5 104 500 00
5. Cigars and cigarettes . . .
6. Printing and publishing . .
7. Shoes and other leather goods
8. Ice and cold storage ....
9 Rice mills
254 767 00
375 867 00
7 936 060 00
13 542 000.00
2 938 032 44
17 246 494 44
775 214 00
2 083 200 00
2. Hotels and restaurants . . .
3. Educational and religious. .
4. Clubs and societies ....
P95 603 104 00
1*207 161 167.74
NOTE. Twelve corporations reported to have been dissolved are not
SUGGESTIONS FOR REVIEW AND ORIGINAL WORK
SUGGESTIONS BASED ON THE TEXT
I. Are the Philippines a densely populated country ? 2. Prove
your answer with comparative figures. 3. How many fold may
the Philippine population be increased before the country will
become as densely populated as an agricultural country ?
4. Improvement in agriculture in relation to diminishing returns
5. Explain why dense populations develop manufacturing.
6. Explain why manufacturing regions are densely populated.
7. Density of the population of the Philippines in relation
to (a) seasonal labor, (b) the settlement of regions newly opened
to agriculture, (c) manufacturing and commerce.
8. Illustrate the stages in manufacture by examples from the
Philippines. 9. Why will household production of manufactured
articles continue in the Philippines ?
10. Figures which show the growth of capital in the Philippines.
II. Name five companies in the Philippines whose stocks are
now available for investors. 12. Which do you think a good
investment? 13. Why?
14. Japan imports abaca fiber worth P 4,000,000, and reexports
it as braid worth * 14,000,000. Explain how this is a loss to the
Philippines. 15. Name three partly manufactured products that
the Philippines have begun to export in the past few years.
16. Why is this more beneficial to the Philippines than the
export of the raw products ? 17. Name some other raw products
that might be exported in semimanufactured form.
18. Are conditions favorable or unfavorable for manufacture
in the Philippines ?
19. In 1918 the oil mills in Manila were forced to stop for a
considerable part of each working day because they were not
able to secure electric power. Using this as an example, explain
the necessity for abundant power in manufacture.
20. If electric power is developed in the Philippines as it
has been in Italy, what effect might its introduction into house-
holds have on the development of household industries in the
388 ECONOMIC CONDITIONS
21. In 1918 about 8000 emigrants were sent to sparsely
populated regions of the Philippines ; these emigrants went
from Cebu and Iloilo for the most part. In the same year
about 2700 emigrants went to Hawaii, of which more than
1000 emigrated from Cebu, 850 from Ilocos Norte, and 300
from Oriental Negros. Comment on these emigrations as to
(a) the effect of density of population, (6) the advantage or
disadvantage, economically, of these migrations of laborers.
SUGGESTIONS FOR THE STUDY OF LOCAL CONDITIONS
1. Density of population. 2. Emigration or immigration.
3. Household industries. 4. Factories. >. Industrial centers.
SUGGESTIONS FOR REPORTS FROM REFERENCES, ESPECIALLY
FROM COMMERCIAL GEOGRAPHIES
1. The concentration of industries in the United States and
parallels in the Philippines. (Brigham, pages 92-110, 202-228;
Bishop and Keller, 201-209.)
2. The United States, the United Kingdom, Germany, France,
Belgium, Japan as manufacturing countries. (Brigham ; Bishop
3. The production of cloth, hats, mats, pottery, and embroidery
in the Philippine households. 4. Encouragement by the govern-
ment. 5. The export of household manufactures from the
Philippines. 6. The United States as a favorable market.
7. Philippine factories. 8. The growth of the Philippine ex-
port of manufactured and partly manufactured products.
9. The life-insurance companies in the Philippines as factors
in stimulating the growth of capital through saving.
10. From the latest report of the Collector of Internal Revenue
determine the income tax per capita in each province ; the tax
per capita on merchants and manufacturers. 11. Plot these
figures and comment on them.
12. From figures in the annual report of the Treasurer of the
Philippine Islands make a chart showing the increase in the com-
mercial savings accounts since 1907. 13. Make a similar chart
showing the total resources of commercial banks since 1907.
14. Interpret this chart in terms of accumulated capital and of
what you have learned about the history of the trade in
15. The financing of industry and the development of
corporations. (Bishop and Keller.)
16. The corporation laws of the Philippine Islands. You have
just organized a corporation which has entered into the business
of manufacturing cigars. Explain how the organization was
17. The production of coal and iron, and how manufacturing
and industry in general depend on them (illustrated with charts,
tables, and maps). (All commercial geographies.) 18. The importa-
tion of coal into the Philippines. 19. The importation of iron
and steel, and their manufactures.
20. The commercial history of petroleum. 21. Its manufacture
and uses. (All commercial geographies.) 22. Imports of petroleum
and its products into the Philippines.
23. The production and use of gold, silver, copper, and plati-
num. (All commercial geographies.) 24. The production of gold
in the Philippines (see the Treasurer's Annual Report).
25. The production and use of the principal metallic minerals.
(Bishop and Keller and other commercial geographies.)
26. The production and use of the principal nonmetallic
.minerals. (Bishop and Keller and other commercial geographies.)
27. Textile manufacture. (Bishop and Keller and other com-
28. Chemicals and dyestuffs. (Bishop and Keller and other
29. Development in the uses of electricity. (Bishop and Keller
and other commercial geographies.)
30. The making and use of cement. 31. Its particular value
for construction in the Philippines. 32. Domestic production of
33. The world's production and supply of salt. 34. Its produc-
tion and trade in the Philippines.
35. Other uses of minerals. (All commercial geographies.)
36. Although statistics on household industries in the Philip-
pines will not be available until the publication of the census of
1918, preliminary figures indicate the importance of these indus-
tries. Statistics from eight provinces are as follows :
VALUE OF RAW
PI 132 204 14
F2 341 212 45
112 638 44
1 883 905 82
487 470 07
1 498 215.34
360 383 38
788 827 65
P2 987 167 89
P 8 868 868 23
From these statistics compare the production of household
industries per capita in the different provinces.
37. Compare the value of the product of the household indus-
tries with the values of various crops, as shown in the statistical
reports of the Bureau of Agriculture.
38. If a copy of the census of the Philippine Islands for 1918
is available, make charts indicating the provinces in which house-
hold industries are of greatest importance.
39. Make a small map showing the distribution of household
industries in the Philippines, using data on household industries
by municipalities from the census of 1918, and letting each dot
represent 100 workers or 10,000 pesos' worth of product.
MANUFACTURING IN THE PHILIPPINES (FROM THE
CENSUS OF 1918)
1. From the data on population by provinces and municipalities
in the census of 1918 make a small map showing the distribution
of population in the Philippines. Let each dot represent 10,000
inhabitants. Compare this map with Chart XXXIV. 2. Make
a chart of the provinces in the order of density of population.
3. Which provinces have areas of very dense and which of very
SELECTIONS ON THE THEORY OF ECONOMICS TO BE APPLIED
TO THE MATERIAL IN THE CHAPTER
1. The law of diminishing returns. (Bullock, pages 74-75.)
2. Review the references for the organization of labor. (Bullock,
3. The factors of production. (Bullock, pages 32-54.)
4. The organization of the factors of production. (Bullock,
5. Business corporations. (Bullock, pages 60-73.)
6. The law of economy in organization. (Bullock, pages 82-91.)
7. Monopolies. (Bullock, pages 169-197.)
8. Labor adjustments. (Bishop and Keller, pages 385-396.)
9. Explain the following quotation from Clay's "Economics
for the General Reader " : " The employer buys labor, not the
laborer ; if he can get a great deal of labor from one man, he may
pay him as well and will probably pay him better than buying a
little labor from each of two or three men.' 7
Just as a division of labor results in commerce between men,
so commerce between regions arises from those different
conditions of soil, climate, and environment which cause one
locality to produce certain things cheaper and better than they
can be produced elsewhere. Since each person produces but
one commodity, he must exchange this for whatever he re-
quires ; since the inhabitants of a given place produce and
export those commodities which they can obtain in greatest
amounts, or which will bring them the greatest returns, they
are obliged to import other products in exchange. 1 Commerce
in the tropics consists of the export of raw materials to the
northern temperate regions, and the import of manufactured
goods from those regions.
1 In the coconut region of Sariaya, in Tayabas Province, practically all food-
stuffs and manufactured articles are imported, since it is more profitable for
the people to give all their attention to their coconut groves than to branch
out into other industries. Hence all available land is planted with coconuts.
Abaca, sugar cane, tobacco, and the coconut palm flourish in the Philip-
pines. Consequently hemp, tobacco, copra, and sugar are exported, while
rice, cloth, machinery, flour, and other manufactured products are imported.
So, in most localities, certain things which are not produced at all, or not so
cheaply as in other regions, are imported and paid for with those products
to which the locality is adapted.
Commerce also arises from the habits of people. National habits spring,
for the most part, from environment which creates peculiar material wants.
These habits are most apparent when people move to other lands. Thus, the
Americans and northern Europeans have brought to the Philippines their
taste for butter, and the people of southern Europe their taste for olive oil.
Tea must be imported into the Philippines for the consumption of the Chinese
and other tea drinkers. Trepang (a sea slug obtained in the Philippines) is
not consumed by the Filipinos, but by the Chinese. The Filipinos use many
fruits, such as papayas, in a green state, whereas Europeans and Americans
consume them only when ripe.
TOTAL FOREIGN COMMERCE OF THE PHILIPPINES
On Chart XXXVI it will be seen that the total volume of
foreign trade was fairly constant during the last years of the
* to 00 O W tft <> CO
CHART XXXVI. TOTAL FOREIGN TRADE OF THE PHILIPPINE ISLANDS
IN MILLIONS OF PESOS
Census and Customs Statistics
Spanish occupation. For the twenty years from 1874 to 1894
the average total trade was about P 75,000,000.
This stagnant condition was changed by the American occu-
pation. The restrictions on internal and external trade were
removed, and interest in the economic development of the
394 ECONOMIC CONDITIONS
country was encouraged. By 1902 the foreign trade of the
Philippines had increased to more than Pi 20,000,000, a level
which was maintained until 1909. In 1909 the Payne tariff
provided for reciprocal free trade between the Philippines and
the United States ; this gave to the Philippines a practically
unlimited market at prices much higher than could be secured
in other countries of the world. The production of export
crops rapidly extended ; by 1913 the total trade of the Islands
reached the level of more than 1*200,000,000.
The trade would probably have remained there had not
the World War occurred. In 1916 the great demand for raw
materials which this conflict caused finally affected the Islands.
In the last two years of the war the volume of Philippine
trade doubled; in 1918 it was more than 1*467,000,000.
An examination of the statistics covering the export of
hemp, coconut products, sugar, and tobacco indicates that the
larger part of the increased value of exports from 1910 to 1913
was due to increase in the actual amount of products sent out
of the Philippines ; the amount of goods imported also greatly
increased. On the contrary, the increase in value of exports
in 1917 to 1918 was mostly due to war prices; that is, the
Philippines received much more for only a slightly greater
volume of products, and had to pay higher prices for goods
imported. In general, the increased value of trade in 1913
was due to the amount of goods, and in 1918 to the high price.
What will the post-war level of Philippine exports be ? It
will certainly be much higher than the level reached in 1913.
The war demands have increased the acreage of Philippine
export crops, and a considerable percentage of war profits
have been invested in improvements to agricultural lands, and
in machinery to aid in the manufacture of raw materials, as
in sugar centrals and oil mills ; the world level of prices has
permanently increased, and higher prices may be expected for
all Philippine products. World conditions indicate a perma-
nent increasing demand for cane sugar, copra, and oil ; and a
market for Philippine cigars and tobacco has evidently been
firmly established in the United States. Of all the principal
export crops of the Philippines hemp is the only one that
does not seem to have an immediately bright future ; it is
probable that the slump in 1919 was merely a repetition of
similar periods in the history of abaca. Although it is prob-
able that the general level of exports will not be so high
as in 1918, because of the abnormal war prices ruling at this
time, nevertheless there are indications that the Philippines
will enter a period of great prosperity and attain a volume
of trade much higher than at any previous period. For the
first six months of 1919 the value of exports from the Philip-
pines had decreased about twenty-five per cent over the
exports for the first six months of 1918; imports increased
heavily, however, and as a consequence the total trade for
the first half of 1919 was only a little less than that for the
first half of 1918.
BALANCE OF TRADE
On Chart XXXVII both the imports and the exports of the
Philippines from 1899 to 1918 are indicated. It will be noted
that during certain periods imports have exceeded exports ;
and that during other periods exports have exceeded imports.
In general, exports and imports seem to counterbalance each
other in the foreign trade of the Philippines. Large importa-
tions of rice probably had something to do with excessive
imports in the years from 1899 to 1904 and from 1910 to
1914. Imports would have been much greater in 1917 and 1918
if it had been possible to secure goods. With the end of the war
a greater proportion of orders from the Philippines were filled
in the United States and Great Britain ; in the first six months
of the year 1919 imports had again exceeded the exports.
In 1912 Philippine imports were 1*123,000,000, and exports
about 1*110,000,000, a difference of about 1*13,000,000. In
1916 the difference was 1*49,000,000, but this was an excess
of exports over imports, the exports for the year having been
1*140,000,000, and the imports about 1*91,000,000. Such a
difference between imports and exports is called the balance of
trade, the significance of which is usually misunderstood.
Two centuries ago the mercantilist theorists supposed that
an ex cess -of exports was favorable to a country and an excess
of imports unfavorable. Such, however, is not the case, since
other factors influence the balance sheet of the country: 1
Items tending to excess imports
2. Receipt of a loan
3. Interest on capital invested
in other countries
4. Earnings of native mer-
5. Donations received
6. Profits of shipping
7. Expenditures of other nations
8. Indemnities received
9. Travelers from other coun-
Items tending to excess exports
2. Repayment or an advance of
3. Payment of interest on for-
4. Profits of foreign merchants
5. Donations given
6. Payments to foreign shipping
7. Expenditures made abroad
8. Indemnities paid
9. Travelers in other coun-
In the long run the balance of trade of the Philippines
should be favorable. Excess exports should be sent away
to pay (1) interest on large sums of foreign capital invested
here, (2) profits of foreign merchants who control the trade
of the Islands, (3) charges for the use of foreign shipping,
(4) money taken or sent away, (5) expenditures of travelers
and students abroad.
1 That both rich and poor countries may have an unfavorable balance of
trade or a favorable balance may be seen from the following pre-war figures :
$ 641 576 000
$ 483 773 000
832 406 000
682 418 000
521 448 000
290 224 000
306 812 000
245 538 000
3 309 987 000
2 204 322 000
256 942 000
325 271 000
British Indies .
449 583 000
719 334 000
United States ....
1 653 Q 65 000
2 170 320 000
2 Bastable's "The Theory of International Trade."
1900 1902 1904 1906 1908 1910 1912 1914 1916 1918
CHART XXXVII. FOREIGN TRADE OF THE PHILIPPINE ISLANDS IN
MILLIONS OF PESOS
Census and Customs Statistics
CHART XXXVIII. ARTICLES INCLUDED
IN THE PHILIPPINE EXPORT TRADE
Averages of ten years in percentages
On the other hand, the expenditures of the United States
government for supplies for its troops and vessels stationed
here, and for the payment
of these troops, tend to re-
duce the excess of exports,
while the inflow of foreign
capital still more greatly
increases the imports, and
even results in an unfavor-
able balance. This may con-
tinue for some time.
That a rich country like
the United Kingdom should
have an unfavorable balance
of trade, and a poor country
like India a favorable bal-
ance of trade, shows that
these words are misnomers
when so employed. Excess
imports and excess exports
are the results of complex
conditions, and either of
them may indicate a healthy
condition of a country's for-
PHILIPPINE TRADE WITH
THE UNITED STATES
The character of exports
from the Philippines maybe
seen in Chart XXXVIII.
The proportion of each of
the four principal exports
in the export trade from year to year is indicated in Chart
XI. In Chart XXXIX may be seen the character of the
CHART XXXIX. ARTICLES INCLUDED
IN THE PHILIPPINE IMPORT TRADE
Averages of ten years in percentages
Chart XL indicates that the imports from the United States
have greatly increased in importance since 1909. Before that
time, and from the beginning of the American occupation, the
imports into the Philippines came for the most part from
Great Britain and the United States, and to a less extent
from Germany and France. (This discussion does not include
China not included.
1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918
CHART XL. COUNTRIES PARTICIPATING IN THE IMPORT TRADE INTO
THE PHILIPPINE ISLANDS IN PER CENT OF TOTAL IMPORTS
the import of rice from French Indo-China.) Until 1909 Great
Britain had been the source of about twenty per cent of the
imports into the Philippines; the United States controlled
somewhat less than that proportion. In 1909 the Payne tariff
made it cheaper to import certain classes of goods from the
United States, for these paid no duties ; consequently the
proportion of imports from the United States greatly increased.
By 1913 the share of the United States in the import trade
into the Philippines was fifty per cent. It would probably
400 ECONOMIC CONDITIONS
have remained at those figures if the World War had not
made the Philippines dependent on America for many articles
which would normally have been procured in Europe. In 1918
this had increased to almost sixty per cent.
Between 1909 and 1913 the percentage of imports from the
United States trebled. In the same period the value of these
imports increased more than fivefold, that is, from P10,000,-
000 to more than 1*50,000,000. This happened because the
import trade of the Islands increased very greatly during the
period in question, and nearly all of the increase came from
the United States. Many products, such as automobiles, had
never before been imported in quantity ; other products that
had previously been imported from the countries of Europe,
such as cotton goods and iron and steel products from Great
Britain, sardines from Spain, dyes, medicines, and chemicals
from Germany, jewelry, watches, and fine goods from France,
were now obtained from America. In the period from 1915
to 1918 about seventy per cent of cotton goods and an aver-
age of eighty-five per cent of iron and steel products were
imported from the United States. These are the two largest
items in the import trade, as will be seen in Chart XXXIX.
The importance of the trade of the Philippines with the
United States can be determined from the table on page 401,
which shows the exports of the United States to the principal
countries in the years 1918 and 1919.
Just as the United States has found a most excellent
market for its goods in the Philippines, so have the Islands
disposed of their products to the United States. Jn Chart XLI
it will be seen that in 1918 sixty-five per cent of the value
of the export trade from the Philippines went to the United
States. In 1914 the percentage was fifty per cent; in 1908,
before the Payne tariff became effective, it was about thirty
per cent. The value of the United States market to the Phil-
ippines is even better illustrated in Chart XLIII, which takes
into account the great increase in the value of exports from
the Philippines. From 1908 to 1914 the increase was from
$19 441 603
322 940 837
$95 390 695
93 167 530
4 969 54 9
976 696 797
883 734 921
8 843 882
22 908 50
2 573 832
Italy . . .
496 174 736
477 898 774
103 801 757
6 381 964
101 641 460
25 216 242
Russia in Europe