and Java. The growth in the use of kerosene by-products has contributed very greatly toward the development of the industry. About 1,500,000 tons of crude oil are produced annually in the Dutch East Indies, being marketed in China by three large companies known as the Royal Dutch, the Rochelle, and the Asiatic Petroleum companies.

Estate Products and General Trade.-There are two quite distinct kinds of trade in Dutch East Indian products. The trade in the estate products of the Island of Java and Sumatra is pretty generally controlled by large Dutch interests, while the trade in the many miscellaneous gums, and other tropical products of the Outer Possessions, is nearly all centered in the hands of the Chinese, whose entrepot is Singapore. It is this trade in Dutch East Indian products, carried on by Chinese, that has built up Singapore into one of the greatest primary markets of the world. The importance of shipping her products directly to the United States and other markets, rather than through Holland, has become more and more apparent to the Colony during the war when direct trade with the United States was made imperative. Since that time a very strong movement has been on foot among a large section of the Dutch colonials to build up their own markets direct, rather than through Holland. The importance of this movement to our export trade in the Dutch East Indies cannot be overestimated. By controlling large stocks of Dutch East Indian products the Germans and British, before the war, were able to divide the trade in manufactured goods between them. Commerce is an exchange of commodities, and no successful trade can be established unless our ships come back as well filled as they go out. It is necessary, therefore, to purchase direct those products which we formerly bought through the European trading countries, and in turn to sell our goods directly to the Colony.

QUESTIONS

1. How are the Dutch East Indies divided for administrative purposes? Name the four trade regions of the second division with ports.

2. Discuss the development of agriculture in general.

3. How has the sugar industry been developed? In what trade areas is it principally grown?

4. In what region is rubber grown? Discuss the tea production. 5. Where is tobacco chiefly raised and under what methods is it cultivated? Discuss coffee production.

6. What are the present and future prospects of copra production and the coconut oil industry?

7. What is kapok? Discuss cinchona, pepper and tapioca production.

8. Describe the tin-mining industry and its location. 9. Discuss coal and gold mining.

10. Where is petroleum found and where marketed?

CHAPTER XIII

COMMERCIAL METHODS AND MARKET ANALYSIS OF THE PHILIPPINES AND DUTCH EAST INDIES

THE PHILIPPINE ISLANDS

The import trade of the Philippines for the twelve months ending June, 1919, totaled $107,000,000, of which $64,000,000 was with the United States, $13,000,000 with Japan, $6,000,000 with China, $6,000,000 with French Indo-China, and most of the balance with Great Britain and her colonies. This trade represented a substantial increase over the total imports during 1918, when only $83,000,000 worth of goods were brought in, the proportion in which they were supplied by the various countries remaining the same.

Cotton Cloths.-The greatest single item of import was cotton cloths, of which 80,000,000 yards, valued at $16,000,000, were bought in 1919, $13,000,000 worth being supplied by the United States. The Philippines are one of the few Oriental markets where American cloths are predominant, and this position is only held, it is feared, because of the preferential treatment accorded the American product by the Philippine tariff, which is so constructed as to give American goods a market, where it is possible to do so without unnecessarily, or too seriously, increasing the cost of living of the Filipinos. Another factor which, even without a tariff, would place American cotton goods in a favorable position is the efficient marketing methods of America's premier merchandising company in the Philippines, the Pacific Commercial Company, whose organization is well established throughout the Islands and is in a

position to distribute American goods with comparatively very little overhead expense. This fact looms large in the cotton goods industry, in which business is generally done on so slight a margin that every cent added to the cost price means so much more difficulty in competing with others.

Iron, Steel and Machinery.-The second largest item of the import trade of the Philippines comprises iron and steel and machinery. Iron and steel and machinery which totaled $7,000,000 each are supplied almost wholly from the United States. In 1919 machinery almost doubled in value and this was accounted for by the number of trucks and tractors which were brought in from America. In the spring of 1919 a tractor demonstration was held under Government auspices, in which a number of American machines were entrants, and the results, though not given wide publicity, furnished the Government with a clue to the most satisfactory types for its own use, and its selections have been widely followed. The labor scarcity in the Philippines is accountable, more than anything else, for the demand for tractors, and, with no policy which would seem to alleviate conditions in sight, the demand seems bound to increase.

The Future of the Agricultural Implement Trade.— With vast quantities of undeveloped land simply awaiting the plow, and only a very limited population, the future development of the Philippines must depend either upon the more extended use of labor saving agricultural implements or a change in the immigration. laws which would permit indentured Chinese to work the estates. As the latter alternative seems remote in its adoption, attention has been turned for the present to the use of agricultural implements. The present land laws, which restrict holdings to 2,500 acres, are also a great handicap to any largescale development of the Islands. Many companies who

would like to invest money in the development of rubber, coconut, and other estates cannot do so under the present law. If the United States is to grant the Philippines their independence, they should not be turned loose with large tracts of rich, tropical, undeveloped land, practically beckoning to neighboring powers to come in and exploit. In preserving this land for the future generations of the Filipinos, whose numbers do not increase, the United States may be working against the best interests of present generations, who should enjoy at the present time the prosperity and development incident to a wise and fair investment of American capital on a sufficiently large scale to make it both profitable and safe.

Rice. Although the Islands are underpopulated they do not produce enough food for the population they have, because the high prices which the principal exports command abroad make it more profitable to raise hemp, coconuts, sugar, and tobacco and to import rice than to devote the Islands' lands and labor to rice culture. As a result about 150,000 tons of rice are imported every year, valued at $8,000,000, principally from French Indo-China and Siam. The dependence upon foreign sources of food supply caused the Filipinos much concern during the shipping shortage in 1917 and an attempt was made to convert a certain acreage to rice growing, but the return of shipping to normal soon made this program unpopular.

Wearing Apparel.-Cotton wearing apparel valued at $3,000,000 is the next largest item on the list of imports, and this trade is divided almost equally between the United States and Japan, where low grade goods can be produced much more cheaply.

Coal. The import of coal reached a total value of $3,000,000 in 1919, which was almost double the value of the 1918 import, although the tonnage remained the same at about 395,000 tons. About 80 per cent of this coal came