a satisfactory bill. I think it is essential, in our whole theory of Government, that these limitations and these restrictions on labor be put in with their consent. I think without their consent we are doing a rather abominable thing. I think with their consent we are working out the problem in a proper way, and in a very broad, big way. Senator VANDENBERG. Am I correct in the assumption that the limitations proposed herein represent approximately the present production in these various commodities? Mr. BRUCE. No, sir. They represent a little more than consumption. There is a cushion to take up the present momentum. Senator VANDENBERG. Suppose you had to take the Hawes-Cutting bill on a 5-year basis. Would you be willing to do it? Mr. BRUCE. No, sir. Senator VANDENBERG. Would you be willing to do it on a 10-year basis? Mr. BRUCE. No, sir. Senator VANDENBERG. In other words, time is of the essence of your point of view? Mr. BRUCE. I think it is of the essence of the situation. Senator KING. Is that based upon your consideration for American capital or upon the needs and the aspirations of the Filipinos? Mr. BRUCE. Both. It is primarily based on the desire of the West Coast to see this thing worked out so that it will not destroy our trade relations and our social and moral relations with the Orient. Senator KING. Do you regard the retention of the Philippine Islands for 20 years as indispensable to a proper adjustment of our social and moral relations-using your words-with the Orient? Mr. BRUCE. Yes, sir. I say 20 years. I do not say that that is my exact figure, but, as nearly as I can figure out, there has to be a substantial period to adjust what we have forced on the islands ourselves. They did not ask for free trade. We forced it on them. They voted against it. Their whole economic life has been built up on that free trade that we forced on them. We ought to unscramble it somehow. We ought to unscramble it without harm to them, if possible. Senator KING. Do you not think they are better judges of their social and moral welfare than we are? Mr. BRUCE. I am not speaking of the social and moral welfare of the Philippines, because I think it is very high. I am speaking of our relations with the Orient as a whole. I think it affects the problem of the whole Orient-the Dutch East Indies toward Holland; India toward England; Indo-China toward France; Formosa and Korea toward Japan-I think those problems are identical with our problems, and I think the world is looking to us as a leader in the solution of that problem. Senator KING. I may be too much of an idealist, but I was wondering as to your view. When the question of liberty is involved, and particularly with a people who are so racially different as the Filipinos are from us, when it comes to determining whether they shall be held under the flag, without the rights of American citizens, is not their welfare, and are not their aspirations the paramount question, rather than the social relations and the moral relations of the United States and the Orient? Mr. BRUCE. I think I might make the same criticism you made of the Secretary this morning, Senator. That is a speech, rather than a question. Senator KING. Call it a speech. I will put it in the interrogative form, then, and make it a question. As we say in court, I will withdraw the question and put it in this form. Do you not think that the paramount question here is what is right and just for the Filipinos, and that they are better judges of what they want, and what is right, and what is just, than we are? Mr. BRUCE. I have never heard yet a Filipino discuss this exact, specific point, and I would be glad to hear him do it. I do not think it is fair to the Filipino for us to be constantly raising a question as to his general political aspirations, and at the same time ignore the point which Speaker Roxas himself has brought out, that an economic problem has been created by our action. Senator KING. When our forefathers were fighting for liberty, and there was a homogeneity between them and the British-because we were descended from them-I do not think they considered so much those economic questions. Great Britain insisted that if they were to act alone and become independent, they would be lost; they could not survive economic law. But the whole question with them was, "We want our independence." Mr. BRUCE. I have never heard that Great Britain built up prosperity in the United States because of special trade privileges and benefits they gave to the United States. Senator KING. They did not give any special trade privileges or benefits, but considerable trade was built up. We had our clippers on the high seas, and carried commerce from the United States to Great Britain, and from Great Britain to the United States, although Great Britain sought to interdict much of that. Mr. BRUCE. I, frankly, can not see much analogy between the Colonies and this Philippine question. Senator KING. As a matter of fact, the argument is far stronger in favor of the Filipinos than it was for the Americans, because they are racially different from us. Their culture and religion are different. Mr. BRUCE. Senator King, I do not think we differ in principle on this thing. By every moral obligation which we could create, we promised those people that they should be masters of their own destiny, and the question is as to the time when it should be done, and how we can use the interim best to enable them to prove their capacity, and to adjust the relationship which we ourselves have imposed on them. Senator KING. Do you not think, Mr. Bruce, that the longer we stay there, the more difficult it will be to sever the economic bonds that bind the Philippines to us, or us to them? Mr. BRUCE. I think, without these limitations, the answer is yes. I think, with a fixed date as their objective, to get ready for it, and with these limitations, the answer is no. Senator KING. It seems to me that a prolongation of 20 years would create such a maze of conditions that they would be bound as much as Laocoon was bound with the chains. Mr. BRUCE. The trouble is, up to date, that we have been drifting along with a free-trade relation and an economic condition that we have forced on them. I think it is proper for us to say, "We are going to call a halt on this, and we are going to give you a reasonable time to get ready for it." As a Senator VANDENBERG. If you were going to run it over 20 years, what would you say to the proposition of graduating this limitation? Mr. BRUCE. I think, Senator, that we have established by this principle a theory which can be worked out as time goes on. matter of fact, I think at the present time the obvious thing to do is for the Philippine Islands to actually raise duties so as to protect our goods more, so as to make a more balanced trade, I think we ought to work on the theory that we are going to give the islands this cushion to build up their free markets on. Senator VANDENBERG. But when you read the 20-year period, and your 1,000,000-ton license is to be summarily withdrawn, have you not created a more difficult situation for them, than if you had graduated that limitation throughout the years, so that perhaps the last five years they were down to half a million tons? Mr. BRUCE. I think the answer to that is, Senator, that we have built this sugar industry in the Philippine Islands up on the basis of free trade with the United States. It was built up primarily at the urgent request of American authorities, to increase sugar production at a time when there was a shortage. Senator BROUSSARD. When was that, Mr. Bruce? Mr. BRUCE. Between 1918 and 1925. Senator BROUSSARD. In 1922, Mr. Bruce, the Philippines sent 245,365 tons. Mr. BRUCE. That is the exact point I make. Senator BROUSSARD. Last year there was not any stimulation over there induced by anybody except the investors, and they sent here 708,686 tons. Mr. BRUCE. That is the reason for this increase. The Philippine National Bank, with the approval of our American officialsSenator BROUSSARD. The War Department. Mr. BRUCE. Yes, sir; with the approval of the War Departmentloaned, I think, over $50,000,000 or $60,000,000-I have forgotten the exact figure to the sugar industry in the Philippine Islands, and $30,000,000 or $40,000,000 of that is a frozen investment of the Philippine National Bank to-day, and unless it is decently liquidated, the national bank is going broke. Senator BROUSSARD. When was that done? Mr. BRUCE. From 1918 to 1921. That is what caused this big increase. Senator BROUSSARD. Do you think that it is fair to the domestic industry to permit the Philippines to send 20 per cent of the total sugar imported into the United States from Hawaii, Porto Rico, the Virgin Islands, the Philippines, and all foreign countries? Mr. BRUCE. I think domestic sugar would have to increase its production by over 200 per cent before it could do them any harm. Senator BROUSSARD. That is not so. It hurts us now. My people understand that, and that is why we have been protesting. We want a limitation. When this question was up last year, it was claimed by those who opposed my resolution to limit them that they had reached the limit of production. I propose to insert here a statement showing that in 1921 there were only 147,212 tons sent here, and that gradually increased by over 20 per cent every year until 1930, when they sent 708,686 long tons. Mr. BRUCE. Senator Senator BROUSSARD. You are not satisfied with that, if you indorse this section 6. I will state to you, in the years included under the provisions of this bill, that in 1929 there were 5,605,543 tons brought into this country. In 1926 there were 5,371,801 Mr. BRUCE. Brought in from where, sir? Senator BROUSSARD. Brought in under the terms of this bill; brought in from the Hawaiian Islands, from Porto Rico, the Virgin Islands, the Philippines, and foreign countries. I am just showing you the years where we imported more than 5,000,000 long tons of sugar. Mr. BRUCE. I did not know we had ever done that. Senator BROUSSARD. We have. Mr. BRUCE. May I say this, Senator Senator BROUSSARD. Let me finish this. In 1922 we imported. 5,168,638 long tons. Your 20 per cent makes that over 1,000,000 tons that you would permit the Philippines to send here. In 1930 they produced only 778,571 long tons, and they sent to this country 708,686, keeping 50,000 tons at home. Under your theory, under the pretext of permitting those people to liquidate, you would give tham a 33 per cent increase in the future and dump them suddenly five years from now Mr. BRUCE. I think it is only fair to say this-I had no idea this was going to come up for discussion this afternoon. I thought I was to limit myself to what I have already said. Senator BROUSSARD. Can you justify this provision? Mr. BRUCE. I can justify it on two grounds, Senator. In the first place, I think this whole matter of the adjustment prior to independence of the Philippine Islands has to be worked out on the basis of a mutual arrangement and agreement between the Filipinos and ourselves. They have suggested this, which seems to me to be a reasonable limitation which can not injure the American producer of sugar. That is the first and most prominent and important ground I take. Second, I think this sugar business in the Philippine Islands has reached an impetus that can not fairly be stopped overnight, because the Philippine Islands, with our approval, built up their business in the islands. Senator BROUSSARD. How did they do that? Mr. BRUCE. Because we largely financed it. Mr. BRUCE. By organizing the Philippine National Bank, and lending them $60,000,000. Most of this was not a commercial loan. This was a frozen loan, to build plants with. Senator BROUSSARD. What year? Mr. BRUCE. I have not the exact figures now. 1918 to 1921. I think it was Senator BROUSSARD. 1919 was the time that they broke the Cuban demand for sugar, when the price was 25 cents, to 5 cents, and they went into this big loan after sugar was selling for 5 cents? Mr. BRUCE. You mean for raw sugar? Senator BROUSSARD. Yes. Mr. BRUCE. This whole increase of Philippine sugar was because of a belief in the world shortage of sugar. Senator BROUSSARD. There has been a surplus of sugar. Mr. BRUCE. There was not before that. We got up to 25 cents a pound. There was a shortage. Senator BROUSSARD. That was not a shortage. We could have bought that Cuban crop at 6 cents a pound, and the Government had an option, and refused to buy it, and the Cubans held us up for 20 cents. Senator KING. Senator, may I interrupt? I may not have the point fully in my mind. Do you not think that during the World War a condition was created in agriculture-wheat, and all agricultural products, including sugar-the reactions of which were continued long after the termination of the war? Senator BROUSSARD. That is right. Senator KING. Many persons went into the sugar business, and into the agricultural business, upon a larger scale than they would have done if conditions had remained normal. Senator BROUSSARD. I am glad the Senator asked that question. In 1921, Cuba produced 513,303 long tons, and she sent to this country 147,212. Where was the stimulation after 1921? The war was long over. Mr. BRUCE. I do not think those can be the figures. Are not those millions? Senator BROUSSARD. Yes. They were given me yesterday. Senator BROUSSARD. They are from the Bureau of Customs, Washington, D. C., February 8th. Mr. BRUCE. For Cuba? Senator BROUSSARD. The Philippines. Mr. BRUCE. You said Cuba. Senator BROUSSARD. I meant the Philippines. What was the stimulus after 1921? Senator KING. It was just like a snowball that started out. You may remove the force that started it, but it will continue rolling for an indefinite period, and perhaps increase in momentum and size. Senator BROUSSARD. The idea continued, but the facts that confronted them showed that they should not have proceeded with it. Mr. BRUCE. Unfortunately, many people act on ideas rather than facts, and that is what they did in the Philippines. Senator BROUSSARD. I am only putting these things into the record so that the Members may get them. I certainly think, in working out this bill, that the provision permitting them to ship here over 1,000,000 tons of sugar when they do not produce that much-not within 300,000 tons-is not for the purpose of permitting them to liquidate, but is for the purpose of stimulating production, which I think would be injurious to this country and injurious to the Philippines themselves. Where would they find a market for 1,000,000 tons? Mr. BRUCE. I think, Senator, it is only fair to point out that this suggestion, which was made by the Filipinos themselves, was followed by the testimony of Mr. Cummings, who appeared before the House committee for the beet-sugar interests in the United States. He |