PHILIPPINE ISLANDS 617 and cultivated. In the small percentage of land available for agriculture which is at present under cultivation, extremely primitive methods are in use. Among restrictions imposed by act of Congress which affect the situation is that limiting the amount of land that an individual may purchase to 16 hectares, or about 40 acres. Many Americans who would be glad to purchase and operate farms which would serve as valuable examples to native cultivators are unable to do so on account of the restrictions. The 40-acre clause prohibits absolutely the establishment of sugar, coffee, hemp, rice, and cocoanut plantations. The most important product of the islands is Manila hemp. It is a natural monopoly of the islands, since, up to the present time, all attempts to grow it elsewhere have proved unsuccessful. Enormous areas of available land are not in use, and the greater part of the land on which hemp is cultivated might yield a greatly increased product. The introduction of irrigation will make the planting of hemp possible in many districts where it is unknown, and the perfection of a machine for the extraction of the fibre will increase the output by nearly one-third, so that the hemp industry in the Philippines seems destined to show great development. A rapid growth has already been shown by the amount exported, 128,474 tons, valued at $21,781,803, having been shipped in 1905, as compared with 50,696 tons, valued at $4,931,882, in 1880. The exportations in 1890 and 1900 were, respectively, 50,530 tons, worth $7,494,195, and 89,259 tons, worth $13,300,841. It seems probable that the exports of hemp will amount in time to the value of a hundred million dollars annually. Sugar is the article of second importance in the production of the Philippine Islands. The production amounts at a maximum to about 350,000 tons, and the export to about 100,000 tons annually. The enlargement of the area which sugar-producing estates may control, and the bringing into cultivation of large sugar areas now utilized, together with the employment of modern machinery, will increase the output many fold. The total value of the sugar exported from the Philippines in 1905 to all parts of the world amounted to about $5,000,000, which was only about 3 per cent. of the value of sugar brought into the United States from foreign countries. Tobacco, the third crop in importance, is exported in comparatively small quantities on account of the large consumption among the inhabitants. In the last thirty years the value of the exportations has never reached $3,000,000, and has frequently fallen below $2,000,000. In 1905 the value of the leaf tobacco exported was $1,367,212, of cigars $892,561, and of cigarettes $14,250. The leaf tobacco went mainly to Spain and Austria-Hungary, and none was sent to the United States. Of the cigars, only an amount valued at $14,114 went to the United States. The chief point of interest to the United States in regard to the Philippine tobacco industry is the question whether wrapper tobacco of the quality imported from Sumatra may be produced in the islands. The cocoanut and its products form a rapidly increasing percentage of the exports from the Philippine Islands. Copra, or the dried meat of the cocoanut, ranks third in the exports, and in recent years has occasionally exceeded the PHILIPPINE ISLANDS sugar exportations in value. The field is one without competition. The fats produced in European factories from copra find a ready sale in the Tropics, where they have displaced those derived from animal margarin, and where pure dairy butters cannot be used. The conversion of cocoanut oil into dietetic compounds is a recent discovery, so that there is an unlimited demand for copra where none existed before. Formerly the dried meat of the cocoanut was not exported, but the nuts themselves were shipped in limited quantities. Prior to 1894 the exports of cocoanuts and copra together had never reached $1,000,000 in value. In 1905 it was $3,244,703, and in the fiscal year 1906, $4,043,115. Devastation of the coffee plantations by insects has reduced a formerly flourishing industry to comparative insignificance. Coffee was on a par with tobacco in the exports of the Philippines up to 1890. It is possible, however, that the scientific methods employed by the Dutch in Java will afford relief from the pests and that the prosperity of the coffee areas may be reestablished. The islands should produce a large share of the $75,000,000 to $80,000,000 worth of coffee imported annually into the United States. In 1905 the exportations of coffee were valued at $2482, which was less than one-tenth of 1 per cent. of the total value of the exports of the archipelago. The production of cacao is also susceptible of extensive development. This industry has already proved highly profitable in spite of crude and wasteful methods. Cacao cultivation is widely distributed over all sections, but almost the entire output is usually consumed by the inhabitants. An indication of the rapid increase in favor gained by cacao products is the fact that whereas the importations into the United States amounted to only $3,000,000 in 1896, they mounted to nearly $10,000,000 in 1906. MANUFACTURES. Cloth-making is the principal household industry of the Philippines, but a cotton mill in Manila, with modern spinning and weaving machinery operated by steam power, was the only establishment in the archipelago in which other than primitive methods were employed in cloth-making at the time the census was taken. The three principal varieties of cloth are sinaneay, jusi, and piña. Split bamboo is extensively used for making mats, rugs, carpets, saddles, covers for packages, hats, cigar cases, etc. The manufacture of cordage from hemp has been carried on in a small primitive way for many years. The manufacture of tobacco is an important industry, in which modern machines are employed. Salt is produced in considerable quantity by the simple process of evaporation. Soap is made from vegetable oils. The building of ships and boats for coastwise transportation is carried on to a considerable extent in the larger islands. There are a few foundries and machine shops. Saddlery and harness are manufactured in several of the leading towns. Industries almost entirely restricted to Manila are blacksmithing, bolo-making, wagon and cart-making, carriage building, tailoring, shoemaking, baking, confectionery manufacture, and the production of ice, brick, lumber, furniture, matches, pottery, etc. Alcohol is distilled in considerable quantities from sugar and the sap of the nipa palm, and tuba and bino, native beverages, are obtained from the cocoanut and the buri palm. Among the semi-agricultural industries the production of sugar, vegetable oils and essences, and indigo are the most important. Many commodities are imported into the Philippines which ought to be manufactured there in quantities sufficient to meet the demand. Among these are lumber and refined sugar. A new sugar refinery, however, has been established, and a marked decline in the value of the sugar imports was shown in 1907. Shipyards, rope-making plants, and cement works could also be established at the greatest advantage. A plant for the manufacture of cocoanut oil, opened in 1906, almost meets the local demand for the oil and by-products of the cocoanut. According to the census of the Philippines, published in 1905, the value of the manufactured products, exclusive of sugar, was 35,097,209 pesos for the year, representing capital to the amount of 36,226,085 pesos invested in 2184 industrial establishments. Half the capital was invested in Manila. Half of 1 per cent. of the population are engaged in manufacturing. The leading products were: Tobacco, cigars, and cigarettes, 8,698,634 pesos; ships and boats, 4,499,170 pesos; liquors, distilled, malt, and other fermented, 4,388,319 pesos; lumber, sawed, 2,736,754 pesos; bread and other bakery products, 2,084,106 pesos; gas and electric light and power, 1,461,143 pesos; printing and publishing, 1,024,338 pesos; cleaning rice, 1,010,965 pesos; foundry and machine shop products, 968,225 pesos; ice, manufactured, 862,742 pesos; men's clothing, custom made and repairing, 559,788 pesos; soap, 551,585 pesos; hats and caps, 507,015 pesos; carriages and wagons, 477,957 pesos; brick and tile, 457,790 pesos. The value of the sugar products, placed at 6,603,006 pesos, does not include the output of small establishments whose product was less than 1000 pesos. The establishments tabulated numbered 1075, and represented invested capital to the amount of 16,933,495 pesos. COMMERCE. According to a report on the commerce of the Philippines, issued in 1907 by the United States Bureau of Statistics, prior to the American occupation the share of the imports drawn from the United States averaged from 2 to 4 per cent., those from the United Kingdom from 25 to 38 per cent., those from Germany from 3 to 6 per cent., Spain from 8 to 24 per cent., China from 10 to 20 per cent., and those from Hongkong and the British East Indies from 10 to 25 per cent. Since the American occupation the share of the imports drawn from the United States has increased rapidly, forming 19 per cent. in 1905, 16 per cent. in 1906, and 17 per cent. in 1907. The value of the total imports of the Philippines from all parts of the world in the fiscal years 1906 and 1907 were, respectively, $25,799,266 and $28,785,855, and the other exports for the same periods totaled respectively at $31,917,134 and $33,713,357. British ships carry 60 per cent. of the imports and 75 per cent. of the exports. Spanish ships take second rank, German third, and American fourth, handling about 9 per cent. of the imports and a smaller percentage of the exports. Unless immediate action is taken by American shipbuilders the act approved April 30, 1906, forbidding the carriage of passengers or merchandise in the Philippine trade by foreign ships will have to be repealed, in accordance with the recommendation of the Philippine Com mission. The value of the chief commodities in the trade with the United States for the calendar years 1905, 1906, and 1907 is given in the accompanying tables. COMMUNICATIONS. A requirement of the most fundamental importance to industrial development is the increase of facilities of transportation. Railroad lines are particularly essential on account of the great distances commodities have to be taken for shipment from the_few safe harbors. In 1905 the Manila-Dagupan Railway, 120 miles in length, was the only line in operation. It had a tributary population of 700,000, and paid a net income of 16 per cent. on the fixed cost of construction. In 1902 and 1903 franchises were granted to this company for the construction of 85 miles of additional railway, which is now in operation. Under an act passed by Congress in February, 1905, a concession was granted by the Philippine Government for the construction of 426 additional miles of railroad in the island of Luzon. Concessions for 283 miles in Panay, Cebu, and Negros were granted with a guaranty by the government that 4 per cent. interest for thirty years should be paid on bonds covering 95 per cent. of the cost of construction. At the end of the fiscal year 1907 there were 205 miles of railroad in operation and 709 miles under construction, making a total of 914. Inter-island traffic is promoted by the maintenance of steamers on thirteen routes, under subsidies aggregating annually about $100,000. These provisions were made in accordance with an act designed to encourage and aid the Philippine coastwise trade, to secure the carriage of the mails, government freight and passengers by commercial vessels under contract, to effect uniform reasonable rates for the government and public, to increase the safety, standards, and service of contracting vessels, and for other purposes. In compliance with this act the office of the superintendent of inter-island transportation was opened July 1, 1905. FINANCE. The Philippine Government has been self-sustaining since its installation. The various governmental departments, including schools, scientific institutions, the construction and maintenance of roads, bridges, and public buildings, the maintenance of a constabulary at the strength of five or six thousand men, and other activities have been supported by the Philippine revenues. The expenses of those portions of the army and navy stationed in the islands have been met by the government of the United States. The amount of funds in the Philippine treasury on June 30, 1906, available for purely administrative purposes was $3,087,345.42, exclusive of funds derived from refundable collections and bond issues. The insular net revenues for the fiscal year ending June 30, 1906, excluding all articles of a refundable character, were $11,468,067.16. The net ordinary insular expenditures, including interest on bond issues, and contributions made to the city of Manila and to the provinces in lieu of land taxes, cancellation of loans to provinces, and contributions for provincial administrative purposes were $10,146,779.12. The excess of insular revenues over expenditures was $1,321,288.04. Provincial revenues, including the contribu tions received from the insular government and from the Congressional relief fund, were $4,509,572.02. The ordinary provincial expenditures, |