etc. From Russia and America, kerosene, and from the latter country also flour and tinned meats-as Spain exported formerly almost only preserved foods in tins-and wines. Within the last few years she has commenced to import into the Philippines other articles, to compete with the wares of other countries. The Spanish goods are in every way inferior to those of foreign manufacture, but on account of their being free from import duty the prices are considerably lower.

In the following table the exports during the last five years are given. The minor articles have been omitted:

X.-Principal exports from the Philippines from January 1 to December 31, 1896.

The exports from Manila alone, the most important place to be considered, were, during the past six years, as follows:

B.-Exports from Manila in the years 1892-1897.

In the June (1898) number of the National Geographic Magazine, called "the Philippine number," are some articles about the islands. Although for the most part interesting, especially for anthropologists, they are, in economic matters, inaccurate. None of the statistics are to be depended upon, for even at the commencement, in mentioning the trade of 1896, there is an error of about twenty-eight million dollars. In 1896 the export alone was $32,771,500. The figures given by me are correct, as, indeed, statistics can only be correct. The trade is indeed small, compared to what it should be; but amounts, such as are given to the author of the magazine article, were reached twenty-five years ago.

To give the statistics of the imports even only approximately correct is impossible, wherefore I have refrained altogether from giving detailed statistics in this regard. The author of the article referred to tabulates the American goods, among which wheaten flour in particular must strike the eye of anyone really knowing the conditions of the trade. He gives the value of the imports as lowest in 1893, with $7,800, and the highest in 1896, with $18,290, which figures are much too low. The value of the flour imported from America must be at least five or ten times as much.

The terms in the produce market in Manila are always cash down. In business with the provinces the Manila house has frequently to make advances, which certainly means risk; but if one is cautious with whom one deals the business is safe enough here also. It is always the main thing in the case of transmarine places just springing up to know the state of affairs precisely, and to be in a position to form a sound judg ment at a moment's notice. The business between the importers and the Chinese retail dealers is done either by means of acceptance (pagaré) at six months, or, as is more general of late, cash within four to six weeks, with 5 per cent discount. Unfortunately the four to six weeks are very often exceeded. Insolvencies frequently occur among the Chinese. The creditors usually prefer to come to an arrangement, for if once the matter comes before a Spanish court it is the invariable rule that the creditors get nothing at all.

Fines (multas), particularly in differences with the custom-house are imposed in a most annoying manner, on every possible occasion, since the officials receive a share of the fine imposed. A ship which, for instance, does not deliver precisely the number of bales in the manifest is fined for each bale more or less $100. In every bill of entry the weight must be stated beforehand, and if it is not correct a fine is inflicted. In this way there are a hundred kinds of chicanery practiced, all costing much unnecessary expenditure of money, the greater part of which goes into the pockets of the officials.

The tobacco monopoly, with all its heartless severity and imposts, was introduced in 1781 under the governor, Don José Vasco y Vargas, as the Government again found itself in a critical financial condition. The population guessed at what was coming and opposed the introduction, so that the law was only carried by force of arms. The law prescribed that every native might plant tobacco, but might only sell it to the Government. In the tobacco districts every native had to grow a certain number of plants and devote all his attention to them, without ever leaving them. The collecting of caterpillars was done by women and children, just as to-day.

This would, however, all have been well enough had the people been able to enjoy the fruits of their labor, but the worst has still to be said. The tobacco was sorted-"aforado," as it is technically called-and that

unfit for use burned so as to prevent fraud. The principal matter in sorting was the length-18 inches and over was primera class; 18 to 14 inches, secunda class; 14 to 10 inches, tercera class, and 10 to 7 inches, quarta class. Smaller but good leaves were sometimes classed as 5 and 6.

For valuing the tobacco the officials used a scale according to which the planter received some 20 to 30 per cent of the real value. But he was not paid in cash. He received a certificate, a kind of treasury bond. Had the people had security for the payment of these bonds at an early date, the latter would soon, no doubt, have come into currency as paper money. But, far from this being so, no one would have them, knowing that five or six years might pass before they were redeemed. The tobacco planters lived under more miserable conditions than the worstkept slaves, and were glad if some noble philanthropist, with an eye to usury, would give them half the value of their certificates. And such disgraceful usury it hardly was, for who could say whether the purchaser was not risking his 50 per cent? Frequently the bonds were practically given away. In the cigar manufactories in Manila 30,000 work people were employed, and were always paid in cash, so that their lot was more envious than that of the planters. That under this system, in spite of the enormous army of officials, a profit of four or five million dollars was annually yielded can be easily understood.

The savior of the unfortunate tobacco planter was one of those Spaniards in whom there was still the blood of the hidalgo the intendent-general, Don José Jimeno Agius. In his report in 1871 he relentlessly exposed the condition of affairs under the monopoly and strongly advised its abolition, unless the Government wished to destroy tobacco planting altogether and bring about the absolute ruin of the planters, living, as it was, in the greatest misery. Furthermore, he showed that the necessary new buildings and plant in the factories would pretty well absorb all the profit of the ensuing year. This very competent and energetic man could not, however, carry his wishes into effect at the time. Not until ten years later, in conjunction with the colonial minister, Fernando de Leon y Castillo, was he able to bring about the abolition, and on July 1, 1882, the planters were freed from their chains.

On January 1, 1883, the free manufacture of tobacco was also allowed. Already at the commencement of July, 1881, the fact was known, and the tobacco report of my house, dated July 9, 1881, commenced: "We head our report with the joyful and most important news of the decreed abolishment of the tobacco and cigar monopoly." We entertained the fear, however, that the rate of duty would be raised, and such was actually the case. Tobacco and cigars paid an export duty, and the import duty was raised 50 per cent. At first, however, the treasury bonds had to be redeemed, and this was done by means of auctions, whereby $150,000 was redeemed monthly to those who offered their bonds at the lowest rate. The Government had even the impudence to declare that demands of over 80 per cent would not be regarded. The first bondholders were ready to take 45 and 55 per cent; but it was soon found that there was a number of holders who were prepared to take vigorous steps, and refused less than 80 per cent. This caused the Government to hasten the redemption, and at the close had cleared a balance of two and a half million dollars.

Since January 1, 1883, various cigar factories have been established, of which, however, only a few turn out a really first class article. The cigars manufactured by many Chinese factories and by the natives as a home industry are of very inferior quality.

A new tariff of duties was introduced in 1891 which professed to be based upon a duty of 20 per cent. In reality, however, nearly all articles yielded more, some even over 100 per cent of the value. Then there were still various additional fees to pay on imports, and the export fees were also several times changed. To-day the practice is as follows: To the importation tariff, which in the case of some articles is increased by 20 per cent, there are harbor dues amounting to 10 per cent added and 8 per cent of the value of the goods, which is fixed by law. Spanish goods pay only the harbor dues and the 8 per cent of the value, and thus get upon the market, to the disadvantage of other better and originally cheaper produce.

Of the produce of the country, the principal pay export duties as follows:

And all produce pays $1.50 per 1,000 kilograms harbor dues. In 1880 the harbor dues, on both exports and imports, were raised, at first by 20 per cent of the import duty and 1 per cent of the export value, for the purpose of building a new harbor, and this, with some few alterations, remains so to this day. The harbor is a long way from being ready, nor will it ever be finished if the present system continues, even though of late the work has been a little expedited. At a normal rate of work, what has been done could have been finished in one or two years. With the amount received through the increased dues ten harbors could have been built, but probably the money no longer exists. The duty returns were, in

1828

1829 1830

$227, 000

229, 115

228, 061

In the last few years they have stood much higher, this being principally caused by foreign houses. For the past three years the returns

Thus the foreign houses paid, in 1895, 87 per cent; 1896, 88 per cent, and 1897, 73 per cent of the indirect duties.

During the recent years the Spanish figures have risen by reason of the increased export duties on tobacco, which the Compañía General shipped for the Spanish monopoly.

I now come to the question, What must be done in order to bring the production and trade of the colony into the condition in which they should be? The answer follows from what has already been stated.

Before all, the system of administration must be changed, and commerce and shipping, industry and mining, as also planting, given free play, quite independent of the nationality of the persons concerned. On the contrary, if the natives are not numerous enough to supply sufficient workmen, Chinese coolies should be brought over under government supervision in the same way as is done in Sumatra. The export duties should be wholly abolished and the import duties put on a suitable basis. The harbor works at Manila should be completed, and safe landing places also for larger steamers erected. And if not a free port, at all events a bonded warehouse is necessary.

I mention firstly and principally Manila, which will always remain the center and principal emporium. A beginning must be made by opening up Luzon, by laying down good roads and constructing bridges, of which to-day there is an absolute dearth. The waterways should be controlled, particularly those which can be easily made navigable. The construction of railways should be continued, in order to connect the interior provinces with Manila. The most important line would be one from Manila through Nueva Ecija, the Caraballo Mountains, the province Nueva Viscaya, into the valley of the Rio Grande de Cagayan. Then a branch of the line, already existing, from Manila to Dagupan, to the natural naval port Subig, which was recently decided upon, but has not yet been constructed. Communication with the Pacific coast, and numerous branch lines, will also gradually be required. Only a few points can be touched upon here.

A railway from Manila over Mariquina to Antipolo would be of great importance for Manila itself. It would pass through an extremely well-populated country which already supplies Manila with agricul tural produce and articles for the native population, and finally, after about 20 miles, ascending with a pretty steep gradient, reach Antipolo. Antipolo, a famous place of pilgrimage in the Philippines, lies on the west spurs of the Cordillera, in the province of Morong. It enjoys a cool, agreeable climate, and therefore would, without doubt, form a very suitable health resort for the inhabitants of Manila, and, indeed, perhaps a climatic health resort in general. For Europeans, working under great strain, such a place would be invaluable, particularly during the hot season, when the night temperature falls so little that refreshing sleep is often quite out of the question. Nor is it absolutely necessary that Antipolo itself be chosen; a still more suitable spot might perhaps be found in the neighborhood; the chief point is to set about the matter in a practical way and properly carry through the scheme.

Antipolo is frequently visited by foreigners. The route lies over what for the Philippines are tolerably good, but compared with those of English colonies miserably bad, roads to the Pasig. The river is then crossed, and a farther journey over bad, and sometimes worst possible roads brings us through Cainta, Taitai, in one afternoon to Antipolo. The effect of the journey is felt over the whole body for hours afterwards. I have had in April, whilst the heat in Manila was unbearable, to put on a summer overcoat in the evening in Antipolo.

For such undertakings as I have mentioned, and which can only be carried out by companies, it is absolutely necessary that concessions be granted with promptness and dispatch. Hitherto the custom has been to dally for years, until finally all interest in the matter was lost. Once a concession was actually granted for a railway to Antipolo, but the line was never constructed.