The Commission will, of course, when it comes to enact its penal code, provide by proper law adequate punishment for fraudulent packing of hemp or of any other article of commerce, and this it seems to me is all that is required. I therefore respectfully recommend that the Commission refrain from legislating on the subject, leaving buyer and seller as at present a free hand in regulating their own affairs. Very respectfully, The Honorable PHILIPPINE COMMISSION. LUKE E. WRIGHT, Secretary of Commerce and Police. EXHIBIT K. PETITION OF AGRICULTURAL SOCIETY OF PANAY AND NEGROS FOR ABOLITION OF DUTY ON PHILIPPINE SUGAR. MANILA, December 18, 1903. SIR: The undersigned, in the name of the Agricultural Society of Panay and Negros, have the honor to appeal to you soliciting that you be pleased to lend your effective support to the petition formulated by that entity that the customs duty on Philippine sugar entering the ports of the sovereign country be abolished as the only measure that can save agriculture from the ruin to which it is doomed. At one time agriculture in the Visayan region was the most flourishing in the archipelago, but many disappointments have contributed to its impoverishment to the extent that the planter is now compelled to sell his products at a price lower than the cost of production, as we shall demonstrate. During normal times in order to produce fifty piculs of superior assorted sugar the following expenditures would be required: Cost of plowing, cultivating, manufacture and transportation to the port of Iloilo Interest on $150 at 20 per cent per annnm Total.... $150.00 30.00 180.00 Superior assorted sugar sells in the Iloilo market to-day at $4.37 the picul, making a total for our 50 piculs of $218.75. At first sight it would appear that the planter makes a profit of $38.75 on each 50 piculs, but if the interest on the capital invested is added to the expenses mentioned as well as wear and tear on the machinery, etc., it will be seen that the planters, far from reaping a profit, suffer a not inconsiderable loss. As a matter of fact, the following should be added to the expenses already mentioned: Interest at 20 per cent per annum on the capital employed per hectare necessary to produce 50 piculs of sugar, calculated at $100... $20.00 Interest at 20 per cent per annum on cost of two carabaos to produce that amount of sugar.. 40.00 Interest on capital invested in machinery, agricultural implements, etc., and buildings, proportionately to the 50 piculs . 20.00 80.00 At first glance the interest allowed for capital appears excessive, but if the present condition of the Iloilo money market is considered, the rate given will be found to be the lowest. It is true that some merchants in the said market charge from 12 per cent to 13 per cent annually, but at the same time they bind the planter to the following conditions: (a) To the payment of a commission of from 2 to 24 per cent. (b) To buy all material necessary for packing the sugar ready for market from them. (c) To use the ships of the merchant and money lender for the transportation of his sugar. (d) To sell the sugar to the merchant advancing the money. WAR 1903-VOL 5-23 353 (e) To pay a fine of 1 peso per picul of sugar that the planter fails to deliver; so that any planter who, for example, has agreed to deliver 4,000 piculs of sugar in consideration of a loan of $4,000 and through circumstances beyond his control, such as fire in his cane fields, losses through the ravages of locusts, etc., is unable to gather more than 3,000 piculs would be bound to the payment of $1,000 as a fine for such shortage in delivery, aside from having to comply with all of the other conditions of the contract. As there is not a place in any town in the archipelago where the polarization of sugar can be determined, it is classified by the buyer often unjustly and to the detriment of the planter, who, being financially unable to raise his crop, can much less assert his rights and make them prevail before the proper authorities. For all of these reasons the planter nearly always prefers to pay 20 per cent interest rather than to submit to the harsh conditions laid down by the merchant who, though he charges not more than 12 per cent or 13 per cent, is really the one who offers the least advantages, because in the end the planter would pay an interest on the money borrowed of not less than from 40 per cent to 50 per cent. It is seen, therefore, that agriculture, at least in the Visayan region, is day by day approaching ruin, and it is only the support of the government by abolishing the Dingley tariff on Philippine sugar that can save it. The planters ask for the abolishment of the said tariff not only in order that the Philippine sugar may find a market in the United States, but also to compel the Japanese market to pay just prices for our sugars. According to statistics, 1,332,892 piculs of Philippine sugar were consumed last year by Japan and China, but in spite of this consumption native sugar did not bring a good price, for the simple reason that Japanese merchants, knowing that there are no competitive buyers, have been able to purchase our sugar at the lowest possible price. The day that the Dingley tariff on Philippine sugar would be abolished, Japanese merchants would have to pay at least the same price that it brought in the United States. Perhaps people will not be wanting who will object to this proposition on the grounds that during the past rule the Philippines had no market of its own for its products, and yet this did not result in the decadence of agriculture. Anticipating this objection, we would say that since American occupation there has been a radical change in the markets of the Archipelago, in that prices of articles brought from foreign countries have increased twofold, and in some instances a hundredfold, while on the other hand native products have remained stationary as regards price. The rise in price of imported articles, specially of rice, has been accompanied by many other evils that have placed the planter in an embarrassing position. Among the latter we might mention the rinderpest, the locusts, the plague, lack of capital, and brigandage, which is the necessary consequence of every revolution. To approach the subject in a different light, we would state that if the markets of the sovereign country have been thrown wide open to Hawaiian sugar, we believe that this boon ought to with more reason be granted to Philippine sugar. As a matter of fact, the methods employed in the Philippines in working the cane are primitive and defective to a degree that the planter is able to obtain less saccharine juice than in other places where more perfect machinery and a more scientific method of cultivation and sugar making are employed. This consideration would of itself be sufficient to demonstrate that the Philippines need the protection of the Government more than Hawaii; but there are other factors that must not be lost sight of, such as the distance of these islands from America, that means increased expenses for freight, marine insurance, exchange, commissions, etc. On account of these factors it is more than probable that our sugar, even if the Dingley tariff is abolished, could never compete with that of Hawaii, Cuba, or Porto Rico, and much less with that of America. It is unnecessary for us to dwell upon the great and favorable effect which the abolition of the Dingley tariff would have with relation to the present political status of this country, for fortunately we address an authority who has had the singular privilege, accorded only to men of peculiarly great genius, to know to perfection the conditions of the archipelago and the aspirations and needs of its inhabitants. Very respectfully, The Honorable the CIVIL GOVERNOR OF THE PHILIPPINES. J. DE LEON. EXHIBIT L. STATEMENT OF COLONEL COLTON, COLLECTOR OF CUSTOMS AT ILOILO, AS TO NECESSITY FOR REMOVAL OF DUTY FROM PHILIPPINE SUGAR. Sugar was first introduced into the Philippine Islands in 1856. Experiments in cultivation were conducted during the same year in the vicinity of Talisay. The first official record as to the results of the experiments is the exportation through Iloilo Harbor in the year 1859, of 5,427 tons of raw sugar. Exportations gradually increased until 1899. The exportations in 1869 amounted to 7,344 tons; in 1879, to 47,625 tons; in 1889, to 112,007 tons; in 1899, to 154,462 tons. The largest exportation was in 1892, when 165,897 tons were exported. Since 1898, owing to the disturbed conditions, the loss of animals, and the lack of capital, production and exportation have been greatly reduced, dropping during the year 1901 to 34,500 tons. In the early years of sugar production only wooden rolling mills worked by cattle were used. This was a slow process, resulting in the loss of 40 to 50 per cent of the sugar. Few of these mills are still in use, but most of the sugar now produced is by the use of steam mills, extracting from 34 to 74 tons of juice per day with a loss of from 20 to 40 per cent. The sugar produced is classified as follows: No. 1, containing 88 per cent saccharine; No. 2, 85 per cent; No. 3, 81 per cent, and damp, 70 per cent. The proportion of the different grades produced is about as follows: No. 1, one-fourth; No. 2, three-sixteenths; No. 3, and damp, nine-sixteenths. Sugar polarizing as high as 92 per cent is produced by old wooden mills in some localities of Panay. The expense makes a large percentage of loss. Under ordinary circumstances Negros should produce 150,000 tons and Panay 50,000 tons of sugar annually on land now under cultivation. Men of long experience in the business assert, that, with suitable machinery, transportation facilities, and capital, the production could be doubled without extending the area under cultivation. A conservative estimate of the land suitable for sugar production in Panay and Negros, which is not now cultivated, is 90 per cent in the former island and 70 per cent in the latter island. The uncultivated land in Panay is principally in the interior. At present there is no means of transportation. Negros sugar is brought to market by lighter from the estates of the owners from 5 to 14 miles in the interior, depending solely on the condition of the roads, which are generally bad. The actual cost of producing and marketing, at Iloilo, sugar, per ton, under existing conditions, is approximately as follows: Tilling and planting, $22; cutting, carrying to mill, per ton, milling, bagging, and shipping, $18; lighterage and delivery, $6; total, about $56, Mexican. These figures exclude material items, like interest on investment, taxes, or rents. It is hard to estimate the present selling price of sugar in the Iloilo market, which is based on the price in foreign markets, and is about $64, Mexican, per ton, which is not above the cost of production in the most favorably located estates, and is considerably less than the cost of production in estates in the interior. Since the American occupation, the quantities in pounds and value of sugar exported through Iloilo for the fiscal years are as follows: At first glance, it seems from the returns of 1903 that sugar planters are subject to congratulations upon the substantial increase both upon price and quantity of their product and apparently improved conditions. As a matter of fact, owing to the increased cost of labor and extraordinary expenditure for animals to replace those killed by rinderpest, they are more deeply in debt at the close of the 1903 season than at any previous time. Had it not been for the low ruling rate of exchange enabling buyers to pay more in Mexican currency on practically the same gold range prices as last year, a large percentage of the planters would have been entirely ruined and compelled to abandon their estates. The planters have been steadily losing ground since 1899, and have only been encouraged to continue the operation of the estates by hope each year that the product would be admitted to the markets of the United States at a much more favorable rate of duty if not free. The statistical records of the custom-house show 71,000,000 pounds of sugar exported last year in vessels clearing for the United States. The vessels, however, actually cleared for the Delaware Breakwater "for orders," and a very small proportion of the sugar was shipped into the United States, the larger portion being carried to Canada or England, and all sugar entering the United States, except one cargo entering free, resulted in a heavy loss to the shippers. The islands of Panay and Negros are thickly populated, and the inhabitants and business interests depend directly or indirectly upon sugar industry for support at this time in exceedingly precarious condition, and unless something is done by Congress to relieve the situation feel sure that it is no exagger-. ation to say that it must collapse resulting in great distress to the native inhabitants and producing a chaotic condition in business, increase ladronism, and spirit of insurrection. In view of present serious conditions almost certain ruin of the industry in the islands in the absence of speedy relief. The matter would seem worthy of early consideration and more liberal treatment at the hands of the home government. If the whole Philippine production of three or four hundred thousand tons were admitted free into the United States, it would only mean much less beet sugar imported from foreign countries and import duty might be collected thereon and fairly distributed as reward to industry in Philippines. This would stimulate revival of import trade here and create additional revenue for the insular treasury, increasing the importation of American goods into the Philippines. Congress could take no action which would have so salutary an effect among Filipinos or make them more contented and loyal than to give them the benefits of our markets upon proper basis and thereby the prosperity which they were led to expect under American Government. |