Rice is the staple food of the people; while a large quantity is raised, much is imported. The value of the imports of rice in 1915 was $6,724,270. In former times the Philippines exported rice and may do so again when agricultural development has become more advanced.

General McIntyre, Chief of the Bureau of Insular Affairs, in reporting to the Secretary of War in regard to a trip of inspection made in 1915, makes the following remarks in regard to agricultural conditions:

"As agriculture is almost the exclusive source of weath in the islands, one must understand that without development in agriculture it is idle to anticipate more than spasmodic development in industrial or commercial lines. Unfortunately the agricultural development has been slow. In the production of rice and sugar we have never exceeded the most prosperous years of Spanish control of the islands, and many of the provinces bear evidence today of not being so productive as they have been in years prior to the insurrection in the Philippines. In other words, these provinces have never recovered."

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"Filipino labor must in its great part be employed in agriculture. Unfortunately, this seems the point at which the Filipino laborer is weakest. This is witnessed by the general condition of agriculture in the islands, and is the general complaint of landowners and those who employ labor directly or who have Filipino tenants. There seems no doubt that this is due mainly to inherited conditions and to the unsatisfactory relation of agricultural employers and landowners to their laborers and tenants. It is observed that in such properties as the San Carlos Milling Company and the Calamba Estates Company there is little or no trouble with labor. The trouble seems to be where the old conditions continue and these are the general conditions, such estates as those mentioned being exceptional.

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"It seems clear that to stimulate agriculture in the Philippine Islands it is necessary to bring about a more satisfactory condition of the laborer; that is, the laborer must perform more work and he must perform it in the belief that he is going to be benefited by it. It is not easy to change the customs of ages, and it is not desirable to make revolutionary changes. It is probable that if there were scattered throughout the islands, as there might well be, large estates under modern management, the conditions would be corrected thereby, and possibly it is the only way in which they could be corrected; but it would seem to be the duty of the agricul

tural bureau of the Philippines and of the labor bureau to investigate carefully conditions of the employment of agricultural labor and to suggest a gradual modification of existing conditions, so as to induce the laborer to work more and the employer to give him a larger benefit from the product of his labor."'

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The total value of the principal crops in 1914 was $89,819,835.

Next to the agricultural products, the fishing industry is of the greatest importance in the Philippines. The catch is largely for local consumption. Pearl industries are proving to be important and profitable.

The principal manufactures are cigars and cigarettes; of the former 243,134,000 were made in 1914 and 155,000,000 exported, while in 1915 184,308,000 were made and 70,662,000 exported; of the latter 4,411,923,000 were made in 1914 and 3,859,607,000 in 1915, of which the bulk was consumed locally, although the exports were increasing.

The decrease in the cigar trade in 1915 is attributed chiefly to the falling off of the trade with Europe and Australia, because of the war.

Following is a comparative statement of the value of exports and imports of the Philippines for 1905 and for the seven years from 1909 to 1915, inclusive:

IMPORTS INTO THE PHILIPPINE ISLANDS

In 1915 the total foreign trade of the Philippine Islands was $103,125,188. Of the imports, 53.49% came from the United States, while 43.95% of their exports were sent to this country.

In the calendar year 1915 the United States imported goods from the Philippines valued at $23,653,211. These were mostly crude materials for manufacturers. In the same period exports from the United States to the Philippines amounted to $26,381,069. Almost 78% of these exports were fully manufactured goods, and another 18% partly manufactured.

In the three years preceding the acquisition of the Islands our trade with them averaged $4,546,649 imports and $130,530 exports, a total of $4,677,179 compared with $50,034,280 trade between the United States and the Islands in 1915.

Total exports and imports of the United States with the Philippines compare with our trade with Russia

(European) and Austria-Hungary for a series of years

In 1915 the Philippine trade was $49,239,514, Russian $127,096,000 and Austro-Hungarian $5,429,000.

Between 1906 and 1913, the last year of normal business before the breaking out of the great war, trade between the United States and the Philippines increased nearly 170%, with Russia in Europe about 50%, and Austria-Hungary about 43%. Some Russian commerce was through the intermediary of Germany and does not show in the figures of direct trade.

It will be seen that the trade of the United States with the Philippines has steadily increased until the Islands have become one of the best customers of the country. It is important to note that trade is reciprocal, the exports and imports between the States and the Islands tending almost to balance.

Taking 1913 as a normal year, before the world's trade had become disarranged by the European conflict, it is interesting to note that the exports of the United States in that year to the Philippine Islands somewhat exceeded the exports to China and Russia. They exceeded by 79% the exports to British India. They exceeded the exports to Austria-Hungary, to Sweden and

*Discrepancies between the figures in this and the previous tables are probably due to different methods of compiling statistics in Washington and in Manila.

Norway, and to Denmark. Put in another way, the exports of the United States to China were in 1913 only 82 cents a head of the population of China, to India only 5 cents a head, to Russia only 20 cents a head, to Austria-Hungary only 45 cents a head; while to the Philippines they were $3.20 a head and tending to increase. The business between the United States and the Islands was in 1915 up to that time the greatest in history.

The present indications, however, are that the trade of 1916 will be still greater as, for the nine months of the year so far reported, the total trade between the States and the Islands aggregated $42,465,000 in 1916 compared with $39,785,000 for the corresponding months of 1915. In 1916 the exports from the United States to the Islands were $16,821,000 while the imports were $25,644,000; almost reversing the figures for the nine months of 1915, when the exports were $21,420,000 and the imports were $18,365,000.

With the growth of population in the Philippines there is every reason to expect that with the continuance of American control, which for moral and humanitarian reasons would seem to be wise and right, the trade of the Islands would come to be of ever-increasing importance to the United States.

GOVERNMENTAL ACTIVITIES

The government of the Philippine Islands is necessarily of a so-called "paternal" character.

Through the central government the provinces and cities are financed, that is to the extent that they need to borrow money to carry out plans for development.

Matters of sanitation, education, transportation, roads, maintenance of order, are all to a great degree controlled from Manila.