Ot'© C-C-COOOtOlOOCO 0202021002020202 xa © p rt p 73 a P .P P p cq 73 © 43 P © 73 B o ©* Ttf O l« tp rH tO W W to 10 M O) r l tO © _ M «j © P c- to to cn ~ P to O D» C O 02 S3 O © N to (O V s V s V s 02 fc- CO 02 ©• 02 00 to c— to o CO CO rl S W r! tO C- tO 02 tO O ffiW H CQ P C © 73 © to CO o fctOtOrltflWOOW #V IS *s Vs Vs Vs Vs V 02 02p2^t002t0t0 to to ©< ^ © CO -E g ,ja 73 © CV2 00o 8 0 O O O o ■ fi-8 •© o <»H P o tn - m a © © © P P a • o to to © « 8 o! 03 o P 02 to 02 02 to to to to 1 1 t 1 1 1 e- 00 03 P 02 02 02 02 8 to to © to 02 02 02 © 3 E-« ^ 03 >i M 01 ® to to oi 7d* W O O W P r i® ^ 1 V s V s V s V S V s ^ V s V VS v P P» o p © o ^ , tO 03 © tO 03t-tD02tQ02Pl0 S i B S f c ” to p to p 02 co to to £ P P _ 5 i ci J> 4 02 02 02 8 8 3 03 03 O -l C Jl C Jl 03 03 © 03 01 Ol P P H rH P H H P P P P p p 02 tO Million Shorhci). J , f i d. /fx/ r p r o2* d u c t i o2nj k;^ I ... _ , . A , , s 24 orSuoar »« . '21 '3 * 33 -W^oZ t io ( C M * L u T h * P tM ,V - S - ■*> MS 30 roducii\(\ .rch:* oelagc have also been greater than Porte Rican exports in every year but two. (Table 32, rig. 17.) •v e v i m The Philippine sugar exports which vu +3 u o 2 ft (snoq qaotig) no xq.oivpOJ:a: pH 04 o o o* to rH sit o o o* o o o« o o to• CT> ( qtioo jea) trofqoupojj oq sqdxaoaH jo oiq.ua a) £2 s (snoq q.jot[gJ sq© 2[j'SH ’S*U tri sq.dT909H (snoq quoqg) noxqoupond ( qnao jag) noiq.oupoJ:a: oq. sqdxaoag; jo oiquH B- tO o o o* 03 pH B- pH to -tjt O o o0k o o to 04 t> B> O O to -* 03 to CO rH to to O O O«* to 03 00 O O O-* H C» to* 03 to 03 O o o• to t-o«* o o o* to to *o B04 * 04 0k CO m O O CO pH to 00«* to to • e> 04 ♦H 05 £ C3 snoq q-ioifgjsqastnuM *S*H sqdfao©H o o o B- to (snoq qJO-qg) noxqoupona: to o o om o Bto o o o*» to to to o o o«k B04 o o o« to Bto O o o* o B- B- 04 qnao jei) noxqoupoua: oq sqdxaoag jo oxqus; to to B- rH 04 CO United States Production is Table 351 • Production of Sugar(1) in The Philippines* Hawaii, Cuba and Puerto Hioo and Amounts Exported to the United States (qn90 J9cC) uofioupojj oq sqdTaoa^ jo oxqug; 6) 108 04 H 03 a 1H 04 03 H 04 04 rH rH 1 t0 03 03 03 04 04 rH pH I 03 B- 10 03 04 04 pH rH mm?? c Shorties 5j7So * 4.7SO 2,,ooo te rio ff I f 04 r*5 - / *05 le 4 7.£ * P ° r t s #o7 ‘0 8 '«>? /0 " • / S * J » r / r o w f# v t s e l e c t s C o u n trie s Ill only 95,959 short tons in 1904 were- consistently increased to a high of 1,120,572 in 1933 due to the free trade relation between the United States and the Philippines and the increased tariff duties on Cuban sugar. (Fig. 18) Beginning with 1932 the Philippine sugar exports have exceeded those of Hawaii .every year. The average was 150,596 short tons in 1904-13, 649,992 in 1924-30 and 975,265 in 1931-32 (Table 32). ' Cuba and Java, the two principal cane sugar exporting countries, exported, respectively,- about 11 and 9 times as much, as did the Philippines in 1904-13, 7 and 4 times as much during 1924-50, but only 3.1 and 1.8 times as much in 1931-32. Hawaiian and Puerto Rican sugar experts were 233 and 72 per cent, respectively, more than that of the Philippines in 1904-13. In 1924-30 the Hawaiian sugar experts were 23 per cent mere than that of the Philippines, but the latter Island exported 17 per cent more than did Porto 'Rico. The Philippine sugar experts in 1931-32 were practically the same as that of Hav/aii but 14 per cent mere than that of Porto Rico. Cuba, Java, Hawaii, and Porto Rico had the greater amount of sugar exported during the early periods under study than that of the Philippines because the former countries were already producing greater quantities of the higher grade sugar demanded by the principal markets of the world while the Philiouines was just starting to produce the 95° centrifugal sugar. Hawaii, Pcrto Rico srd Cuba had free trade and prefer­ ential treaties with the United States prior to agreements made (1) Tt 3 1904—13 average was considered as a sinvle pericd !n order to correct the effect of seme abnormalities dr. the Philippine sugar Industry during the early part cf the .-mierican a dministr a t icn. 099 J rh o o te n J m e t r ic ions / ooo ?00 too 900 <00 ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ M I R M B B H ■ ■ ■ ■ ■ ■ ■ K H H M I S f l M H r a 8 B H H U B H B M B B i 8 M m m H — 8 H H 665869 »oc 'S u g a r ttjC fo tig to a i l C o u n tries a n d to the UniteJ S ta te s 112 Table 32* Year 1904-08 1909-13 1914-18 1919-23 1924-30 1931-32 (1) Philip­ pines {short tons) Ishort tons) 131,760 169,432 278,675 273,442 649,992 975,265 1,241,724 1,999,889 3,160,680 4,119,207 4,693,114 2,978,689 (3) Cuba Dutch East ,Indies (short tons)i Hawaii (short tons) Puerto Rico (short tons) 1,228,603 1,411,754 1,419,837 1,762,612 2,416,789 1,703,823 436,858 567,437 602,722 573,872 802,598 972,263 183,785 335,584 373,159 401,203 556,315 859,497 Yearbook, Dept, of Agri . 1907, p.688 1912, p. 654 it ii it n 1915, p.499 it ti it n 1920, p.682 IT tt IT IT 1921, p. 662 it n Tt IT 1922, p.783 IT TT IT Tt 1924, p.809 II IT 11 n 1926, p.1013 IT IT tt n 1928, p.882 IT IT it n 1930, p.702 tt n Tt IT 1933, p.492 foreign Agricultural Service, compiled from commerce and navigation of U.S., 1906-17; Foreign Commerce and Navigation of U.S. 1918. Monthly summary of Foreign Commerce of U.S., June issues 1919-1926, Jan. and June issues, 1927-1932. Information from the Custom House, arranged to U.S. Dept, of Agr. Bureau of Agr. Economics, Washing­ ton, D.C. 1934; G.G. Gordon. A Review of the Philippine Sugar Industry, 1933. it (2) Export of Sugar from the irhilippines and Competing Countries. tt IT II 113 "between the Philippines and the United States. Further::ere the American capitalists in Hawaii, Cuba and Pcrtc F.ico who aided the development of the sugar industry of these countries during the early periods had great influence in the American markets; thus these countries had already established a more stable market In the United States. Cuba and Java had estab­ lished good markets earlier than the Philippines because the former countries have created efficient market Ins: organizations with agencies in foreign countries to sell sugar in domestic and foreign markets. A comparison of the relative amount of sugar marketed in the United States, from the standpoint of source, shows that Philippine sugar.has steadily gained In importance. In the period of 1897-01 Philippine sugar accounted for only 0.7 per cent of the total United States supply. In 1927-31, 10.3 per cent of the United States supply was Philippine sugar and by 1932 this figure had increased to 17 per cent (table 33). The greatest increase occurred during the last ter. years of the period studied. The proportionate amount of sugar secured from Hawaii, Porte F.ico and Cuba has net increased as rapidly as the amount coming from the Philippines. The proportional amount of sugar consumed in the United. States, coming from Cub?, mas most Important during the years 1312 to 1928, when Cuban sugar constituted from 50 to 55 per cent of the total consumption. The Hawaiian, Porte Rican and Cuban sugar indus- Ur” have a greater proportion of their surar marketed in the United States than the Philippines because cf the reasons mentioned previously in this section. Sugar experts from the Philip'oir.es to the United States did not attain great imp* co o CO 02 02 . CO 02 rH 1 i— ! to Cl Cl rH 1 —1 H . 1—•1 O to o o to tO • 02 •• 02 •• fol H r U* lo 01 i— 1 r—1 « o r - o rH 1—1 • tO LO 02 02 02 . 02 rH > LO rH •rH tO • 1 ®S> rP r H 1--1 LO C0|C2 02 Cl rH 02 . . O to i—1 01 0 2 CO • . to 02 C2 LO rH rH •« - M •• P as i £02 rH LO to i— 1 to ^ Cl CO c o lto to O CO rHCl Ol cdrH — P • o .. • « rHi'O LO jlO O o rH to P H ^ LO tH i —I02 rH C O i— 1 05 OrH 02 Cl rH b 02 o PCD ©rH CO a, to 01 — O o rH i1 GO CP CO I> i— 1 Cl — ■«d •• • • P P 1 ©02 02 r H G O 101 rH ]rH 02 02 • « CO . • t o LO i— ! O CO CO t o CO 0 2 rH i---1 o O O rH 11 . . H tO rH rH CO 0 5 J> ^ H rH LO E> O 02 C2 rH O O rH Cl 01 (D c 33. i —I o -P cd to o •H cd p cO tO © Cl © c P P o G3 P C3 &D P CO G5 P O P P> i —l a p Eh rH Cl cd G rH P P *rl Cl p •H c O O -P P ® ® CO SO Cd P P O <3 O © i— ! E h •H Cl { P EH C -i C ft-ri © c ‘ri p c P p

3 P G P • H cd G P O p 0 C5 i —! •P 01 ci P _ P! H SO rH P Cd P O Eh Tariff for marketed o o for P r H © 02 • 02 02 I 02 01 01 1 of Sugar O o •» 11 Sources o on sugar Gray. •HOI PrH CD •^ • • • ?0 £- 02 o Commission, Statistics on S/illet and 002 • £- rH 1 ©Cl to to i—1 i— ! i— ! . 5>-o <3 P O C Eh o vp £ <3 i—I iH Q C CT •H States •• rH Table o o 1 —1 (Table 02 102 02 • i—1 . 1933, p. 13. 02 rH Cl State in the United r - t o LO o i—I i—! i— 1 (1) United 01 Consumption rH . 02 to 9) Dased 114 11 - until a number of favorable factors developed. Among these were the expansion of production of higher grade sugars in the Archipelago, an increase in the number of investors and exporters interested in the Philippine sugar industry and the establishment of the Philippine National Bank agency. As a result of these developments, sugar exports to the United States in 1S32 amounted to almost 100 per cent of the total sugar ex­ ports of the Philippines. The proportion contributed by the United States beet sugar industry to the total sugar supplied the American people has expanded rapidly from 3 per cent in 1897-1901 to 17 per cent in 1927-31 and 21 per cent in 1932 due to the high protection and the'government bounty given tc the American industry. The United States cane sugar output has occupied a minor position in the total sugar consumption of the United States, being 11 per cent in 1897-01; declining to 2 per cent in 1927-31 and in­ creasing slightly to 2.7 per cent :n 1932, shewing no apprec­ iable increase in spite of tariff protection. In general the Philippine sugar contribution to the total market deliveries in the United States had a faster rate of increase than those of competing countries although Cuba has contributed the greatest proportion during 1897-32. This In­ crease in the sale of Philippine sugar in the United itates v/as l .0 o0 e great -advantage resulting from the favorable trade ions between the P h ilippim0 ~^ cent years and the great improvement made in the sugar industry cf the Archipelago* Competitive Advantages and Disadvantages in Supplying United States market* It was not until after the establishment 116 of the first modern centrifugal sugar central, the introduc­ tion of plant breeding work, the enactment of free trade re­ lations between the United States and the Philippines, the Establishment of the Philippine National Bank, the passage of a high protective tariff act by the United States Congress to protect the domestic and Insular sugar producers and the favor\ able adjustment of transportation rates from the Philippines to the United States that the Philippines attained an advan­ tageous position In supplying sugar to the American market. Although the Philippines have favorable climate and sell for the growing of cane, as well as cheap farm labor, they could not compete in the American market with producers In Cuba, Hawaii and Porto F.ico without the great encouragement given them by the United States and the Insular Governments. This conclusion is based on the fact that Cuba, Hawaii and Porto Rico had already attained a higher degree, of development in the application of modern methods of production, and manufactured higher grades of sugars than the Philippines prior to the V.'orld Uar. After the introduction, in 1885, of the central system, 200 Paris trained engineers and machinists constructed many large and efficient modern mills in Cuba.^^ During 1S0S-14 American csoitalists provided available credit facilities and aided the industry in scientific methods of production and manufacturing sugar. Thus in Hawaii, Cuba and Porto Rico American capitalists had invested large sums of money for the development of the sugar industry of these countries. Beside* (1) L. E. Jenks, Our Cuban Colony, Vanguard Press, New York, liar. 1928, p. 31] Ibid, pp. 131-132. 117 these three countries had. earlier free trade and preferential treaties than the Philippines which made it possible for the former countries to establish a market for their sugar in the United States earlier than -the Philippines. The other disadvantage of the Philippines in supplying sugar to the United States market has been the high transporta­ tion cost Involved in shipping sugar. Without high tariff duties on Cuban sugar the Philippines could hardly compete with Cuban or Porto Rican sugar in American market because Cuban and Porto Rican ports are nearer to the great refining companies' on the Atlantic coast of the United States than are the ports of the Philippines. (Discussed under Production and Transportation Costs) Cuban costs of production have been less than those of the Philippine Islands. The following discussion explains further some of the advantages and disadvantages Involved In supplying the United States with Philippine sugar. Sugar Yield per acre Cultivated. The yield of sugar per acre in the Philippines, according to the report of the United States Tariff Commission in 1934, has been higher than in the United States, about the same as in Cuba, but lower than in Ear/aii and Porto Rico during 1931-32 (Table 34.) VJhile the average yield per acre from the 30 sugar centrals studied by the Tariff Commission was 2.3 tens, the average for all growers in the Philippines was 1.62 tons in the same period. The stand­ ard of production and manufacturing of 30 centrals was consid­ erably higher than the average for the Philippines. The higher yield of sugar In the Archipelago over that of the United States was due to -superior climate and soil conditions. 118 Table 34. Comparative Yield of Sugar per A c r e . ^ Countries Average Yield per Acre 1921-22f1 ) (short tons) Philippines 1923-28 (short tons) 0.94*®) n Cuba 1931-32*3 ) (short tons) 1.13^ 1.62^ 1.47(1)) 2.6 M 2.0 2.18 Java 6. (1928) 7.00 Hawaii 5.7 (1928) 7.7 Puerto Eico 2.0 Louisiana cane 1.22^ 0.8 1.18 United States beet 1.2 1.44 1.95 (a) f\y*ra.i« (.hj ftreraoe (1) f o r 4.4 # , « P h . ’L ! p p l n e s £ or fhe 3o etntr&lz Sugar Central and Planters Hews, Comparative Costa of Sugar Production from Statement of Tariff Com., Dec. 1923-24, vol. 6, no. 2, Pet). 1925, p. 105. (2) U. 3. D. A. Yearbook, 1933, p. 487; (2) Lippert 3. Ellis, (3) IT. S. Tarriff Com., Eeport to the President on pp. 55-57, pp.67-68. Ibid., 1934,p. 472; Ibid., p. 474, The Tariff on Sugar. Sugar, Bo. 73, 1933, 119 Plant breeding work and the introduction cf high yield­ ing varieties of sugar cane from other sugar producing count­ ries of the world (Java, Hawaii, etc.) have improved the yield of sugar in the Philippines. Efficient control cf the plant diseases and insect pests has been effective throughout the sugar industry of the Archipelago. The high efficiency attained, by the centrifugal sugar centrals in the recovery of the sucrose content and in the manufacturing of sugar have materially aided the yield, of sugar per acre in the Philippines. Cn the other cultivated has not years, hand, the yield cf sugar in Cr.ba per acre increased materially during the last few Rith an average of 2.0 short tens in 1921-22 the in­ crease was only to® 2.2 in 1931-32. Among the sugar producing countries of the world Hawaii and Java have been leading in the yield of sugar per acre which was 6.0 and 5.7 short tons, respectively, in 182-3 and 7 short tons per acre for each count­ ry in 1952. This high yield of sugar peh acre in Hawaii and Java was due to breeding experiments which resulted in high yielding varieties of cane; favorable soil and climate; and a well constructed irrigation system. Sugar Recovery per Ton of Cane. The available records in1924 and 1929 show that the extraction of juice from in the canes the Philippines yielded 5 per cent more than that of Cuba or Java which was due to more regular feeding and higher macer­ ation (Table 35). The waste of molasses in the Cuban and Javan sugar Industry was higher than that of the Philippines while the carbonate ash in refining crystals cf 96° to 97° centrifu­ gal sugar was in favor cf the latter country, showing that the Philippine sugar industry was more efficient in manufacturing 120 Table 35. Comparative .efficiency in Manufacturnag Sugar and Yield of Sugar ner Ton of Cane(^) Country 1929-32^2 ^ 1924 - - -- 1929 Extraction ofUTaste of:Carbonate Pounds of sugar pro­ .juice :molasses: ash duced per ton • • of cane « • (per cent) Philippines Java Cuba Louisiana cane United States beet Hawaii Puerto Rico 95 90 90 (percent)(percent) 6-7 8-10 8-10 0.2-0.4 0.2-0.5 0.4-0.6 (lbs.) 230 243 139 298 237 . 234 (1) Sugar Central and Planters Hews, Vol. 11, i!c. 6, June 1921, p. 231. (2) U. S. Tariff Commission, Escort to the President on Sugar, ho. 73, 1934, pp. 54, 55, 59, .64, 67, 122 and 127. sugar than Cuba and Java in 1924 and in 1929. In 1929-32 the average extraction of sugar per ton of cane in the Philippines was only 230 pounds while Cuba, Hawaii, and Porte Eico had 13.0, 7.0, and 4.2 pounds, respectively, more than that of the Archipelago. (Table 35) The extraction of sugar per ton of beet and cane in the United States was 298 and 139 pounds, respectively, during the same period, indicating that the average yield of sugar per ton of beets is higher in the United States than In the Philippines but less sugar is secured per ten from each ton cf cane refined. Production and Transoortation Costs. The study cf the centrals in different countries by the United States Tariff Commission for the period 1929-32 shews that the Philippine cost cf production including interest was 1.34 cents per pound while that cf Cuba was only 0.77 cents and the costs for Hawaii, Porto Eico, and the United States (beet and-cane) were 2.34, 2.14, 1.S0 and 3.15 cents per pound, respectively, (table 36). Table 36. Cost of Producing Raw Sugar in Selected Countries 1929-32 (1) _______ ___________________ Cent; Philippines: 1929-30 1930-31 Average 1931-32 Cost of production including interest 1.38 1.46 1.18 1.34 Transportation of cane and milling including interest 1.05 1.05 0.86 0.99 Total cost f.o.b. fact2.43 2.51 2.04 2.33 Hawaii: Cost of production including interest Transportation of cane and milling including interest Total f.o.b. factory including interest United States beet sugar: Cost of production including interest Transportation of cane and milling including interest Total cost f.o.b. factory including interest Puerto Rico: Cost of production including interest Transportation of cane and milling including interest 2.50 2.32 2.19 2.54 0.67 0.65 0.59 0.64 3.17 2.97 -2.73 2.98 1.80 1.90 1.72 1.80 2.12 1.89 1.70 1.91 4.11 4.00 3.67 3.93 2.17 2.35 1.89 2.14 0.82 0.97 0.82 0.87 3.3,2 2.?/ 3 *o i 1.003 0.751 0.576 0.770 0.216 0.28 0.296 0.264 1.80 1.733 1.50 1.68 Tola.Lcast f.p-lr.factory IflcLudina 'oferc&fc Cuba: Cost of production including interest Transportation of cane and milling including interest Total cost, f.o.b. fact­ ory including interest (1) U. S. 4Tariff Comm. Report to the President on Sugar, Report No. 73, 2nd series, 1934, P. 56; Ibid: pp. 69—70; Ibid: p. 74; Ibid: p. 130 122 The Cuban cost of production of sugar was low due to tne employment of contract laborers. Thousands of negrcs from Eayte and Jamaica and Chinese coolies were Introduced annually by the American companies and other land and mill owners under the general regulations act which was framed on October 29, 1917.^ ^ The general regulations act has therefore aided the sugar industry of Cuba by-the introduction of laborers receiving low wages for long hours. This has partly helped in reducing the cost cf producing sugar in Cuba. Among the factors contribu­ ting tc the low production cost In the Philippine sugar industry was the low cost of labor, the natural fertility of the soil, favorable climate, better tillage, the increasing use of plant breeding'work In obtaining high yielding varieties, the employ­ ment of the imported high yielding types of canes and the application of modern methods cf manufacturing sugar. Hawaii and Porto Rico have higher costs cf production due to the higher labor costs, the employment of more expensive farm machinery, the construction of. irrigation projects and the application of a great quantity of fertilizers. The beet and cane sugar indus­ try of the United States has higher costs of production than that of the Philippines because the soil and climate are not well suited tc the grov/th cf sugar beets or sugar cane. The use of expensive farm machinery has added to the higher cost. Farm labor in the halted States has been more expensive than that of the Philippines because sugar producers have had to comoete 'for labor with the factories that pay high wages. The United States sugar industry has also employed more expensive (1) L. H. Jenks, Cur Cuban Colony, 1928, p. 182 123 irrigation work and fertilizers in the growing of sugar. The total cost of producing the cane, transporting it tc the mills, and milling the raw sugar was lower in* Cuba (an average of 1.53 cents per pound) than any of the other sugar producing countries in 1929-32. The total costs of producing, transporting, and milling the Philippine raw sugar was 2.33 cents per pound while Hawaii, Porto-Rico, and the United States cane sugars were 0.65, 0.68, and 2.IS cents per pound, respec­ tively more than that cf the Philippines in the same period. The United States total cost cf producing beets, transporting them to the mills and milling the raw sugar was 1.S0 cents per pound more than that of the Philippines, Cuba and the Philippines have the lowest costs due to the reasons previously mentioned. The average cost of transporting sugar from Philippine ports to the United States was 0.39 cents per pound which was much higher than Cuba and -Porto Rico and slightlv more than that of Hawaii in 1929-52 (Table 37). due to the fac 57. average Cost of Transportation and Total Delivered Cost Including Interest. 1929-32.(1) Country Philippines Hawaii, Puerto Rico Louisiana Cane United States beet Cuba (1) : Average cost of Tr ans p or ta tion (cents per pound) 0.39 0.31 0.27 0.15 0.50 0.132 : Total delivered cost : including interest (cents per pound) 2.72 3.29 3.23 1 •£ ^h * ii /Io 1.923 U. S Tariff Co mission r.eoort tc the Preside Report he. 73, 2nd Series, 1934, p. 56,. that Cuba and Porte Rico are closer tc hew York (approximately 1400 statute miles) while the Philippines has tc bring her sugar 124 to Dew York at a distance of 14,533 (statute) miles. Cuba has a much lower total delivered cost (1,923 cents per pound) than any ether country competing in the United States market. The total delivered costs for Fhiliooine sugar was also quite * Jm O -L low amounting to 2,72 cents per pound in 1929-32. Differential Advantage of Philippine over Cuban Sugar in United States T.iarket. termine th e The method of computation used to de­ tariff advantage of Philippine sugar over that of Cuba is noted below. (2 ) The American Tariff raised the price of Philippine sugar delivered at Dew York city,. 10.5 per cent in 1919, 206 per cent in 1932 and 154 per cent in 1933 (Table 38, Fig. 19). In spite of Cuban sugar having an advantage over Philip­ pine sugar In lower transportation costs to the United States ports, Philippine sugar had a differential advantage over Cuban sugar of 0.67 cents per pound in 1919 and 1.85 cents in -1933 as a result of the tariff on Cuban sugar. In 1920 when the tariff rate was one cent per pound on Cuban sugar and the freight rate was 0.43 cents In favor cf Cuban sugar, Philippine sugar had an advantage of only 0.57 cents per pound, or 4.7 per cent cf the price cf Cuban sugar (11.95 cents per pound) delivered at Dew York. During 192; CO TTJ The 'forId Aimanac and Book of Fa ct s, 19 3V ^ hf • 1wo • (a) Secure the c. and f. cr ic (2) Yethod of Cal culat ion: York of Cuban 96° centrifugal sugar ( ccl . 1) and t:he f if ic ra te cf'nr A" ljj on Cuban sugar ( co 1. 2 ): (b) add Lm. are c. and f . pr ic e Dew York to that cf the.specif ic of -duty tc ge t the average c. and f. dut y paid orI ce 9 rate ^c^ • 4 ) York (col. 3) ; (c) Subtract the fr e i f. duty paid pr ic York ( cc1. • ± v t e Dew the a v 3 rage c ~ r Cuban price dvt (ccl. 5); (a 0 paid eaua 1 s the a v erage " 1 5 . I D C * ^ su obtain the ay erage net advantage cf the tha t cf Cuba, subtract the avera ge c. and f. price Iethe average Cuban pr ic e cu ty paid (col • _u ) from (ccl • - 1 d“ b-, •f' ge ad valorem ecriva lent adv V' y- o avera (e) The pine ov er Cuban sugar is secured by div iding the n et 125 -p 0 > •H •P a} d u$ Pi fi O O d C O d d rH rH O P> A c ts m -P d a> o 0 T a r iff S ta te s U n ite d 4-3 i-D •rl -P r* ^ ' Is H3 d C 3* ID H-3 C D -P Pi -P d Pi d a d D O 3 •H O C 1 Pi 8 P. t» i— d •H i..' •H X D C D -p C d Si 1 0) d • r— 1 *H aj 8 rH t +> P •H •H •H d d -P ’.'-j d 3 d d P ► > •3 -P Vl C D d r— 1 d o d O C D d o A d C £] Rj d «H *— i o H o -P n> tjD d C m C D > d •H •rH o f" ■ " O 01 d ■d cS u r{ •H d -P d OCD • rp d d o Pi — U 0'- C D — Pi H3 k .—' d C D • o to ra r— ( r~i A S P d 5 -P O ,j d rd d "t •15 d C D •H ctf d p d rd B Pi rH •H d —• 1 O > 1— r j •H o -— —* rd o co d 43 1 —. ij c) • D .5 C 'v.) -r3 d d r"*H A += 01 •H •H < D 61 < dD •r! • m rd •p P d d C D o o Pi * to 01 ft •l— 1 O, <3 .H d o A (■> • P O ru •H o Cj n tj 'O 6• PA o p • • • • • • • • • • • • • • • O co IV i— M I CO CO cd* CO C M si* co IV Ol CD C CO o co IV rH rH CD rH CD o CO i— 1CO CO 00 •:o iA ,Q • > >1 £;" r (!) 0) r".*d > 0 AO under Sugar Cuba over ft A c.) d 01 5 p rH o o . d C D ■ ’S ai M 4o • d P ** •H rfrH i— i 01 d *H > C D 1 d C D r— 54 d 03 cj rH 0) d d •rH < — I O :i ai Vi fit Cd —. Vl V* •H o ■o' o o LO IV C Oo C O tO CD si* to in CD O O O O • • • • • • ■ • • • • • • • • o sjl o IV o IV o i— 1 in Si* 00 00 CO CO si* rH M cn o in tn to CO cO in CO IV C M rH rH rH C CP to o Ci uo Ol o IV si* CO CD CO cn si* in i ti — 1C 1 i— l rH rH i— M rH rH rH i— C M rH rH 1 • • • • • • • • » • • « • d C D Pi d C D Pi • •d C OP -p d rj o C D Pi o -• • to CO to i— 1 tn si* C V- CO m M 00 tO IP CO o in CO 00 IV i— 11 — 1 CO o in C 1V o M i— • • • • • • • • • • • • • • • e'­ C M M in cO m si* sd*

< d Pi C D & > C D < d C D Pi —. (Q « +3 • P 'd C D P o p O Pi i in o o O o en CO r-O o CO to C M in o i— to cn o to Ol CO IP tn C OC M V si* cn Ol C M • • • • • • • • • • • • • • • iv cv* to Si* CO m si* si* si* si* tn m m C M in rH CP «— 01 • -p •d p d C D d o o "•* Pi N d C D Pi C D • •P rd p d C D d O 0 •— Pi -— - d i— 1 C D Pi o o o O CO co CO CO CO to CO o o o o o o CO CO IV IV IV C-- cv IV IV o o o o • • • • • • • • • • • » « • • 1 — 1 rH rH rH rH 1 I 1 — 1 i— ! 1 — I i— — f i— i C MC M MC MC O C O Vl C D Vi d •H *H d Pi oS Pi EH «H « •H co d fd • to 0 d +=» • •V si* Vi o o rH £ • 0 Pi •H t* © rH cn CD i— 1 0 •rH d 00 PO rH P O O d d d -p o d ci* O Pi . Pi Pi O cu d o •l-l -p d i— i d Pi Ol Vsi* 0 d 1 • -P d 03 •P d •H m -P P cd d rH •P P CO M 3 M IV CO CD si* m CD O o O o *o CO CO o C i m m o si* CD si* tn CD C M M i— CO a * ^ o C • • •■ • • • • V • • * • • • • 1 rH rH o rH co rH to to m si* C M tQ CM i— MC rH — 1C Ol O 1 M to si* in CO IV CO CD O MC 1 — 1C MC MC MC MC MC M cn MC M CM C Ol o> cn o> cn CD CD CD CD CD Ol CD 1 — 1 rH rH rH rH rH rH rH rH rH rH rH rH C M cn tn cn cn CD CD CD rH rH rH .126 when the impart duty on Cuban sugar was 1.76 cents per pound, the price advantage of the Philippine sugar ranged from 1.56 to 1.62 cents per pound more, or from 31 to 66 per cent higher than it would have been, had it not been for the tariff pro­ tection and transportation cost differentials. After the Tariff rate was increased to 2 cents per pound on Cuban sugar in 1930 and sugar prices continued to decline the percentage advantage of the tariff to Philippine sugar was increased. This is shown by the fact that in 1932 when the c. and f.(^) price at ITew York decreased to 0.S0 cents per pound and the tariff / duty cn Cuban sugar was 2.00 cents per' pound and when the com­ parative value of the Philippine sugar over that of Cuba was 2.76 cents, the price advantage of the Philippine sugar -was 206 per cent higher than that cf the Cuban sugar. The higher the tariff protection cn sugar in the Contin-* ental United States and the Insular Possessions the greater has been the tariff advantage of the Philippine sugar industry over that of Cuba in the American market. The lower the c. and f. orice cf sugar in New York the greater has been the relative advantage received by the Philippine sugar producers. Philippine sugar producers are cf course, placed In an advantageous po­ sition when transportation rates between New York and the Philip­ pines are lower than the rates between New York and Cuba. (Continued from 124) (over Cuban sugar Ccl. 5) by the average c. and f. price New York (col. 1). (f) ghe comparative tariff advantage of the Philippine sugar export over that of Cuba Is fecund by multiplying the quantity of the Philip­ pine sugar exported into the United States annually by the net advantage over Cuban sugar (ccl. 6). (1) c. and f. price Is the ccst plus transportation expense. 127 The net value cf the United States Tariff duties (tariff advantage minus transportation disadvantage) of the Philippine over that cf Cuha was $45,679 in 1919 and $42,853,382 in 1933 (Table 38). The net value increased as the tariff duty on Cuban sugar was raised and as the Philippine sugar exports to American market were expanded. CHAP THE. VIII RECENT AMERICAN LEGISLATION AFFECTING THE PHILIP­ PINE SUGAR INDUSTRY The Costigan-Jones Sugar Stabilization Act of 1954. The rapid expansion cf sugar production in the Insular Possessions and the Continental United States; the accumulation of world sugar stocks during the latter part of the twenties; and the in­ ternational business depression resulted in extremely low sugar prices which brought economic disaster to sugar producers dur­ ing 1930-33. Three years after the Chadbcurne Plan was adopted by a group of foreign countries to reduce production and control exports, President Roosevelt' sent a special message to the United States Congress on February 8, 1934 asking for sugar legislation to remedy the situation in the United States, Cuba, and the Insular Possessions.'1"' President Roosevelt In his message to Congress stated: {tThe steadily increasing sugar production In the contin­ gent a1 United States and in the Insular Regions has created a price and marketing situation prejudicial to virtually every one interested. Farmers in many areas are threatened with low prices for their beets and cane and Cuban purchases of our goods have dwindled steadily as her shipments of sugar to this country have declined. I believed that v/e can increase the returns to cur own farmers, contributing to the economic rehabilitation cf Cuba, the Virgin Islands, and at*the same time prevent higher prices to cur.own consumers. The Agricultural .adjustment _-_ct should be amended to make sugar beets and sugar cane basic agricultural commodities. It then -will be possible to collect a processing tax on sugar, the proceeds cf which will be used to compensate farmers for holding their production to the quota level. A tax of less than one-half cent per pound would provide sufficient funds. Consumers need not and should not tear this tax. It is already within the executive power to reduce the sugar tariff bv an amount equal to the tax. In order to make certain that G American consumers shall not bear an increased price due to this tax, Congress should provide that the rate of the pro­ cessing tax shall In no event exceed the amount by which the tariff on sugar is reduced below the present rats of import. (l) Farr & Co., The Costigan-Jones Control Act, Manual of Su-ar Companies, New York, 1934, p. 9 a . ISO mv_ ^ duty • Secretary of to 1 iC 0 nse ref iner a , -L -*o * 's t o buy and sell 3 V gar from, the var i or go t ion which rec oat -- ^ ~ ^ •-> w v i . - ■ - . c*. s. c i tota 1 T~ ni. u O d ■_ 19.t P3 c on s ’ moticn, based upon aver.a no .nrV*ij, .-X. O /r. pas i J _i_ o 3 cf +■ 1/i.u. w o_ ; years, bib havinr the base ~er1 led J.j_ xibl e to a cer t X R pro due ing ar ci0 • Q V T*. n> u cs \j r ; 't '- j The American Congress followed the suggestions cf the President and on hay 9, 19.34 passed the Oostigan-Jones Sugar Control /-,ct, which became effective June 8, 1934. This measure amended the Agricultural Adjustment ,-.ct to include sugar as one of the basic commodities whose production could be controlled in the United States, Philippines, Hawaii, Porto Rico, and the Virgin Islands. It determined the quantity of raw sugar re­ quired foi* consumption in the United States for that calendar year (1934) as 6,476,000 .short tons. The Secretary of Agri­ culture was empowered to fix the quantity to be imported for consumption in the United States from the Philippines, Porto Rico, Hawaii, the Virgin Islands, and Cuba on the basis of the most representative 3-year average cf imports during the period of 1925 to 1933 inclusive. The quotas for Porto Rico, Cuba and the Philippines were determined from the average of Con­ tinental United States consumption of sugar for the years 1931 to 1933 and the quota for Hawaiian sugar was determined from the consumption for the years 1930-1932. The ‘1931 to 1933 basis for all areas would mean a larger reduction from the current level of production for Hawaii than for the Philippines and Forte Rico because of the heavy expansion of production 'in the latter countries during 1932-33. The Act also provides for a processing tax on sugar not to exceed the amount of the reduction in the duty on impprted 1-7! 96° sugar as of January 1, 1934. The oroceeds collected from this tax shall be held as a seo-rate fund j.n the ‘ Treasury cf the United States In the none cf the exporting areas, fc ha used for the benefit of a gr: 1ture or benefit oaywonts In reducing the acreage or reduction in the production for sale, or is to be spent for the expansion cf the markets and for re­ moving the surplus agricultural products in the areas concerned. The Secretary of agriculture is entitled to carry out these provisions with the approval of the President. Apnllcation of Act to Philippines. Under the Costigan- Jones Law (1934) the Philippine sugar quota to be imported 4s to the. United States amounted to 1,015,136 short tons (raw value excluding the quantity of refined sugar allowed) for 1934. This amount constituted nearly 16 per cent of the estimated total quota for consumption In the Tnited States In the same year (Table 39). This was 29 per cent more than the proportion imported from the Philippines during 1922-32, but S per cent less than in 1932. Cuba’s quota cf 1,901,752 short tons was 29.4 per cent of the total which was 35 per cent less than the proportion she contributed to the United States consumption dur­ ing 1922-32, but 5 per cent ".ere than in 1932. The sugar quotas for 'Hawaii and Porte Pico, which were less than for the Philip­ pines, were increased relative to the 19 22-32 proportion but were decreased relative to the exports for 1932. In Cuba the ownership of land under sugar production is confined to a few large proprietors having immense-, holdings. In fact large American companies owned over 50 per cent of the total capital investment and sugar, produced in recent years. In the Philippines the landholdings are restricted by law. Sugar 132 s— — —• I- — \j w w N.» i ^ v J 4 « { A • « -~g ^ undsr Coetigan-Jones _ct. (1) Sources of supply : Quota of United States : [short tons) con sump t ion : • 9 United States Con­ sume tion as fixed by 1934 law. S,47c,000 icmo 1922-32 per cent :per cent contribu­ :contributed : ted 100 100 : 1934 :per cent :contribu: ted 100 Domestic (United States) Be et-sugar pro due Ing 1,566,166 1S.0 21.0 Louisiana 2c Florida 261,034 2.6 2.7 4.03 Insular Possessions Philippines Hawaii Puerto Rico Virgin Islands 1,015,186 916,550 802,842 5,470 12.4 13.7 11.7 0.1 17.0 16.0 15.0 0.1 15.7 14.2 12.4 .08 Foreign Country Cuba 1,901,752 39.8 28.0 29.37 0.7 0.2 area Mis cells,neous (1) 24.3 Farr & Co., Manual of -Sugar Companies, Hew York, 1934, p. 93. is produced by several thousand farm r:. n!:e anota agree.sent of 1934 of nearly l,lCv>,C 00 tens (raw .•r'k 2*•rir.„C) Lndi cubes a lose cf a ~<~i't u0C,.000 tens or u-vr’el mill if.r dell^.r s (aoro:: x' : ly ';03,000,000) .rch: pelago* (1) for the great number cf sugar planters Many pec ole v/kc are employed *n the sugar Industry will be out of lobs and the decreasing .income cf the people In the Archipelago mill reduce their purchasing newer thus lower Ing the standard cf living. The Thill'onine Govern­ ment supported by a sales tax will lose a revenue of nearly $13,000,000 in the next three years. This lacking of adequate .resources of revenue will naturally reduce the financial aid given to furnish such essential services as police protection, public education, and public health. Although the ucstigan-Jones Lav; may be regarded as a dra tic measure as applied tc the Philippines, the _-.ct is net with out Its justification. The Philippine sugar producers have expanded their output In recent years while uuban production was being reduced. In addition, It should not be overlooked that the Insular prcdticers joined with the United States pro­ ducers Inr demanding higher duties on Cuban sugar leading to th passage cf the Sncct-Fawley _-ct which reacted adversely on the Cub an sug ar In du str y . The Cos tigan-Jon es Law was designed tc give greater aid' to the United States sunar producers, In spite cf the ccm- paratively disadvantageous position of the United- States in producing sugar shown by the fact that the coat cf production in th6 United States has been higher than either that of Cuba (1) R. R. Alunan and F. B. Hawes, The Case for Philippine Sugar, The Phil. Journal of Commerce, Vol. 3, 1^34, pp, 4,6,10,23. Gl- Lua G of tue riixiiy^j u'.u, J.:j "i^ap or C UC 41**3 in the J o m e r country received quotas of u.3 and 1.4 uer ca-1, more than their contributl-:** /*■1 t.. ^h- dr n --•s'-lc c .5 and 1.3 oar cant, 19 38 (Table 50). v m :o v» —T- ctival”, rh*r therm ore the >nn^f it thot the .-.r.iorioar. producers will have •;,her the bribed ttates con simp tier. '-ah ex­ ceed oho 1934 quofca, is that the ’'-ect t.nd c *?-.e onera of the United °tates will supply 30 per cent cf ouch excess and "i.on ccrer-pticn falls helow the quota, the reduction is tc he dls tributed among the producing countries cn the ha sis cf the proportions in the 1934 quota. Significance cf the net for Philippine Sugar Industry. After sugar was made a hasic agricultural commodity on June 8, 1924 subject tc regulation under the Agricultural adjustment Act, Secretary--fallace cf the Inited States Department of agriculture approved a program under which the planters of the Philippines are to he offered payments aggregating $14,000,000 for adjust­ ing their production of sugar for the two crops 1954-35 and 1935-36.( -1 -) This program also provides means for the Philippine (1) The payments for reducing cane product i o n arc on the basis of '”'15 to $18 per short ton of sugar. This applies to the difference hotweon- the amount of sugar alloted to producers for production from 1954-35 crop, and the amount of sugar they produced in 1933-34. ^enefit payments are tc be made to planters f . n three installments • ~ks first payment be made as soon as possible. It must equal one-third of the benefit payment• The second installment will be in an amount equal to one-half of the total benefit payment and be paid after it has proven that farmer has disposed of a reasonable por­ tion of this excess cane in the manner prescribed. The third installment or the balance of the benefit payment, will be paid when the planter has the. proof that he has complied with.all the terms of the contract. IT.?.U.A., Agricultural Administration Adjustment, Press Delease, 1085-35, Tov. 30, 1934, pp. 1-3. -35 sugnrindustry tc ccoD-:-rs t? with. tbs ; the necessarysugar 3 iju01 cent. The in is trot i:n funds for f Ir.^n oaymants to producers oarticinjt *.-.r in the ”1 - urogram ------.. - are •--- -zc 1;he processing taxes g:~ 1.kil Icwlum sugar collected to theUnited. :■Gabos. hn adjust nei plan for the Philippines is to rounce its 1954-55 cron which with­ out restriction world ho approximately 1,430,000 tens to 715,000 of v;hich 515,000 tens are for f u m s n t to the United States in 1955 and--100,000 tens are for the crop carry-over. The; agreement is applicable to the 1934-35 crop and to the subsequent crops which may be produced in the Philippines during the operation of the Agricultural Adjustment nct.(^) In order that' the Philippine sugar Industry may success­ fully cooperate with the United States Agricultural Adjustment Administration in carrying out this sugar program, the- Philip­ pine Legislature passed In 1934 the Sugar Limitation Law. The declared policy of the Legislature as set forth in this ^ct is as follows: "First, to limit the production of sugar cane and sugar In the Philippine Islands tc such an amount as would be sufficient to cover the quota allotment tc the Philippines under the United 5tabes laws and the needs of the local consumption, plus such reserves as may be determined from tiw’e tc time in accordance with-the previsions cf this Act. "Second, tc recognize the United States sugar authority in the Philippine Islands for the control and allotment cf sugar to be transported to, processed in, and marketed in continental United otates under the laws .of the United States seeking to effectuate the same, and to harmonize the laws cf the Philippine Islands with these, of -the United States in so far as they affect production, manufacture and marketing of sugar cane and sugar produced In the Philippine Islands. "Third, tc allot among mills and plantation owners the quantity of sugar whioh may be produced and marketed for direct consumption or held for reserve in the Philippine Islands, and, to make such allocation in such a way as to offset and ameliorate harships and inequalities that may result from allocations made under the laws of the United S t a t e s ." 13 6. The Secretary cf the T rdted States Department cf agri­ culture, ITonry .1 • .allace, has a ourcv-d the three acl:iinistrative ruling a under the rhil imp Ine sugar cane product 1 or. ad Iu s tw on t (1) contract. The first ru1 ’~ 3 states that two or core farmers ill the sane central district can sign a single-unit joint ccmoliance agreement and pool their product:' cn and aales of sugar cane within the total of their allotments or their own plan­ tations. This is designed to provide greater flexibility and to simplify compliance among-small producers. The second administrative ruling allows the Philippine sugar producers tc raise tobacco on the land taken out of sugar production with the provision that none of the tobacco so grown may enter the United States or its territories or possessions other than the Philippines. This ruling might have been more 'valuable to the Philippine sugar nlanters if instead of tobacco other alternative crops as coffee, cocoa, cinchona, pepper, and silk not now competing with the American products could be. grown. The ruling will only bring a mere complicated system of administration in '.vatching the movement of the. tobacco through Its channels of distrIbutIon. The third administrative order permits the sugar nlanters to sell the excess sugar cane in the Islands for direct consump­ tion in the form of sugar cane to be used in the area where grown. The amount of sugar cane being sold under this ruling is insignificant. The contracting millers, refiners, and handlers agreed, (1) A A A Press Release 1679-35, Liar. 4, 1S34, p. 1. 137 in cooperation with, the 3 riou.lt1 .m l ..cliu stwent A in In 1st na­ tion, not to ship any-sugar tc the TTnited States between Cot. IS, 1954 and Doc. 51, 1934, in order of 3 vger from tlio PLiliopines n d porta in the first part cf 1935. 02 *0 vent the accumulation ether u u c w i at Rnitcd States They agreed to abide by allotments to be cntablished, to mill and handle cane or sugar produced in accordance v;:fh the allotments, tc keeo uniform records, and to assist in the adniris tret ion cf the _*ct. The regulations refer only to refined and raw sugars, thus exclud­ ing refiner’s syrup, sugar mixture, sugar syrup, edible molasses, invert syrup and syrup of cane juice. (-1-) The Philippine Independence Legislation, 1955-54. The Hare-Hawe 3 -Cutting Act of 1933 provided for the independence cf the Philippines obligator1/ at the end of a transition period of ten years. This Act was rejected by the Philippine Legis­ lature because it did not provide adequate preparation for independence; quota and expert tax measures were not accompanied by new provisions for economic readjustments, and because the Philippine C-overnment felt the net would cripple the economic life cf the Archipelago. The licDuffie-Tyding’ 3 -Vet of 1934 passed subsequent to rejection of the Hare-TIawes-Cut ting .^ct provides for a trans­ ition period followed by complete independence for the Philip­ pines*^^ These Acts were the outcome of a Philippine desire (1) U.3.D.A., A.A.A. Hews Digest, Vol. 2, Ho. 9, Dec. 1, 1934 pp. 1-2. (2) Committee on Foreign Policy, Recommendations regarding the Future of the Philippines, Foreign Policy Association and the ’TorId Peace Foundation, Hew York, Reports, Ho. 2, Jan. 1934, pp. 3-4. (3) Statute of TJ. S. of America, 73rd congress, Part 1, Llarch 24, 1934, p. 456. 138 for political independence and a demand from the United States farmers for protection r.ga‘r st the j'hilinoina agricultural oredueto. ■^ 7 cLu.ffie-Tydings .ict provides for free trade relations be tv.*eon the United States and the h* lie pines during the trans­ ition period and for a 1 inita1 1 on of duty-free Philinoine ex­ ports to the United States. There shall be levied, collected, and paid the same rates of duty required by the laws of the United States to be levied, collected, and paid upon like arti­ cles imported from foreign countries. This provision also applies to refined sugar in excess of 50,000 long tons and on unrefined sugars In excess of 800,000 long tons entering the .United States ports from the Philippines. The amount of sugar from each mill which may be so exported shall be allocated each year between the mill and the planters on the basis of the sugar to which the mill and the planters are respectively en­ titled. The government of the Philippine Islands has passed recently the necessary laws for allocation of the sugar as pro- videa for in the Act. The LicLuffie-Tydings Act imposes limitations on duty-free Philipoine exports to the United States and requires the free admission of mnerican goods Into the .-.rchips la go during the transition period. The amount of free-duty Philippine sugar that may be exported to the United States during the transition period is much less than the amount allowed for Cuba, in spite of the fact that the former country is still under the American administration while Cuba is a foreign country. The iiOt vested treaty making powers in. the Philippine Government but limited by a similar control and supervision by i:S tne T.r>xted otates •^ ) The _.ct provides that after granting of independence to the Is?_and3^shall be levied, collected, and p? id rpcn all articles coming intc the United states frr:.: the -rchipelago, the cane duty collected cn similar ce-o'-cdities from foreign countries. There is a proviso that at least one year prior to the date fined in this ..ct for the independence of the Philippines a conference shall he held "by the reoresentof the ^cvernuents or the purpose cf cf the un gted States r-v-r1 -m-. fcrmulet *u'' r e c o m m e n d s it ions r Thiliprwv*^^(i 'U future trade relations between the toe countries. The limited power given to the Philippine Commonwealth to make treaty arrangements with foreign countries together with the failure of the "'chuffie-Tydings -ct to define the future status of the Philippine trade with that of the United States when complete independence will have been granted and /n j the proportional export taxes' A 1 will discourage the exportation of Philippine sugar and other commodities to the United Statesduring the transition period. This will no doubt be injurious to the economic conditions of the archipelago, making the Pfcil(1) U.C. Congressional r'ecord, 7-3rd Congress, tart 5, Vol. 78, r >-n * O 1 ^1 .-.cIj. « rtf' ''lO'2 A pp —o X ^-V/. (2) The _-»ct includes provisions for the Ocwonwealth of the Philippr'nc Islands to impose and collect an expert tax on all duty free articles that nay be exported to the United. Ctates from the Philippines. During the transition period beginning with the sixth year after the inauguration of the new Gov­ ernment the export tax shall be five per cent of the rates of duty required by the laws of the "United States. This ex­ port tax'will increase to 10, 20, and 25 per cent respective­ ly, the seventh, eight, ninth and tenth year after the in­ auguration of the Commonwealth of the Philippines. The Ccmmonv/ealth Government of the Philippines shall place funds received from sue;: export taxes in a sinking .fund and such funds shall, along with other funds available for'that purpose, be applied solely to the payment of principal and^ interest on the bonded indebtedness of the Philippine Is­ lands, its provinces, municipalities and instrumentalities until such indebtedness has been fully discharged. Statutes of TJ-.3. of unerica, 7ord Congress, Part 1, Uar. 21, IS31, pp. ISS-luO• 14U ippir.es less ready for ,cc"y.)7.eto l^d >conlinee. mh g s o.-.llcv cf the American Cangresr is inc^mic-^-nt with the embodied in the- tariff rceipr. city x „ ”r3j proposed. by the hoes eve it .idrin i str a 11:.r.. The ascendb-g sou1-: cf export tux: j prc'Tiisu in the FoAuffie-Tydings ,.ct, without a3cured markets after ccmplete independence is net a feasible means of obtaining revenue for paying the bended indebtodness. In order to make the expert tax an effective measure cf raising revenue it m'vld be s. miss policy for the United Gtatss Government to let the Philippines gradually negotiate reciprocity treaties with .-siatic countries as well as with other foreign countries before obtaining complete independence, with the aim of finding markets for Philippine sugar and other commodities. This policy would also aid the development of the Philippine natural resources'. The possibility of sound economic trade relations between the two countries Is rather uncertain. The changing policies of the American Congress which depends entirely on. the political influence of "the members is a handicap to the future destiny of -the Filipino people. Experience has shown that an excessive tariff policy designed to prefect a few producers of .-.merican sugar and to raise revenue for the Federal Government has been destructive to the economic life of Cuba. It would be unfor­ tunate if such a policy should be allowed to develop with respect to the Philippine Islands. If independence of the Philippines is granted bocau.se the American Congress deems it just for the Filipino people to be Independent, then it must be accompanied by favorable trade policies that will aid the Philippines to attain the objective of economic Independence. oil - tie : i f Cl T 1CCII AC Crisis i, ?a .lt ir^ I:rA A'A-.A' 1FPUI'TLY ov/ Conf ron t in■ rnilinnin0 Suuar Industrv T During recent years the Philippine Islands h-s bocf me extremel. dependent upon the United dtates karket for her exports. The prin­ cipal factors accounting for the increased exoort of BhilSpnina pro­ ducts to the United States are: (1) The long period of free trade which has existed; (2) the high tariff on Cuban sugars since 1922. The extent of the Philippine dependence upon American markets is shown by the fact that 83..4 per cent of all Philippine exports and S9 per cent of the sugar exports went to the United States, in 1932. Under the Costigan-Jones Act, Philippine access tc the United States market has been suddenly curtailed, while legislation grantingjeyentual_ Independence, provides for still further contraction, not only for sugar but also for coconut oil and cordage during a -transitional period that exists prior to the attainment of complete independence. This sudden curtailment of Philippine exports has created a crisis in the Islands. Compensating cutlets for Philippine sugar must be found or the national economy of the Philippine Islands will have to be reconstructed. The United States must either permit reasonable admission of Philippine products or allow the Philippine Islands to negotiate commercial treaties with other countries. This chapter examines the possible lines of adjustment. The future of the sugar industry of the Philippines depends on the trading relationships which may be arranged with the countries requiring products that can he produced in the Philippines and with the countries exporting commodities needed for consumption in the Philippine Islands. The Philippines could profitably make reciprocal treaties with the United States, Japan, China, Australia, and possibly Great Britain. The Negotiation of a Long Time Reciprocity Treaty With the United States. In order to safeguard and to further develop the- commercial relations between the Philippines and the United States that have existed for many years, trade agreements between these two countries could be arranged on a long time plan. 1 92^ - 2 9 In the average annual value of the Philippine exports to the United States constituted 7^ per cent of the total exports, while the average annual value of the Philippine imports from the United States amounted to 60 per cent of the total imports of the Islands (table ^0). S 3 and These proportions were increased to per cent, respectively, in 1 9 3 1“32 showing that the trade with the United States represented an even larger proportion of imports and exports of the Islands in this period. Production of sugar and alternative products in the Archipelago could expand if trade agreements were reached by these two countries so that the Islands could produce more sugar and other products where-in the Philippines have a comparative advantage while the United States could supply more meat and dairy products, thus reducing the amount of these products imported by the Philippines from China, Australia and Switzerland (tables ^1 and Jfc2). The United States could produce more cotton goods for sale to the / Philippines, reducing the Philippine imports from China "and 00 to x TO TO fe *OH pTHO H rH i -4 O £ S3 -a to ■p u o o fl OON-OOOlOCUOOtOOOOH t'TOO©CO®*IOfflfflU)(T'iWWOt• • • • • • • • • • a * . . . g W O ® « W O O H O WHHCV to O 8• OS CO O CM rH CV O O CM Tfffi^ooaoo «woowHwcv . to o W C iH T fH O O O O O O ^ Trade CD CO O O S O O N H H WHtOHO^i O Oi w rl ffi o O Foreign • • to o W CO N H ^ to o r) O O O to H to W O O O CM •TO* to• 05 si 05 -p © rH 3 Philippine Table 40* & o • o» O CO cm os to to to » ito o• o• to o O cm TO rH •H TO TO £3 'to I TO TO 43 TO u 0 3TO > o• o• O• O•O • C M to *4* 8*“ 0 \A 02 "t* • • to cm to rH t CM H * 43 TO TO O P TO pH OS CM 05 rH 4 CM 05 rH TO p TO 0 Ih TO T TO h r~ 0 3 r~ 3 TO •p O 3 t •0 > lu •P O O• o o 8 8 S 8 8 S S 8 ^ • W H U J to W K W e-- rH o c m o o o o o o # * * • * • • • ^tONC^CDtOtOtO to e- 00 rH 1 to © o (4 © *4 o TO TO 14 4, CM • m to TO OS M rlj4 3 fH •H P to •H M •H CO ■P o §•§> 3 o II h i g o w ►» P OO TO TO (X a o •TO a $ s* « Ho. 9, 1986; « Ho.10, 1927} Ho. 11, 1928; Ho.IP, 1929; (Printed 1930) Collector of Customs, 1953, pr. 14-15 'T H w O K) CV (O » * it « « « " " n f t « n n n it n « h « it w itu n i t « * n « *1 u * n i t Philippine Bureau of Customs, Annual Report of the Insular CO KS (»tQOM|C |>(ntC O H U H |filON01 • • • • • • ■ • • • • • • • a MlOOOlKWOHWOri^HHP- £ ■o -P _ •ggjUS to fi -TOCQ o P £ £ © © On O 01 to oo cc CV2 8 s to c CO to 04 H 8 o OS p 8 8 P4 O to to Table 41. Sources of Philippine Imports 1952 (1) h £ 0) IS p £ £ (D CD 04 O O I—I 01 04 o £ £ •H 8 h £ © © 04 O I a* *8 p •H 1=5 P P O £ 0) © 00 00 os (0* co 8 CO to cv 8 •d* Q1 os to 1 0 OS us 02 (4 © C © ft O & & 14.79 05 t- +5 P © c© M a o H ft © SO © p ©H •P 9 p< 'o © © •£H* P © •a © P © o o 'O © rH •H ©© XI P u ° *1 G S | ■O a -p 3 p »§ -3 'p P © o O © p o a pj5 S H S m © © p O © n3 1© O P rH © o © P P P P) © © a C ft B O P PJ © © H ft s ft 3 rH •H •EH if w e per cent o 05 to 00 02 U5 C" 05 US O TO § 52; h 8• rH 0.17 8 3 CD US ♦ to CM 35.42 ■TO s 43 TO TO43 TOTO 5h (j CO (TO per cent £ to us . to CM CO ■TO 0>• tc» TO per per cent cent o a to IO 05 to * to TO US 8 cm t- • to 05 o t- oo to 00 e* • O H 1.46 H H CO . TO 1.44 >"3 s♦ per cent § per cent 00 TO of 00 rH 3 TO TO Collector to per cent TO O TO TO to ID CO 0 p * TO M TO a 0TO oo TO 8 I S X! 05 TO t- to 8 CV2 to CO CO p TO ,0 • TO TO a § TO bf rz u o 4 Philippine •TO US (1) 59.54 TO i u TO Copra Tobacco I 05 Cocoanut Oil 86*66 S>t Io t 00 00 • 50.6 8 •TO TO per cent Table 4&T Destination of Philippine (1952) Exports. TO H o to TO of the Insular .5 C\2 to to o Report TO TO O

pP* 90-91. National Industrial Conference Boardi Trends in the Foreign Trade of the United States, New York, 1930, pP. 253-259. of this disadvantageous situation of the American sugar planters in producing sugar, the amendment to the Agricultural Adjustment Act has given encouragement to additional production in the United States by alloting 30 cent of any excess above the quota set for United States consumption, to American Producers. American sugar production has only survived because of high tariff protection since 1922 and recently because of benefit payments paid from the processing tax on sugar. Both of these methods of aiding the sugar industry of the United States is burden on consumers since the result is to raise the price of sugar, A reciprocity treaty should be concluded between the Philippines and the United States for a period of twenty or more years in which both governments should impose moderate tariff duties upon commodities from the other, following a transition period of at least two years. Certain quotas for leading products in both countries might be imposed as on sugar (provided in Costigan-Jones Sugar Control Act), coconut products, Manila, hemp, maguey, t.obacco, etc., from the Philippines while those from the United States are wheat flour, meat and dairy products, cotton, mineral oils, automobiles, parts and tires, paper and manufactures, etc. conditions in the Islands stable. This would make business The American Congress should grant favorable terms of trade which will tend to keep the export of Philippine products steady in the American market. Any step to diminish the import of sugar and other commodities from the Islands by the United States will decrease also the American exports to the Philippines because the Archipelago can import some of these American commodities from other countries. In the long run tendency, imports must be paid by exports, a simple fact of foreign trade, which was over looked by the United States Cpngress when they enacted legislation designed to bar Philippine sugar from American markets. Alternative Outlets in Other Countries. There would be some alternative markets for Philippine sugar in the Orient if reciprocity treaties could be concluded between the Philippines and some Asiatic countries. The leading Asiatic importers of sugar are British India, China, and Japan which have been importing most of their sugars from the Dutch East Indies. about 32 percent of the average of 920,370 Java supplied short tons (l) imported by British India during 1926-29 and over 99 P® r cent of the average of about 800,000 short tons during 1930-32, in spite of the fact that India has been one of the great sugar producing countries of the world. China obtained 3^ P®r cent of her annual imports of 827, short tons of sugar in 1926-29 from Java, and (6 3 9 , 3 8 0 short tons) in 1930-32. 32 per cent The Philippines supplied only 3.2 per cent of the total Chinese imports in 1926-29, and per cent in 1930-31. sugar in 1 9 3 2 700 0.8 China stopped the importation of Philippine . Most of the sugar imported by Japan has come from Formosa. The Japanese sugar imports were used chiefly for confectionery products and other sweets for export. Japan received 88 per cent of her annual sugar imports of ^11,79^ short to&siin 1 926 -2 9 , and 93 per cent of her total imports of 1930-31 from Java. 1 77,568 in The Philippines supplied only 1,8 per cent TIT ®I S.D. A. Yearbook, 1 9 3 0 , p. 7 0 2 , Ibid, 193^, Pp. W-O-4-81 of the total Japanese imports in 1926-29. Since 1930 Japan has imported no Philippine sugar. The Philippines might also sell part of her sugar production to Australia and New Zealand if preferential agreements could be adopted between these countries, which would encourage the ing production of goods in the country haver\a comparative advantage. The market has been better in British India, China and Japan for Javan sugar, than for sugar from the Philippines or Cuba, due to the great influence of the British, Chinese and Japanese sugar producers in Java who were also exporters to the above countries. Another advantage of Javan producers has been their lower costs of production compared with the Philippines. The United Kingdom has been the most important market for Cane Sugar among the European importers of sugar, as the other countries have imported sugar from the beet-surplus areas of Europe. Of the average imports of 2,030,030 short tons into the United Kingdom in 1926-29, 10,576 tons came from Java and 7^6,13^ from Cuba. During 1930-32 the sugar exports of Cuba and Java to the United Kingdom amounted to an average of 773 and 178,9^5 short tons, eonstitutuing respectively, of the total imports of this period, 2 3*05 and 7.8 6 9 8 , per cent, ,2 8 5 , 7 6 6 bhort tons during (l) Great BritAin imported an average of only 18,830 short tons from the Philippines in 1900-09. average of 21,303 during 1910-17. This had increased to an Since 1917 imports of Philippine sugar were discontinued. (l)U.S.D.A. Yearbook, 1930, p.702; Ibid, 193^, Pp. 1*40-481; Dr, 0. C. Stine, U.S.D.A. , Bu. of Agr, Econ., 1931! (arranged). Philippine sugar has not been able to compete with sugar from Java and Cuba in the British market for several reasons; first, because some of the principal English importers have had capital invested in Java and Cuba; second, because the sugar industry of Cuba and Java has had technical sales organizations with, selling agencies in the large sugar marketing centers of the world; and, third, because of the low cost of producing Cuban and Javan sugar. If perferential treaties could be concluded with some of these leading markets there would be a possibility of creating new markets for Philippine sugar outside the United States, prior to the attainment of oomplete Philippine Independence. Possibilities of Increasing Domestic Consumption of sugar in Philippines. There is also some possibility of increasing the domestic sale of sugar in the Philippines because the per capita consumption of sugar in the Archipelago is still quite low. A comparison of per capita consumption in sugar in various countries shows that the Philippine ranked 26th in 1932 among 51 countries studied (table *&). 1930-32 the Philippine per capita consumption of sugar of pounds was 1^, 11, and 31 In 35 pounds, respectively, more than in Java, Japan and China. The people of Oriental countries such as the Philippines, China and Japan have low consumption of sugar due partly to the effect of the climate, but mainly to the fact that the people are not in the habit of utilizing sugar in preparing their food. \ ' The use of sugar with 'Coffee, tea, and cocoa as well as in making pastries, ice cream, soft drinks and for preservation of farm Table 43. The Three Groups pe^\ Capita Consumption in the 7/orld. (1923-24, 1927-23 average) (raw basis) High consumption ; Medium consumption ; Low consumption dountries Pounds Countries Pounds (Countries Pounds per per per _____________capita________________capita______________ capita Australia United States Denmark Great Britain New Zealand Canada Cuba Switzerland Sweden (1) 129.0 Argentina Netherlands 112.2 Austria 111.0 Czecho­ slovakia 91.0 Belgium 90.2 Brazil 90.0 France 89.0 Germany 83.4 80.0 68 65 oO 59 54 50 49.3 47.0 Mexico Philippines Spain Hungary Poland Italy Peru Russia Japan Java China C.J. Robertson; Consumption Trends and Problems, Facts about Sugar. (International Institute of Agriculture, Rome), Vol. 27, no. 9, September 1932, pp. 377-379. 26.0 25.4 25.0 23.3 23.0 19.4 18.3 14.1 13.2 12.1 5.0 Table 44. Per Capita Consumption of Sugar in . Various Countries, 1930-1932.'*^ (raw basis) High consumption ; : Medium consumption : now consumption Countries Pounds Countries Pounds Pounds Countries per per per capita capita capita Hawaii 191.3 Denmark 113.0 Australia 112.0 United States 109.0 New Zealand 107.2 Canada 96 •0 96.0 Switzerland Great Britain 92.0 Sweden 91.2 Cuba 89.9 (1) 74.3 Holland 71.0 Puerto Rico 70.3 Norway 70.1 Argentina o7 .2 Austria Belgium 61.2 Czecho­ slovakia oO.O 59.5 Chile Finland 58.0 56.0 France 54.2 Ge rmany British South 50. o Africa 50.0 Latvia Malay States 47.03 45.0 Uruguay 44.5 Brazil Algiers, Morocco & 40.2 Tunis Philippines British West Indies Central America Egypt Syria and Palestine Spain Hungary Mexico British India Poland Greece Portugal Japan and Formosa Java Peru Persia Italy Russia Jugo-Slavia Siam Rumania Turkey San Domingo China 35.0 35.0 31.0 28.6 27.3 27.2 27.04 2o.4 2o.0 25.6 24.4 24.32 24.3 21.2 21.0 20.0 19.3 19.3 16.0 14.0 12.2 12.0 o •0 4.3 A. A. Roberts, The American Sugar Refining Company; 1934. (arranged) products for home use or for exports could be increased by demonstrating the uses of sugar to the people. The low real income of the people in the Orient is another factor that explains partly the slightly low consumption of sugar in Asiatic countries. That it may be possible in the future to increase the sale of Philippine sugar in domestic and other Oriental markets is indicated bynthe fact that the per capita consumption in the Philippines has increased from an average of 1927-23, to 35 pounds in 1930-32. (Tables 4 3 2 5 -^). consumption also increased from an average of 2 ^, 1 9 2 7 - 2 S to 2^.3 pounds in 1 9 3 0 -3 2 ,^ pounds in 1 923 - 2 ^, Japan-Formosa*s 13*2 pounds in 1923 - . Cl). Possibilities of Developing Alternative Exports. The Philippine Government, because of the present limitation of sugar production and exportation, should aid the. sugar industry by developing alternative exports. The chief Philippine exports at present are sugar, coconut products, Manila hemp, maguey, tobacco, and lumber. The products most needed by the Philippines are cottong goods, meat, dairy products, wheat flour, silk, automobiles, electrical equipment, and miscellaneous manufactures. The best places for the Philippines to ttotain cotton goods are the United States, Great Britain and Japan. The United States, Australia and Canada can supply wheat flour to the Archipelago at low prices. Meat and dairy products can best be supplied by \ the Uhited States, Australia, New Zealand and Canada, Silk and manufactures can be imported from Japan, China, and the United States (l) C. J. Robertson, Consumption Trends and Problems, Facts about Sugar, Int. Inst, of A g r . , Rome, Vol. 27 > No’ i 9, Sept. 1 9 3 2 Pp. 377-379. at much lower prices than from other countries of the 7/orld. The United States, Japan, China, and Germany can supply paper and manufactures to meet the needs of the Filipinos. The sugar producers in the Philippines should produce other agricultural commodities that do not compete with the American products in the domestic market. These tropical agricultural products must not he bulky and must be able to stand the long ocean journey, and at the same time have relatively high unit value as coffee, cocoa, tea, silk, rubber and cinchona. These commodities can be sent free of duty to the United States. Coffee was imported by the United States to the total amount of #302,000,000, in 1929 from Brazil, Columbia, Venezuela, Guatemala, Mexico, the East Indies and the Netherlands, (l) The United States imports of cocoa was #^9>000,000, in 1939* secured from British West Africa, Brazil, Dominican Republic, Ecuador, Trinidad, Tabago and Venezuela. inports of tea amounted to $ 2 6 ,0 0 0 The United States ,0 0 0 ^ in 1 9 2 9 , coming from Great Britain (re-export); Ceylon (and other British East Indies) and Brazil, to the total value among the Agricultural products imported amounting to $^27,000,000. The United States imported silk from Japan, China, Hongkong and Italy. The United States (l) Robert Aura Smith, UacLe Preference Sought by Leaders in Philippines. The New York Times, Sept. 23, 193^, PP« 1-2. in the same year imported from the Dutch East Indies at monopoly prices, Cinchora hark costing $552*525*00 and $1,297,353* worth of Quinine salts. The bought pepper from the Dutch East Indies United States and British India costing $7,807,^2*5, in 1929. All of these imports of tropical products of the United States could be grown in the Philippines in large amounts. The production of coffee in 1912 in the Philippines was only S6 Metric tons having a total value of $3^>379* tort 1932 production was increased to 1,090 Metric tons with a total value of $317,790. While Cacao, in 1912, amounted to 7^ Metric tons having a total value of #33,^07*, production expanded to 1025 Metric tons in 1932 #ith a total value of $^5 5 ,265.(1 ) The production -of tea and silk has not been commercially developed in the Islands, Tea has been growing wild in the Philippines for years, while Mulberry trees were growing vigorously on the campus of the College of Agriculture, University of the Philippines when the writer was a student there several years ago. Government aid to producers will be necessary to stimulate the cultivation of these plants in large quantities. The Philippine Government should give encouragement and assistance to her infant industries. This can be done by research and demonstration work as has been applied to the principal industries of the Philippines by the different departments-,'of the Insular Government. The infant industries must be subsidized until they reach a stage of development that will enable them to compete with other producing countries. Possibly the funds created from the processing tax provided for in the CostiganJones Act might be used as a subsidy to encourage the develop­ ment of alternative products. Possibilities"pf Beclprocal. Agreements'/with Foreign' Countries. Alternative Outlets or Alternative Exoorts. Preferential trade agreements might be made between the Philippines and V Japan. Japan will need sugar and other Philippine products for her expanding population. The sugar industry in Formosa can not expand very much because the rest of the area is devoted to the production of other products, especially ricd. Although the sugar industry of Formosa has received aid from the Japanese Government, the cost of production is much higher than that of either the Philippines or Java. Japan could import more sugar from the Archipelago in exchange for Philippine imports of cotton, paper, silk, iron, steel and manufactures which will naturally decrease the Island*s imports of these commodities from other countries. Silk and manufactures can be supplied by Japan at low prices because the cost of produc­ tion is low, causing the Philippines to reduce her imports of them from Great Britain, the United States and China. Japan could also supply electrical machinery and appliances causing the Philippines to reduce her imports of them from China, A reciprocity agreement could well be extended to China by the Philippine Government. China can produce more silk and manufactures and cotton goods because she is very well suited to the production of these commodities. The Philippines could import more of these goods from China and reduce her imports from Japan and France. The Philippines can produce commodities needed by China as sugar, lumber, cordage, coconut oil, etc. at a comparative advantage. The Philippines might sign' a reciprocity treaty with Australia as the latter country is producing meat and dairy products and wheat flour under advantageous conditions because the soil, climate and labor are well adapted to these products. Australia could import sugar, Manila hemp and such products from the Archipelago wherein the Filipinos enjoy a comparative advantage in production. A preferential treaty might be arranged between the Philippines and Great Britain. The United Kingdom, once the world’s leading lenders of capital, might offer credit which could be repaid in sugar, Manila hemp, lumber, coconut oil and tobacco leaf. The United Kingdom was once a greater importer of Philippine sugar (Chapter I). She could advantageously reduce sugar production since her costs of production have been much higher than that of the Archipelago. The Islands can advantageously buy cotton, iron, steel aanufactures, electrical machinery, apparatus and appliances from the United Kingdom. 153 C O N C L U S I O N S This study of the sugar industry of the Philippines, its relation to producers in competing countries and the effect of recent United States Congressional Legislation upon the industry indicates that there is probably no single solution to the problem now facing the sugar industry in the Archipelago* That the industry faces a crisis is apparent, to surmount this crisis will probably require a combination of different methods* Three possibilities suggest themselvest (l) curtailment of production of those commodities subject to export quotas; (2 ) producing other products to replace those whose production has been curtailed; (3 ) reciprocity treaties made with the United States and other countries in order to find outlets for Philippine products. The limitation of sugar imports to the United States market and the difficulties involved in finding alternative markets to replace the American market indicates that there must be a reduction in the amount of sugar produced in the Islands* To avoid a resultant decline in National Income will require the development of substitute products that can advantageously be produced both for home consumption and for export. Several sugar planters in the sugar producing districts of the Philippines have atarted to diversify and practice crop rotation. The growing of cash and food crops and the practice 154 of crop rotation if widely adopted will greatly benefit trie sugar planters of the Islands provided proper organization and administration of agricultural production is inaugurated* Diversified agriculture would aid sugar planters by reducing the risks of total failure* The producer is so dependent on factors beyond his control; weather, insects, plant diseases as well as prices that production of sugar alone entails a high degree of risk. A sugar producer must pay his living expenses, labor, taxes, interest and other operating costs. A crop failure when sugar is the only crop raised is a serious problem. Diversification in the Philippines through producing other agricultural products would result in advantages to the economic life of the Filipino people. It should raise the standard of living in the agricultural population because diversification provides a form of insurance against heavy losses caused by crop failure or lost markets. Consequently, farm income, wages and employment would be more stable. The larger quantity of production which would result from the fact that the laborers on the (sugar) plantations would be kept busy for a longer period of time through­ out the year should increase the buying power of the Filipino people thus creating a greater demand for manufactured commodities. The administrative ruling approved by Secretary Wallace of the United States Department of Agriculture permitting Filippino sugar planters to grow tobacco is not the best method of helping the Philippine farmers (Discussed in Chapter VIII). This is because Philippine tobacco is already competing with American tobacco. Only if markets outside of the United States can be ■“ found for Philippine, will this ruling be of aid to the Filipinos \ '' 155 The better solution would be to encourage Philippine planters to produce such commodities as cinchona, coffee, tea, rubber, tropical fruits and silk, that do not compete directly with products produced in the United States, In addition to the adoption of a more diversified economy fostered by the Philippine Government, attempts should be made to modify the restrictions placed upon Philippine exports by the McDuffie-Tydings Act of 193^. As a result of the free trade relations that has been « existing between the United States and the Philippines, the Filipinos have become almost completely dependent upon the American market as an outlet for her products. Consequently, the United States is under some moral obligationsto agree to a program that will not be too drastic in its effect upon the economic life of the Filipino people. In 1933 the Archipelago ranked ni^th in importance, as a buyer of American products. The limited quota for Philippine sugar and other products that may enter the United States during the transition period, prior to complete independence, along with the export tax placed on the export of the Philippine products to the United States will force a curtailment of Philippine purchases of American goods. The exchange of goods that has taken place between these countries has been mutually beneficial and if the above facts are kept in mind it would seem that a modified trade agreement might be enacted that could be advantageous to both parties. Unless the United States is willing to deal reasonably with the Philippines during the transition period prior to 156 the granting of independence, the Archipelago will naturally feel justified in placing high tariff duties on American products subsequent to the attainment of complete indepen­ dence. Not only should the United States agree to a modi­ fication of the present drastic legislation which will prove so disastrous to the Archipelago but they should also allow the Philippines to arrange reciprocity treaties with other countries. The Philippine? Government could greatly aid in surmounting the present difficulties by negotiating reciprocal treaties with Japan, China, Australia, New Zealand and Great Britain, thus giving the Philippines a wider market for her exports, which would result in a more stable internal economy for the Archipelago* A P P E N D I C E S Appendix A Public Revenue from Sugar Industry in 1 9 3 1 . ^ Classes of taxes Sales, manufactures* and income taxes Land and property taxes Tlharfage taxes, tonnage dues, and import duties on supplies purchased by the industry Excise taxes on distilled soirits from molasses sold and on gasoline, oil, etc. purchased by the industry Miscellaneous license taxes Total taxes paid by the sugar industry (1) (2) : Dollars 2,239,384 1,323,669 . 2,646,991 3,197,975 827,800 10,235,819 Rafael R. Alunan, Now, The Past, Present and Future of Philippine Sugar Industry, Vol. 18, No. 49, Oct. 15, 1932, p. 13. This fevenue represented 0.046 cents 4 pound on total production, 0,05 cents per pound on exports or $6.82 per capita for the people engaged in the industry. 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P P - * ••*H bi) © O O P © » bD A © © Wrt M^ © t©|*H g ,0 A rH A P © © © £r-i £ i$ h C U W O S3 $ cn P ® 3 » • © Pi © bD A O •rt g & S " © rH £ 3 cr1 •H © A A A © -aJ cn & O A — * OCO ■A— ' A « "HS 5r=i 1 'NS © |H © IH © * rH © © COM o Oh A A © O A>r 3 .o © _ O rH © XJ X P A - © O © t > > 0 Eh 3 H© © © « O bD _© O '© © © © w w A cno A ffi E l r1 S3 > o® > CM CO C D o -t-> P to o o> -o, H +> ft © •rt p p p o O © © ■p C O C M CO C M r H i H l O t O C O C > - f H t O e - O O C O O > 0 > « —I W t O cO i S a > o o « > r - < c o c n c o c r > < o c D o O c o c ^ c >- c O i o I O C M C O £ O H * l > i n c r > 0 5 0 i C M O tP C M t O C M C - C O to to O O CO C M C» C*. • ^ © © C O H r l f f l C O H H< H ert H* C M 4* o- co -m* in •m* m cm o O O O O O O O O O O O O O O O i O O O H O O O O O O O O O l O O O O l O O C - O O C O in •H re b © © •w n•• o• •« • co to o> o- co flk * m to H m ov to » A cO •M4 CO CO CO 00 to CO O o co H CO lO C^cOtO^O^'OHttOlOCOlOOOCMHt-XtO-MtCO O«h in rH H H H M l O W W W H H H in is -«* m H4 o> cm • H H «» co O O O H o rH o o o h in cO 00co in CO H C M m to CM 1,128,546 P< I ■P CM 50,842 to C O -P <7> P H • • r©e Vi •rt OH re © © -p -P -p re © ra © O © s o> o» H CM MtfltO^TjtintDOOOtOOOOOOHH H o>o>o>a>o>o>o>CT>CT>ocr>CT>oja>o>o>o> H i H H r l H H r t r l r l H r l r t r t r l H r t H © © © © Ol H 4 O* 0» 0> CM CM CM CM CM r H H H H n H H H H H W O l W O I C ' I W S I rH H rH rH rH O © P cd o © d d > © • © HP o © »P © ra © cq re re m h pq P O P t W h © Grand © d © lo 'J Appendix C Exporters of Philippine Sugar, 1917-27.t1 ) Shippers Asturias Sugar Central Bank of the Philippine Islands Calamba Sugar Estate Chinese Campania G-eneraral de Tabacos de Filipinas and Bais Hijos de I. de la Rama Ser & Company Ledesma Lizarrage Hermanos & Kabankalan Sugar Company Macleod & Company Mindoro Sugar Company North Negros Sugar Company and Victorias Milling Company Pampanga Sugar Mills Pampanga Sugar Planters Association (A. B. Honorio) Pacific Commercial Company Philippine Sugar Central Agency, Philippine National Bank Quarter Master Department, U. S. A. 0. Ranft Salvador Serra Smith, Bell & Company W. F. Stevenson & Company San Carlos Milling Company Viegelman & Company Vda. de P. P. Roxas Earner, Barnes & Company Welch-Fairchild & Company, HawaiianPhilippine Company Ynchausti & Company and La Carlota Various Total (1) Total :No. of exports :years :opera:Nationality: 1917-27 (long tons):tion : Average : exports : 1917-27 :(lon£ tons) Spanish Filipino American Chinese 5,750 11,200 115,686 630,998 Spanish Filipino British Filipino 443,117 10,362 28,818 3,478 Spanish British American 30,326 1,441 2,050 4 1 1 7,582 1,441 2,050 Filipino American 143,773 148,005 8 6 17,972 24,668 Filipino American 13,581 114,153 1 10 13,581 11,415 Filipino American British Spanish British British American German Filipino British 611,832 14,466 .13,691 3,872 136,025 121,858 77,114 4,474 2,487 498,068 7 3 2 1 11 11 10 2 1 11 87,405 4,822 6,846 3,872 12,366 11,078 7,711 2,237 2,487 45,279 American Spanish 157,149 88,200 102,968 11 3 14,286 29,400 10,297 2 ,534,942 1 1 6 10 11 3 9 1 5,750 11,200 19,281 63,100 40,283 3,454 3,202 3,478 321,358 Facts and Statistics about the Philippine Sugar Industry, 192S, table 10. EXPORTS OF SUGAR FROM THE PHILIPPINE ISLANDS Year Total to All Countries Metric tons (2204.6 lbs.) Average 1860-69 n n n 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1870-79 1880-89 1890-99 57,343 108,176 181,655 192,351 65,191 56,873 98,596 85,308 87,053 108,499 129,454 127,917 144,735 129,328 121,472 209,044 197.076 157,334 236,498 211,013 337,490 205,908 273,258 136,060 180,541 289,876 362,072 271,983 357,830 546,832 411,232 553,324 569,938 695,868 743,980 752,932 1,016,568 Total to United States Metric tons (2204.6 lbs.) 12,720 43,298 104,617 32,384 2,153 5,226 5,120 29,315 25,898 43,592 11,858 10,989 46,707 53,073 100,700 187,659 133,879 30,717 169,530 82,841 131,885 62,378 106,181 32,159 123,937 150,479 244,852 230,555 300,867 463,989 341,306 508,317 534,229 670,953 737,195 752,284 1,016,266 Per cent to U.S. 22.1 40.0 57.5 16.8 4.0 10.0 5.0 34.1 28.1 41.4 9.3 8.0 35.0 47.2 85.0 91.0 71.4 20.0 74.0 45.0 45.0 44.0 52.4 25.0 77.0 58.0 70.0 87.0 89.0 89.0 88.0 94.0 95.1 98.0 99.6 99.9 09.9 Philippine Bureau of Commerce and Industry, Statistical Bulletin No. 5, 1920 Annual Report of the Insular Collector of Customs, Manila, 1932 Appendix E Comparative International Exports of Sugar (Computed from Yearbooks of TJ. S. Dept, of Agriculture, and monthly summaries of Foreign Commerce) Year Philippines Short tons ,1904 1905 1906 1907 1908 1909 1910 1911 1912 1915 1914 1915 1916 1917 1918 1919 1920 1921 1922 1925 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 95,959 119,598 142,697 141,003 159,541 142,558 133,898 230,039 217,238 123,429 260,690 232,599 372,000 226,970 301,213 149,971 198,789 319,530 399,112 299,807 394,436 602,773 453,301 453,501 628,242 767,055 820,089 829,957 1,120,572 1,150,000 Cuba Dutch East Indies Short tons Short tons 1,229,583 1,206,458 1,321,850 1,455,219 995,509 1,603,525 1,952,871 1,596,275 2,128,525 2,738,450 2,787,341 2,865,999 3,282,242 3,220,859 3,646,958 4,497,887 3,492,623 3,205,265 5,581,371 3,818,889 4,379,014 5,435,097 5,227,219 4,645,002 4,389,253 5,543,887 3,598,333 2,997,603 2,959,775 2,735,308 1,159,122 1,157,328 1,098,604 1,316,112 1,411,847 1,386,964 1,312,899 1,476,150 1,471,109 1,411,650 1,456,317 1,329,235 1,595,611 1,305,464 1,412,556 1,697,652 1,669,534 1,848,708 1,582,691 2,104,473 2,070,679 2,279,229 1,914,463 2,202,130 2,827,302 2,680,686 2,468,948 1,739,182 1,668,463 1,269,145 Hawaii Puerto Pico Short tons Short tons 370,434 421,677 585,120 468,274 538,785 541,712 585,297 540,099 602,733 567,342 571,631 640,342 598,045 663,139 540,454 607,797 528,012 540,201 595,812 597,539 585,694 712,854 876,388 712,057 823,793 887,061 839,017 928,449 1,016,077 2,075,000 129,647 135,663 205,277 204,079 244,257 284,522 322,919 367,145 382,700 320,633 320,633 294,475 424,955 488,943 336,788 351,910 419,388 409,407 469,889 355,423 372,041 571,559 578,811 574,689 605,620 471,269 721,217 806,825 912,169 1,525,000 “J ~ O I ' ■, KJ \ /J. I unit (1 ) ‘ SIX 9 o^rm vern m ent a 1 _;u o11 ca ttons Acts ai' 0 r ngr e s s; "Act to revise and amend the tariff lav-’s of the Philippine Archipelago," 57th Cong., 1st sess.,. Public ho. 28, ch. 140, 1902. "Act to raise revenue for the Philippine Islands and for other purposes," 61st Cong., 1st sess., Public ho. 7, ch. 8, 1909. "An Act allowing free entry of Philippine sugar after May 1, 1915, 64th Cong., 1st sess., Public ho. SI, ch. 93, 19IS. "Act to enable the oeoole of the Philippine Is­ lands to adopt a constitution and form a government for the Philippine Islands, to provide for the inde­ pendence of the same, and for other purposes," 72nd Cong., 2nd sess., Public 311, ch. 11, Jan. 17, 1933. (Kare-Kawe3-Cutting Act.) "A Proclamation by President of the United States in decreasing rates of duty o n sugar, to equalize differences in costs of oroduction, ITo. 2085, May 9, 1934. "Act to amend the Tariff Act of 1930 with powers conferred on President for expanding foreign markets for United States products, 73rd Cong., 2nd sess., Public ho. 316, ch. 474, June 12, 1934. "An Act to provide for the complete Independence of the Philippine Islands, to provide for the adoption of a constitution and a form of government of the Philippine Island and for other purposes," 73rd Congress 2nd sess., Public ho. 127, 1934. (2) Government Documents and Reports United States Uo n aressl onal..P.e cor d . 73rd Congress V. 78, Jan. 4, 1934, "Fhilhopine Independence." 73rd Congress, 2nd sess., Senate Doc. 70, ?!"Torld Trade Barriers In Relation to American .Agriculture," 1933. U. S. Dept, of A g r i c v h t u r e - Agricultural Adjustment .Administration. Press Releases and hews Digest on Sugar Quotas and Adjust­ ment, 1934. - Bureau of Agricultural Uconomics. Poreign and Agricultural Service. - United States agricultural Tradewiththe Philip­ pine. P. S. 38, 1920. - Agricultural Price-Supporting Measures in Poreign Countries, F. S. 56, 1932. - Foreign Crops and Markets (weeklyissues), 19311934. - Yearbook of _-.griculture, (annual), Sugar Statis­ tics, 1901-1933. -L O - u • C • hept • of Ofrv"ltroo ”uog u ~± of foreign and Demostic Co.n'--:rc6. - Fhi? ii-oi’oe fr ^ d r in,'v'nJo - .-.-rd h:chanme, Th D-pt. of rioronoroo, 'rads Inf'i Iu? •. 40, July 122". - Res cur con ar.:Z Bra dm of fro i-Rill opine a, TJ. C. r,u. of aVrc'fT1 - .1r.d De. retro 0err.oroc, dul. v c • --10, 1926. - Special Clrc1*’*nr "o. 273 ill'' refoponce tc or"o sugar statistics, l-v. 1, 1334. Cor.irr.orcG Reports. - Reports ors Foreign .u.rkets for agricultural pro­ duct a, ITo. 16, July 10, 1212. - No. 2 2 Aug. 21, 1219. U . 3. T"ar D ep ar tn en t - Prief Beaune of the Rules and RegvBU-. t ions Relating to the Disposition of futile Tand in the Phil. Islands, 1934. - United 51a te a-Phi1in n in e tariff and Trade Relations; Report Ho. IB, 1931. - Statistics on Sugar, May 1933. - Report tc the President on Sugar, No. 73, 2nd series, 1934. II Publications of Government of Philippine Islands. "^j. Statisti'caT Reports. Bur eau of1 AgficuTture and Commerce St at ilft leal M andb'o'ciT' of’the Philippine Islands, -First Number, 1932. Bureau of Census Census of the Philippine Island, 7. 4, 1213 Bureau of Commerce Commercial Handbook of the Phil. Island, 1934 Bureau of Commerce and Industry St'atis’ti'o'al 'Bulletms" of "the Phil. Islands, ITo. 1, 191S; to. 2, 1919; ITo. 3, 1921; Ho. 7, 1924; Ho. 12, 1929. Bureau of Customs AnnuaT Report of the Insular Collector of Customs, 1933. Department of 'Agriculture and Natural Resources; Annual Report, Dec. 31, 1933. Report of the Philippine Commission, V. 4, 1900. (£). Signed Bulletins and Contributions Asuncion, Silvestre, The Growing of Sugar Cane in the Philippines, Bu. of Agr., Manila, cir. No. 167, 1985 Fairchild., George II., Comparative Statement of Hxports of Sugar from Philippine Ports, Yearbook of the Philippine Islands, 1920. Forbes, C. V:., Worcester, D. C. and Carpenter, F. The Friar-land Inquiry, Philippine Government, Manila, 1910. Hines, Cleve r., Cane Production and Sugar Manufacture in the Fh i1ippin e la?and e, Bur. of Agr., Manila, Bui. No. 33, 1919. ri ’1 v'!. “• c* _ . * X ^ i r■ >“ 7 C‘ ----------^---- . v w ... -* •i y .-} J~ — -*• ••*J P . f\ ' 1 i" » * - •»i — y, . - . li . s- u ^ . _ • j 'V '* ft « « ,-j' % . f\ Pi .. t -1 . . ^■M J—*7 ^ A . . * V *. j L - J- A » \ / -A■ - ' i » i'-f. iJ ^ : -1■ »i • X-*. - '. V- A „ -. -.- AT - ■- A t • -r ^ ..; v^s»-*.t u j. T v - - •- ,, •- v , a. -f- Xa J ^ . "I ...0 jy'---•_»- •• V A -I*' * "1 * »,-••-*».»» * X .. . _i_. __L^J !.l J.. : ..* _s ___ . y y; ' ■^ Jt —_._. J '-* ** •? ? L nJ■* t-*-i O >Jii.1j RT .„»T„ O-k* i ‘- y X rfa,\J rn X X t’t*j ■...in-, . ^ _.i— ; 1 X vj.no x 'il.j.nuc, ;u. of o: , hi. O >u .: y iivi ^ U ~ i> ^ .j ' J y, r- 'J AT x »-> ^ ^ ' “ . .-,-. ,1 " . ,- , i - O ... O'■-- jr., ;A nil a , 1912. _. ii h" n j. a.J <-*j. i — .. . J uu w---. X 1‘mi „ ‘s^. . LA r..r ■. j ..U .'S r .L _i J.U. S 1 U V o l u ii0 Philippine Is?-...'ids, Manila, 1212 Ill Books and Pamnhlcts Bills, Lippert C., The Tariff on Sugar, The Rawleigh Foundation, Freeport, 111., 19 3c. Ellsworth, John Crval, (Unpublished Thesis) Sugar .Marketing, Cornell University, 1926. Farr Co. 'Manual of Sugar. Companies, Hen’ York, 1934. Handbook of the Philippine Sugar Industry, Sugar Novas Co., Manila, 1929. Jenks, L. II., Cur Cuban Colony, Vanguard Press, New York, Mar. 1328. National Industrial Conference Board, Trends in the Foreign Trade of United States,. New York, 1930. Philippine Sugar Association, Fac.ts and Statistics about the Philippine Sugar Industry, Sugar News Co., Manila, 1928. Pratt, Hdward Ewing, International Trade in Staple commodities, McGraw-Hill Book Co., New York, 1928 Schultz, Henry, Statistical Laws of Demand and Supply with special Application to Sugar, University of Chicago Press, Chicago, 1924. Taussig, F. V?«, Some Aspects of the Tariff Questions, Cambridge, Mass., Harvard University Press, 1931. Timoshenko, Vladimir P., world Agriculture and the Depression, Michigan Business Study, V. 5., Univer­ sity of Michigan, 19 33. 7/illiams, .Benjamin H., Hconomics Foreign Policy of the United States, 'McGraw-Hill Book Co., New York 1928 s P/inkler, Max, Investment of United States Capital in Latin America, 1928 P/right, Philip Green, Sugar in Relation fo the Tariff, McGraw-Hill Book Co., Hew York, 1924. Hright, Philip Green, The Cuban Situation and Our Treaty Relations, "Fashington, D. 0., The Brookings Institution, 1931. IV Periodical Articles and Miscellaneous. Sugar Trade Journals , Sugar Central & Planters Hews Manila International Sugar Journal , Manchester Sugar Hews , Manila Facts About- Sugar , New York City Lamb orn & Co., New York Millet & Gray, Statistical Dept. New York Alunan, R. Pi., "The Past, Present and Future of the Philippine Sugar Industry," How, The New Independent Meekly, Manila, V. 18, Mo, 49, Cct. 15, 1932. Alunan, p. and Hawes, P. P. "The Case of Philippine 165 Sugar," The Philippine Journal of Commerce, Dept, of Agr. and Con., l.ianila> V. 10, ?:c. 3, 1934. American Sugar Defining Co. .-nnval Deport, Ten York, 1933 Bakst, Bari D., "Shall Our Tariff and Colonial Policy Permit the Duplication of the Dugan .-ofin or i os Already Built cn the lain land,n The m o - l c a n :u'u.r Defining Go., *”evv York, 1933. Foreign Policy Association and the "‘orId Peace Foundation, scomnendations Regarding the Future of the Philippines" ty the Committee, Rev; York, Jan. 1934. Cnrubia, L. D., Sugar Centrals and rlanters Dens, V. 6, Do. 1, Jan. 1925. Heberts on, C. -J., "Consumption Trends and Problems," Facts about Sugar, 7. £7, Do. 3, Sept. 19 52. Smith, Dchert Aura, "Trade Deference Sought by Leaders in the Philippines," Feu York Timas, Sept. 23,.1934. Correspondence Balmaceda, Cornelio, Assistant Director of the Philippine Bureau of Connorce and Industry, Danila, 1934. Hudson, Joel C., American Consul, Surabaya, Java, June 1, 1934 Roberts, A. A., President The American Sugar Refining Coinpar.il, Hew York, 1934.Stine, 0. C., Chief, Historical and Statistical. Division, Bu, of Agr. He enemies U,S.B.A., 1934.