templates 1,300,000 long tons from Cuba. Then before prices could be cut more than the Cuban reduction we would have to produce and ship here 2,100,000 short tons of sugar, provided increased production in domestic product should exactly keep pace with increased consumption. Mr. Palmer also quotes from a speech of mine made before the New York Chamber of Commerce. He does not give the full quotation. I give it, as follows: The sugar and tobacco industries in the islands are capable of a considerable increase. The island of Negros contains sugar land as rich as any in the world, and the provinces of Cagayan, Isabela, and Union contain tobacco lands which, next to Cuba, produce the best tobacco in the world, but the trouble is that the markets for such sugar and tobacco have been by tariffs imposed in various countries very much reduced. Should the markets of the United States be opened to the Philippines it is certain that both the sugar and the tobacco industry would become thriving, and although the total amount of the product in each would probably not affect the American market at all, so extensive is the demand here for both tobacco and sugar, it would mean the difference between poverty and prosperity in the islands. I know that the reduction of the tariff for this purpose is much opposed by the interests which represent beet sugar and tobacco, but I believe that a great majority of the people of the United States are in favor of opening the markets to the Philippine Islands, conscious that it will not destroy either the beet sugar or the tobacco industry of this country, and feeling that as long as we maintain the association which we now have with the Philippine Islands it is our duty to give them the benefit of the markets of the United States and bring them as close to our people and our trade as possible. Nothing else will justify the application of the coastwise trading laws to the transoceanic trade between the United States and the Philippine Islands, but if they are invited to partake of the benefits of the protection theory, they may well be subjected to the rule that as between the United States and themselves the products are to be transferred in American bottoms. Mr. Palmer quotes from my report for the year 1901, in which I said that if Congress will reduce by 50 per cent the United States duty on tobacco, sugar, and other merchandise coming from these islands, it is certain that the trade between them and the United States under the new tariff will increase by leaps and bounds. I was examined on this subject within two months after the report had been made in February, 1902, and, as will be found in the hearings before the Senate committee, I very much qualified this expression, as will be seen by reference to pages 157, 158, and 159 of the hearings. I ought to say, too, that the experience under the 25 per cent reduction, which was passed in 1902, shows how little effect a 50 per cent reduction would have had, and that the statement in the report was, in fact, erroneous. Mr. Palmer says that the Philippines have been in prosperous condition and that I have been entirely wrong in representing that the conditions of agriculture were disastrous there and that the President's message, which was probably prompted by me, on this subject is equally erroneous. In the first place, it is to be said that the Spanish figures taken from the custom-house are not to be trusted, because under their system the duties were not all collected, and the amounts exported and imported, as stated in their reports, are probably much less than they really were. But however this may be, no one can S. Doc. 277-06-79 have been in the islands as long as any of the witnesses who have been before the committee have been without knowing the disastrous condition of business, and that means agricultural business in the islands. It is true that the value of the hemp exports has increased because of the great rise in the price of hemp in the markets of the world. but the increase has been very much greater therefore in the value of the hemp than in the quantity of the hemp exported, as will be seen by reference to statistics. In 1904 the exportation was 122,000 tons; in 1894 it was 95,000 tons. Now, it is true that there is prosperity in those provinces in the islands that raise hemp, but the great industry of the whole islands is the production of rice. Indeed there are 1,600,000 acres in the rice industry, where there are but 575,000 in the hemp industry, 180,000 in the sugar industry, and 80,000 in the tobacco industry. And the means of determining the falling off in the rice industry is by comparing the importation of rice for food into the islands in 1894 with that of 1903. In 1894 the importation was 133.000.000 pounds; in 1903 it was 737,000,000 pounds, for which the islands had to expend $12,552,000 gold. The falling off of sugar from a total of 264,000 in 1893 to 72,000 in 1900 and to about 100,000 in 1904 has already been impressed upon the committee. Taking the average export of tobacco between 1890 and 1894 and that between 1900 and 1904, it fell off 1,500,000 pounds a year, and this all under the Spanish statistics. The effort to prove that the islands are in a prosperous condition is so utterly hopeless in view of what has actually taken place in the business situation of the islands that I can not spend more time upon it. I introduce a statement of the treatment of Philippine sugar by Spain under the law of June 30, 1882, and under subsequent laws: TREATMENT OF PHILIPPINE SUGAR BY SPAIN. [The law of June 30, 1882. Translated from Alcubilla's Appendix, vol. 9.] From the same date (1st of July, 1882) the products of Cuba, Porto Rico, and the Philippines will be admitted free of duty into the Peninsula, with the exception of tobacco, which will remain subject to existing laws, and of rum, sugar, cacao, chocolate, and coffee, which will pay the following duties: Rum, product of and proceeding from Cuba and Porto Rico, hectoliter, 10 pesetas. Cacao and chocolate, product of and proceeding from Cuba and Porto Rico, 100 kilograms, 25 pesetas. Coffee, product of and proceeding from Cuba and Porto Rico, 100 kilograms. 20 pesetas. Sugar, product of and proceeding from Cuba and Porto Rico, superior to grade 14 of the Dutch standard without other test than that of color, which corresponds to special scale, test being made on its entrance into the warehouse, 100 kilograms, 12 pesetas. Sugar, inferior to before-mentioned grade, tested in the same manner, 100 kilograms, 5 pesetas, 50 per cent. When these articles are produced and proceed from the Philippine Islands they shall only pay one-fifth part of the before-mentioned duties. Article 3. The duties indicated in the preceding article will be annually reduced by one-tenth parts until the 1st of July, 1892, when they will be wholly abolished and free trade established. At the same time under the tariff law of December 31, 1891, there was im posed a tariff on sugar and glucose from foreign countries of 324 pesetas per 100 kilograms, and at the same time a transitorial tax of 134 pesetas per 100 kilograms and a municipal tax of 13 pesetas per 100 kilograms. That is a total tax on foreign sugar of 591 pesetas, a peseta being worth about 19.3 cents. It will thus be seen that the tax on foreign sugars was practically prohibitive. At this time the interior tax-that is, the transitorial tax and municipal taxon colonial sugar was the same as that on sugar produced in the Peninsula, a differential in favor of sugar produced in the Peninsula being, as indicated above, produced by the tariff only, the differential being exactly one-fifth against the Philippine sugar that it was against sugar from Cuba and Porto Rico. In 1892, when the colonial sugar-that is, sugar from the Spanish colonieswas admitted free of duty when entering Spain in Spanish vessels, a differential in favor of Spanish or home sugars was created by the imposition, first, under the law of December 31, 1902, of a transitorial tax of 8.8 pesetas and a municipal tax of 8.8 pesetas, which was again changed in the appropriation law of the 30th of June, 1902, by imposing an internal tax on sugar and glucose from abroad of 50 pesetas per 100 kilograms, from the colonial possessions of Spain of 334 pesetas per 100 kilograms, and on that produced in the Spanish Peninsula of 20 pesetas per 100 kilograms-that is, from 1882 to 1892 there was a differential in favor of the home-grown sugar as against that grown in the Philippines of 2.4 pesetas per kilogram, or 48 cents per 220 pounds, or about 22 cents per 100 pounds, and this under the law was reduced by one-tenth each year until 1892. After 1892 there was imposed a tax on Philippine sugar in excess of that imposed on home-grown sugars of 134 pesetas per kilogram, or 270 cents per 220 pounds, or about 1.2 cents per pound. At all times there was imposed a tax on foreign sugars that was practically prohibitive. I do not think of anything else that I care to say. I am very much obliged to the committee for their leniency in listening to me for so long, and also for accommodating themselves to my convenience. Senator HALE. We have gotten a great deal of information from you. Senator DUBOIS. Mr. Secretary, if it meets with your views, we will have a bill prepared for the survey of the public lands in the Philippines, and appropriate the money directly, and also money to aid them in education. I shall be very glad to introduce such a bill. Secretary TAFT. We will take anything you give us. The CHAIRMAN. I now announce these hearings as finally closed, and I will say to the committee that I shall call a meeting on Friday, at 10.30 o'clock, to consider this bill and amendments. At 12 o'clock and 5 minutes the committee adjourned. INDEX. Acts of Congress: December 15, 1902. Administration, American, in Philippines, increased expenditures under. Agricultural Department, encouragement to tobacco industry. Bill introduced by Senator Newlands for the establishing of. 1178 232 233 1180 1179 233 1178 Lands- Florida, per cent of, cultivated in.. Conditions of growth Prices, decline of, reason for. Production in Philippines Welborn, C. J., director of. Alcohol: 193 193 193 193 193 193 412 99 344 275 218 218 192 Laborer, difference of work done by, with and without 233 Molasses obtained from sugar used for making 233 American Sugar Refining Company, number of factories in Michigan in which Bill introduced to buy claims controlling entrance to coal lands Banks, Philippines, agricultural mortgage, advocacy of.. 34, 44, 48, 233, 347 Bank of India, Australia, and China, proposed legation 20 |