Consul-General Wildman, of Hong-Kong, in his report for 1900 to the State Department, Washington, said: "There has been, during the past year, quite an investment of Hong-Kong capital in Manila; but it is the general opinion that _no investment in mines or agriculture_ in the Islands _will be of any great value until the introduction of Chinese labour_ is not only _permitted_ but _encouraged_."

Section IV. of the Chinese Exclusion Act of 1902 provides that every Chinese labourer rightfully in any insular territory of the United States (Hawaii excepted), at the time of the pa.s.sage of this Act, shall obtain, within one year thereafter, a certificate of residence, and upon failure to obtain such certificate he shall be deported; and the Philippine Commission is authorized and required to make all regulations necessary for the enforcement of this section in the Philippine Islands. No restriction is placed upon their movement from one island to another of the Philippines, but they cannot go from the Philippines to America.

The regulations established by the Insular Government (Act of March 27, 1903) in conformity with the above-cited Act are as follows: The Chinese can leave the Islands and return thereto within a year. They must obtain a certificate of departure and be photographed. To re-enter the Islands they must procure a certificate of departure at the place of embarkation (usually China) for the Philippines. Thus, during the year ending June 30, 1902, 10,158 Chinese entered Manila, and 11,432 left it with return certificates. Chinese resident in the Islands must be registered. The first banishment for contravention of this regulation took place on January 6, 1905.

For a long time there was a big contraband business done in Chinese. A coolie would pay as much as 400 pesos premium to find himself where he could earn up to 100 pesos per month. The contraband agent in China was an ex-Custom-house officer. The Manila agent was in the Customs service, and the colleagues on the China side were high officials. When the conspiracy was discovered the agent in China came to Manila to answer the charge, and was at once arrested. A prosecution was entered upon; but after a protracted trial, the proceedings were quashed, for reasons which need not be discussed. The Exclusion Act is so rigidly upheld that in the case of a Chinese merchant who died in the Islands leaving a fortune of about 200,000 pesos, his (Chinese) executor was refused permission to reside temporarily in the Colony for the sole purpose of winding up the deceased's affairs.

The social position of the Chinese permitted to remain in the Islands has changed since the American advent. In former times, when the highest authorities frowned upon the Chinese community, it was necessary to propitiate them with bags of silver pesos. There was no Chinese consul in those days; but Chino Carlos Palanca was practically the protector and dictator of his countrymen during the last decade of Spanish rule, and, if a cloud descended upon them from high quarters, he used to pa.s.s the word round for a dollar levy to dissipate it. In February, 1900, Chino Palanca was made a mandarin of the first cla.s.s, and when his spirit pa.s.sed away to the abode of his ancestors his body was followed to interment by an immense sympathetic crowd of Celestials. This pompous funeral was one of the great social events of the year. Now there is a Chinese consul in Manila whose relations to his people are very different from those between Europeans and their consuls. The Chinese consul paternally tells his countrymen what they are to do, and they do it with filial submission. He has given them to understand that they occupy a higher position than that formerly accorded to the Chinese in this Colony (_vide_ Chinese, Chapter viii).

On my first visit to Manila alter the American occupation I was struck to see Chinese in the streets wearing the pigtail down their backs, and dressed in nicely-cut semi-European patrol-jacket costumes of cloth or washing-stuffs, with straw or felt "trilby" hats. Now, too, they mix freely among the whites in public places with an air of social equality, and occupy stall seats in the theatre, which they would not have dared to enter in pre-American times. The Chinese Chamber of Commerce is also of recent foundation, and its status is so far recognized by the Americans that it was invited to express an opinion on the Internal Revenue Bill, already referred to, before it became law. The number of Chinese in the whole Archipelago is estimated at about 41,000. When an enterprising American introduced a large number of jinrikishas, intending to establish that well-known system of locomotion here, the Chinese Consulate very shortly put its veto on the employment of Chinese runners. The few natives who ran them became objects of ridicule. The first person who used a jinrikisha in Manila, with Chinese in livery, was a European consul. Other whites, unaccustomed to these vehicles, took to beating the runners--a thing never seen or heard of in j.a.pan or in colonies where they are used in thousands. The natural result was that the 'rikisha man bolted and the 'rikisha tilted backwards, to the discomfort of the fool riding in it. The attempted innovation failed, and the vehicles were sent out of the Colony.

Apart from the labour question, if the Chinese were allowed a free entry they would perpetuate the smartest pure Oriental mixed cla.s.s in the Islands. On the other hand, if their exclusion should remain in force beyond the present generation it will have a marked adverse effect on the activity of the people (_vide_ pp. 182, 411).

At the period of the American occupation the _Currency_ of the Islands was the Mexican and Spanish-Philippine peso, of a value constantly fluctuating between 49 and 37 cents. gold (_vide_ table at p. 647). The shifty character of the silver basis created such an uncertainty in trade and investment transactions that the Government resolved to place the currency on a gold standard. Between January 1 and October 5, 1902, the Insular Treasury lost $956,750.37 1/2 from the fall of silver. A difficulty to be confronted was the impossibility of ascertaining even the approximate total amount of silver current in the Islands. Opinions varied from P30,000,000 upwards. [297]

Pending the solution of the money problem, ineffectual attempts were made to fix the relative values by the publication of an official ratio between gold dollar and silver peso once a quarter; but as it never agreed with the commercial quotation many days running, the announcement of the official ratio was altered to once in ten days. Seeing that ten days or more elapsed before the current ratio could be communicated to certain remote points, the complications in the official accounts were most embarra.s.sing. Congress Act of July 1, 1902, authorized the coinage of subsidiary silver, but did not determine the unit of value or provide for the issue of either coin or paper money to take the place of the Mexican and Spanish-Philippine pesos in circulation, so that it was quite inoperative. Finally, Congress Act of March 2, 1903, provided that the new standard should be a peso equal in value to half a United States gold dollar. The maximum amount authorized to be coined was 75,000,000 silver pesos, each containing 416 grains of silver, nine-tenths fine. The peso was to be legal tender for all debts, public and private, in the Islands, and was to be issued when the Insular Government should have 500,000 pesos ready for circulation. The peso is officially alluded to as "Philippine currency," whilst the popular term, "Conant," derives its name from a gentleman, Mr. Charles Conant, in whose report, dated November 25, 1901, this coin was suggested. He visited the Islands, immortalized his name, and modestly retired.

The "Philippine currency," or "peso Conant," is guaranteed by the United States Treasury to be equal to 50 cents of a gold dollar. The six subsidiary coins are 50, 20, and 10 cents silver, 5 cents nickel, and 1 and 1/2 cent bronze, equivalent to a sterling value of one shilling to one farthing. This new coinage, designed by a Filipino, was issued to the public at the end of July, 1903. The inaugurating issue consisted of 17,881,650 silver pesos, in pesos and subsidiary coins, to be supplemented thereafter by the re-coinage of the Mexican and Philippine pesos as they found their way into the Treasury. For public convenience, silver certificates, or Treasury Notes, were issued, exchangeable for "Conant" silver pesos, to the extent of 6,000,000 pesos' worth in 10-peso notes; another 6,000,000 pesos in 5-peso notes, and 3,000,000 pesos in 2-peso notes, these last bearing a vignette of the Philippine patriot, the late Dr. Jose Rizal. On December 23, 1903, the Governor reported that "not till January 1, 1904, can the Mexican coin be demonetized and denied as legal tender value." A proclamation, dated January 28, 1904, was issued by the Insular Treasury in Spanish and Tagalog to the effect (1) that after October 1, 1904, the Government would only accept Mexican or Philippine pesos at the value of their silver contents, and (2) that after December 31, 1904, a tax would be levied on all deposits made at the banks of the above-mentioned coinage. Notwithstanding the publication of numerous official circulars urging the use of the new peso, the Mexican and Spanish-Philippine dollars remained in free circulation during the first six months of 1904, although rent and certain other payments were reckoned in "Conant" and current accounts at banks were kept in the new currency, unless otherwise agreed. Naturally, as long as the seller was willing to accept Mexican for his goods, the buyer was only too pleased to pay in that medium, because if, for instance, he had to pay 10 Mexican dollars, and only had "Conant" in his pocket, he could call at any of the hundred exchange shops about town, change his 10 "Conant" into Mexican at a 5 to 20 per cent. premium, settle his bill, and reserve the premium. Almost any Far Eastern fractional coins served as subsidiary coins to the Mexican or Spanish-Philippine peso, and during nine or ten months there were no less than three currencies in use--namely, United States, Mexican (with Spanish-Philippine), and "Conant." It was not practicable to deny a legal-tender value to so much Mexican, and Spanish-Philippine coin in circulation. The retailer was required to exhibit in his shop a card, supplied by the munic.i.p.ality, indicating the exchange-rate of the day, and declaring in Spanish, English, and Tagalog as follows: "Our prices are in American currency. We accept Philippine currency at the rate of..."; but the reckoning in small-value transactions was so bewildering that, in practice, he would accept any coinage the purchaser chose to give him at face value. From August 1, 1904, when the "Internal Revenue Law"

(_vide_ p. 630) came into operation, merchants' and bankers' accounts and all large transactions were settled on the new-currency basis. Many retailers followed the lead, and the acceptance of the new medium thenceforth greatly increased. Still, for several months, provincial natives were loth to part with their old coin at a discount, or, as they plainly put it, lose 10 to 20 per cent. of their cash capital at a stroke. The Insular Treasurer therefore issued another circular in December, 1904, stating that whosoever engaged in business should make use of the old coinage in trade transactions after December 31, 1904, without special licence, would be condemned to pay not only that licence, but a heavy fine, or be _sent to prison_; and that all written agreements made after October, 1904, involving a payment in old currency, would pay a tax of 1 per cent. per month from the said date of December, 1904. Nevertheless, further pressure had to be exercised by the Civil Governor, who, in a circular dated January 7, 1905, stated that "it is hereby ordered that the Insular Treasurer and all provincial treasurers in the Philippine Islands shall, on and after this date and until February 1, 1905, purchase Spanish-Filipino currency, Mexican currency, Chinese subsidiary silver coins, and all foreign copper coins now circulating in the Philippine Islands at _one peso_, Philippine currency, for _one peso and twenty centavos_, local currency."

As late as March, 1905, there was still a considerable amount of old coinage in private hands, but practically the new medium was definitely established. The total number of "Conant" pesos in circulation in the Islands, in the middle of May, 1905, was 29,715,720 (all minted in America), and "Conant" paper, P10,150,000.

From the time of the American occupation up to May, 1902, the two foreign banks--the Hong-Kong and Shanghai Banking Corporation and the Chartered Bank of India, Australia, and China (_vide_ Banks, p. 258)--were the only depositaries for the Insular Treasury, outside the Treasury itself. In the meantime, two important American banks established themselves in the Islands--namely, the "Guaranty Trust Company," and the "International Banking Corporation." On May 15, 1902, the "Guaranty Trust Company" was appointed a depositary for Philippine funds both in Manila and in the United States; and on June 21 following the "International Banking Corporation" was likewise appointed a depositary for the Insular Treasury, each being under a bond of $2,000,000. These two banks also act as fiscal agents to the United States in the Philippines. [298]

In 1904 the position of the "Banco Espanol-Filipino" (_vide_ p. 258) was officially discussed. This bank, the oldest established in Manila, holds a charter from the Spanish Government, the validity of which was recognized. The Insular Government sought to reduce the amount of its paper currency, which was alleged to be three times the amount of its cash capital. Meanwhile, the notes in circulation, representing the old Philippine medium, ceased to be legal tender, and were exchanged for "Conant" peso-value notes at the current rate of exchange.

For a short period there existed an establishment ent.i.tled the "American Bank," which did not prosper and was placed in liquidation on May 18, 1905, by order of the Gov.-General, pursuant to Philippine Commission Act No. 52 as amended by Act No. 556.

In February, 1909, the terms of Article 4 of the Treaty of Paris (_vide_ p. 479) will lapse, leaving America a freer hand to determine the commercial future of the Philippines. It remains to be seen whether the "Philippines for the Filipinos" policy, promoted by the first Civil Governor, or the "Equal opportunities for all" doctrine, propounded by the first Gov.-General, will be the one then adopted by America. Present indications point to the former merging into the latter, almost of necessity, if it is desired to encourage American capitalists to invest in the Islands. The advocate of the former policy is the present responsible minister for Philippine affairs, whilst, on this work going to press, the propounder of the latter doctrine has been justly rewarded, for his honest efforts to govern well, with the appointment of first American Amba.s.sador to j.a.pan.

Trade Statistics

Total Import and Export Values (exclusive of Silver and Gold)

Period. Imports. Exports. Total Import Excess Excess and of Imports. of Exports.

Export Trade.

Annual Average. Gold $. Gold $. Gold $. Gold $. Gold $.

1880-84 19,500,274 20,838,325 40,338,599 -- 1,338,051 1885-89 15,789,165 20,991,265 36,780,430 -- 5,202,100 1890-94 15,827,694 19,751,293 35,578,987 -- 3,923,599

Year.

1899 13,113,010 12,306,912 25,479,922 746,098 -- 1900 20,601,436 19,751,068 40,352,504 850,368 -- 1901 30,279,406 23,214,948 53,494,354 7,064,458 -- 1902 32,141,842 23,927,679 56,069,521 8,214,163 -- 1903 32,971,882 33,121,780 66,093,662 -- 149,898

Great Britain and the United States are the most important foreign markets for Philippine hemp, the distribution of shipments in 1850 and in five recent years having been as follows:--

Hemp Shipments To United States, United Kingdom, and Other Countries

Year. To United States. To Great Britain. To Other Countries. Total.

Tons. Tons. Tons. Tons.

1850 7,387 1,092 323 8,802 1899 26,713 21,511 26,808 75,092 1900 20,304 46,419 22,715 89,438 1901 30,336 82,190 11,731 124,257 1902 60,384 44,813 6,303 111,500 1903 69,912 59,189 8,651 137,752

Hemp Shipments

Year. Total.

Tons.

1850 8,802 1855 14,936 1860 24,812 1865 24,862 1870 30,535 1875 32,864 1880 49,934 1885 52,141 1890 63,269 1895 104,040 1896 95,736 1897 112,755 1898 99,076 1899 75,092 1900 89,438 1901 124,257 1902 111,500 1903 137,752

Total Chief Exports from the Philippine Islands

1885. 1886. 1887. 1888. 1889. 1890. 1891. 1892. 1893.

Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons. Tons.

Sugar

Manila 65,678 84,204 83,469 91,628 92,856 48,071 73,296 67,996 107,003 Cebu 28,195 18,140 17,815 16,694 11,862 3,455 8,762 18,388 16,962 Yloilo 109,609 83,456 77,847 76,997 114,207 96,000 85,104 165,407 137,716

Total 203,482 185,800 179,131 185,319 218,925 147,526 167,162 251,791 261,681

Hemp

Manila 43,927 39,268 56,709 71,881 59,455 56,201 68,256 87,778 70,174 Cebu 8,214 7,192 7,663 11,298 11,616 7,068 11,087 11,035 10,010

Total 52,141 46,460 64,372 82,679 71,071 63,269 79,343 98,813 80,184

Sapan-wood

Manila 2,911 1,885 962 750 574 1,385 880 1,574 3,332 Yloilo and Cebu 1,100 2,943 4,260 5,853 4,018 1,415 3,317 2,207 1,586

Total 4,011 4,828 5,222 6,603 4,592 2,800 4,197 8,841 4,918