HC 455 P55 UC-NRLF *i_ 11 35fi CM '&-i#- GIFT NOV 10109-* ECONOMIC RESOURCES AND DEVELOPMENT OF THE PHILIPPINE ISLANDS . OF THE ^UNIVERSITY OF PHILIPPINE COMMERCIAL AGENCIES GRAND CENTRAL PALACE NEW YORK CITY PRICE, $0.50 MERCHANTS EXCHANGE BUILDTNG SAN FRANCISCO, OAL. 1920 >W - ^ By Domingo B. Paguirigan. S ^\* r ^jr Bureau of Internal Revenue, Manila, P. I. Tobacco was introduced into the Philippines by Spanish mission- aries coming from Mexico during the last quarter of the sixteenth century, shortly after the establishment of Spanish sovereignty. The production of tobacco, however, did not become a real industry until 1781, when the Spanish Government enforced its exclusive rights to traffic in the product and when the production and sale of the com- modity were formally made a state monopoly. This monopoly lasted throughout the hundred years from 1783 to 1883. Under government control every detail of the industry, from the preparation of the seed beds to the marketing of the leaf or its products, was strictly super- vised by qualified officials. In the field, there was a chief appraiser, styled " interventor" residing at the provincial capital, who had forces of subordinates known as " alumnos ajoradores" These officials were further administratively aided by the municipal " caudillo " (head man), who was also the " gobernadorcillo " (little governor), and by his "tenientes" (lieutenants, or overseers). Penalties were inflicted' 17 upon growers who failed to observe the instructions or orders issued by the Government. The crop produced by a grower was limited by the Government according to the size of his family and cured only in especially built drying sheds. The product therefore gained an enviable reputation for quality. But hard and strict as the measures regulating the grow- ing and curing of tobacco were at that time, the natives, soldier-like, soon became accustomed to the discipline. As a proof of this fact, later on, when it was rumored that the system was to be abolished, most of the native growers energetically opposed its discontinuance to such an extent that even the friars advocated their cause. Only the scandalous abuses and the graft which generally prevailed among the subordinate officials finally led to the absolute abolishment of the system. During the existence of the tobacco monopoly, it was the chief source of income to the Government, and even in its irregular last year it yielded enough to cover about 50 per cent, of the total budget of expenditures. Contrary to expectation, once the force which had compelled the growers to follow fixed regulations was withdrawn, the methods of production gradually went from bad to worse. The planters ignored quality for quantity, and the general results were that good practices were more or less neglected. However, the planters should not be too much blamed, for the prevailing method of buying tobacco even to-day is based chiefly on weight, the standard being the Spanish quintal, which is equivalent to 46 kilos, or about 102 pounds. Competition is so keen among the buyers that they do not take the proper time to examine the quality of the crop, but simply offer a price for each lot as a whole. In 1909, when the United States Congress passed the Payne Bill, which includes a provision admitting Philippine tobacco into the United States free of duty, contrary to the belief that such a privilege would help restore the value of our tobacco, matters went unfavorably. The causes of failure of Philippine tobacco in the United States proved to be matters and incidents which a timely pre-acquaintance with Amer- ican business ways could have easily prevented. The farmers were allowed to grow their tobacco as they pleased. Leaves from the provinces came to the factories in Manila in awful mixtures, and on account of rush orders from America the leaves were used without being thoroughly sorted. One of the inevitable results following such practices was that the identity of the cigar brands became lost. A brand cannot be identified unless it is made of the same color and grade of leaf or leaves, so that the flavor will be uniform and peculiarly dis- tinguishable from that of other makes. 18 On account of the extremely big orders, which Manila manufac- turers were not used to, the same error committed by the growers in producing for quantity instead of for quality also prevailed in the cigar factories. Barely trained apprentice cigar makers were employed in the manufacture of export cigars. The factories were kept working even nights. Colors cannot be easily distinguished in their true shades by artificial light. Philippine manufacturers did not realize that they were dealing with shrewd American business men. Neither did they realize that the production and manufacture of tobacco is also one of the greatest American industries. No attempt was made to distribute Philippine cigars uniformly throughout the United States, though it is really no air castle to suppose that out of every 1,000 American smokers it is possible to find at least 20 who either already like the mild aroma of Philippine tobacco or who would learn to like it had they but a chance to get the cigars. Our manufacturers just turned their cigars loose. They did not stop to think that many of those who formed the vanguard of American importers were not as friendly to the incoming of Philippine tobacco as they seemed. Manila cigars were sold at a nickel, in many cases even at a loss, in an effort to make the American smoking public believe that Manila cigars are of cheap stuff. Smaller importers of good faith, not being able to stand against cut prices of the bigger importers, had to cease handling Manila cigars. Another peculiar fact that contributed to the failure of Manila cigars imme- diately following the passing of the Payne Tariff Law was the inability of Manila manufacturers to supply the American public with large stocks. These circumstances resulted in substitution on the part of some American jobbers, cheap and low-grade American cigars being labeled as " best Manilas " after the stock of Manilas became exhausted. The Insular Government, seeing the deplorable condition of the trade after six years of such competition, enacted a law in February, 1916, " to improve the methods of production and the quality of tobacco in the Philippines and to develop the export trade therein." This law proved to be of inestimable value to the development of the Philippine tobacco trade, by establishing a system of inspection for leaf and manu- factured tobacco and at the same time carrying on an advertising cam- paign intended to bring home to the American importer the good quality of Philippine tobacco. For the purpose of furthering the advertising campaign, it was found practicable to entrust this work to Mr. C. A. Bond, who is well known to the tobacco trade and who has had experience in the Philip- pines, having been at one time a ^newspaper man in Manila. Since the passage of that act, the trade has progressed apace, the exportation to the United States rising gradually from 114,006,745 cigars in 1916 to 216,124,310 in 1917, and 264,871,253 in 1918. This increase is a happy 19 omen that the Manila cigar is gaining popularity in the United States market. Prior to 1916 the amount of Philippine leaf tobacco exported to the United States was negligible, but during 1916 this export item increased to almost twelve times the amount of 1915 and more than twenty times that of 1914. In 1918 leaf exportations to the United States reached 2,957,264 kilos, an amount representing a decrease in comparison with 3,283,264 kilos exported during the previous year. The greater number of cigars exported and the limited quantity of the 1916 and 1917 crops were responsible for this condition. The actual exportation of Philippine leaf tobacco to the United States has been as follows during recent years : Kilos 1914 20,683 1915 39,637 1916 633,771 1917 3,283,607 1918 2,957,264 The European War contributed to the increased demand for Manila cigars on account of the large supplies of tobacco products sent to Europe and because of the fact that a large number of hands formerly engaged in the tobacco factories in the United States had to be diverted to war activities. The cigar that has appealed most to the American smoking public is the 5-cent Manila. During 1918 several complaints were received that musty cigars were arriving in the United States, and in most cases the blame has been placed on both the manufacturer and the Government. Act 2613, although guaranteeing the tobacco products exported to the United States, sets limitation on this guarantee. These complaints, however, need investigation, considering the fact that the average price per thousand paid for Manila cigars in 1918 was 43.68 pesos, as com- pared with 38.25 pesos paid in 1917. Through the Bureau of Agriculture the Government is determined to procure greater production and higher quality of tobacco. Curing under proper methods is required by law. A five-year testing project has been undertaken in Isabela Province, with the following aims in view : 1. Isolation by selection of the highest grade strains from local varieties. 2. To obtain, by constant testing, strains of the highest heredi- tary value. 3. Distribution of selected seed. 4. Production of standard wrapper tobacco by : a. Seed selection. b. Cultural methods. c. Hybridization d. Acclimatization of foreign wrapper tobacco. 20 5. Constant testing of wrapper strains. 6. Study and control of tobacco pests. 7. Curing experiments. 8. Miscellaneous experiments. 9. Extension work with the co-operation of the tobacco in- spectors on behalf of wrapper tobacco production. While the work at the Tobacco Experiment Station is progressing, the farmers are being instructed, and expert seed selection and other approved cultural methods are being demonstrated to them by specially qualified Government tobacco inspectors. As the results of investiga- tions and the propaganda campaign being undertaken by the Bureau of Agriculture, Nueva V.izcaya, a province heretofore growing hardly any tobacco, was found to possess soils and a climate similar to those of Isabela, and consequently was induced to grow tobacco on a large scale, so that now it is one of only three provinces in the islands that produces the tobacco from which standard brands of cigars are exclu- sively made. It is expected that other regions suitable for the growing of superior tobacco will be located. Although tobacco is grown prac- tically in every region of the Philippines, the Government is determined to limit the manufacture of standard cigars from leaves produced only in regions peculiarly suited for the production of cigar tobacco. The Cagayan Valley is the Vuelta Abajo of the Philippines. Evidence of the justice of this claim lies in the fact that by many the present product is considered so good as to be unsurpassed in spite of prevail- ing haphazard methods. The standard Manila smoke guaranteed by the Government is noted for its mild, free-burning and aromatic quality. The naturally agree- able flavor of Philippine tobacco makes the employment of chemists in the Manila tobacco factories unnecessary. In America thousands and thousands of smokers now believe that " Manila cigars are selling on their merits, and not on their prices." The Philippine Government affixes to each box of Manila cigars sent to the United States an official inspection label certifying that the cigars are made by the Spanish hand process, packed under modern sanitary conditions, under the supervision of competent Government officials, and that upon arrival in the United States every box of " Manilas " is in proper condition. There are splendid opportunities for the investment of capital in tobacco growing in the Philippine Islands. The Cagayan Valley, which is the region where the finest tobacco is grown, is unequaled for its natural advantages. This valley lies between two mountain ranges situated in the northern part of the Island of Luzon and contains a tobacco belt about 150 miles long and varying width up to 10 miles. 21 The valley is inundated annually to a depth of from 5 to 40 feet, and there is a consequent annual deposit of silt amounting to several inches in thickness. Under these conditions, artificial fertilizers are unneces- sary and so unknown in this district. Many thousands of acres of choice tobacco land are lying idle and unoccupied on the banks of this " Nile of the Philippines." These lands are a part of the public domain and are open to occupancy under the homestead law or by purchase. By purchase the price would be about $2 per acre, and this nominal price may be paid in installments, a total period of five years being allowed. Corporations are limited to 2,500 acres of this land. Outside of some ten or twelve large plantations, practically the entire tobacco crop in the Cagayan Valley is grown by the 28,000 small planters having holdings of three or four acres. Labor in the valley is scarce, but the Government is ready to aid through its established agencies in securing laborers from the thickly- populated districts on a contract basis. If the owner of a large planta- tion will have proper regard for the social and hygienic welfare of his laborers and treat them with fairness in their business relations, in a short time a loyal and intelligent force can be trained in the proper methods of cultivation. Experiments with such methods have shown an increased yield of such superior quality that it is certain that if some of the attention and care which is bestowed upon leaf tobacco in other countries were bestowed upon Philippine leaf, the Cagayan Valley could produce cigar filler the equal of Havana in popular estimation, and wrapper leaf the equal of the famous Sumatra. To-day there is hardly sufficient leaf of the needed quality for the local markets. In 1916 the 10,000,000 Filipinos who inhabit the Archipelago smoked some 80,500,000 tax-paid cigars and 4,135,000,000 cigarettes. Every year since 1904, when the Internal Revenue Law took effect, the consump- tion has greatly increased. Not only is there the ever-growing domestic market to be considered; there is the European market, which in the past has been a steady purchaser of large quantities of leaf, and in spite of the war has absorbed a quantity only slightly less than in years before. Now that peace has come, a substantial increase in the European demand is to be reasonably expected. The annual acreage and production of tobacco are given below from figures prepared by the Division of Farm Statistics of the Bureau of Agriculture : Acres. Pounds. 1912 ...: 140,948 65,219,646 1913 , . . 170,477 101,545,657 1914 150,549 102,809,218 1915 131,809 84,264,780 1916 144,574 90,506,183 1917 152,549 107,642,966 1918 193,832 135,421,708 22 COCONUT GROWING AND COPRA. By M. J. de la Rama, Manager, Philippine Commercial Agency, San Francisco, California. The coconut tree is a palm of the species " cocos nucifera." It thrives in almost all tropical lands, chiefly the Philippine Islands, Dutch East Indies, Straits Settlements, Ceylon and South Sea Islands. There are approximately 70,000,000 coconut trees in the Philippine Islands, about 40,000,000 of which are bearing trees, producing nearly 1,000,000,000 nuts per annum. Approximately 900,000,000 of these nuts are made into copra. The total acreage devoted to coconuts is about 750,000. This area is only a slight fraction of the total land adapted to coconut growing. Of the total area of 120,000 square miles of the Philippine Archi- pelago, only 14,000 square miles are to-day planted to crops or other- wise cultivated. This vast extension of uncultivated land will give an idea of the tremendous opportunities for the establishment of coconut plantations, which can be started almost anywhere in these rich tropical islands. Excellent land under the public domain and specially adapted to coconut growing can be leased or purchased from the Government at nominal prices. The clearing and planting of the land does not require a great amount of initial capital. No other crop produced by man is reaped with more certainty and marketed with less labor and expense after the initial cost has been incurred. Because of the permanency of the trees when planted in a region free from typhoons a coconut. in bearing constitutes a crop virtually as constant and undying as the earth on which it stands. The tree gets into bearing after five or six years after planting, and constantly thereafter for practically " all time to come." The trees give best results when planted about 125 to the hectare, or 50 to the acre. They may be relied on with reasonable assurance to produce in the fifth year ten nuts each, worth, at a conservative esti- mate, about 2 cents per nut, or a return of about $10 per acre. The sixth year the trees should produce about 40 nuts each; the seventh year about 60 nuts each ; the eighth year about 80 nuts each ; and the ninth year about 100 nuts each. The trees reach their most productive period at about twenty years after planting, and this period lasts until about the fortieth year. During this period from 125 to 150 nuts may be expected from each tree as an average production. Many trees under favorable conditions produce, during this period, 200 to 300 nuts per year. The record yield is said to be 470 nuts from one tree in a year. There is said to be but slight diminution in the yield of a mature tree until it is almost a hundred years old. 23 The planter is not compelled to wait for returns on his investments until his coconut trees begin to produce, as he can raise corn, beans, peanuts or hemp on the same land on which his young coconut plants are growing. The coconut is a plant of many uses. The trunk is sometimes used as pillars or posts of Philippine houses. The ribs of the leaves are used for making brooms. The fibrous outside shell of the nut or coir is chiefly used for household fuel and sometimes in the manufacture of rope, mats, ship caulking materials, etc. The hard shell of the nut was found to be valuable during the war as a source of a chemical substance which was used in making gas masks. These shells are often used to make drinking cups and similar utensils. The sap of the bud is a good source of alcohol. Copra. Copra is the dried meat of the coconut and is prepared for the purpose of producing coconut oil. To prepare copra, the coconut is split and the meat partially dried while in the shell ; the meat is then removed and the drying completed. Drying is done either by the sun or artificially. Classes and Output of Copra. There are three classes of copra. " Sun-dried," as its name indi- cates, has been thoroughly dried in the sun. This is the best grade. " Fair merchantable Manila " is copra which was partially or imper- fectly dried when received in Manila and which has been re-dried. Low-grade copra is that which is smoked and scorched and is rancid. The modern method of drying copra is by means of the copra dryers, which do not expose it to dampness or smoke. The Philippines produce one-third of the world's output of copra. Up to the year 1918 almost all of the copra produced was exported. In 1919 the quantity of copra exported was only half of that of 1918. In 1919 the Islands exported $4,400,000 worth of copra, but imported $3,200,000 value from other countries. The establishment during the latter half of 1918 of oil mills absorbed the greater part of the copra produced locally. Before the year 1918 copra was exported mainly to the United States and France, where it is crushed and manufactured into oil. The general scarcity of tonnage caused by the war affected the exporta- tion of copra, and it was found much more profitable to establish oil mills in the Philippines and export the finished product instead of the raw material. Copra is a bulky product, while oil is heavy and compact and is much more handy to transport. For instance, a vessel loaded with ten 24 thousand tons of copra will supply the world with about six thousand tons of coconut oil, but loaded with oil itself, that same vessel will take away some sixteen thousand tons. The saving, therefore, in freight is tremendous. An enormous increase in the demand for vegetable oil caused by the depletion of the war supply of animal fats raised prices to unprece- dented figures. During the war coconut oil was used in making glycerine, which entered into the manufacture of explosives. Coconut oil is now used for butter substitutes, laundry and toilet soap, vegetable lard, salad oil, etc. Copra Cake and Coconut Oil. Copra cake is the meat of the coconut after the oil has been expelled. It is used for feed of cattle, poultry and hogs. Also as fuel and fertilizer. There are now in operation in the Philippines about forty oil mills, with a daily capacity of about two thousand tons of oil. The greater part of the oil produced in the Philippines enters the United States in the Pacific Ports, especially San Francisco. There are extensive storage facilities along the Pacific Coast at San Francisco, Seattle and Portland. Great as has been the development of the industry during the past three years, the Philippines are to-day only at the threshold of her economic development. Coconut oil has come to stay in the world's markets. It is fast replacing animal fats and even other vegetable oils. The uses to which it can be put are increasing every day. With millions of acres of idle lands specially suited to coconuts in the Philip- pines, this rich tropical Archipelago will always lead the world in the production of this commodity. The investor's opportunities in the coconut industry are in the establishment of coconut plantations rather than in the manufacture of coconut oil. There are now more oil mills than copra to be had, with the result that keen competition has caused the prices of copra to rise to unprecedented heights. As it takes at least six years for the coconut to get into bearing, the supply of copra cannot be immediately increased to cope with the increased demand. The small investor can purchase a piece of land in the Philippines, start a coconut grove, and after six years he will be assured of good returns which will increase year after year. Due to the permanency of the crop and the very little amount of care it demands, the investor is assured a good income during his life- time and that of his grandchildren and great grandchildren. 25 ESTIMATE FOR DEVELOPMENT OF 2,500-ACRES COCONUT PLANTATION, UTILIZING HEMP CULTIVATION TO FINANCE COCONUT'S DEVELOPMENT IN DAVAO, COTABATO, LANAO OR ZAMBOANGA PROVINCES. By Lt. Col. H. F. Cameron, Engineers Corps, U. S. Army. The essentials for a successful coconut plantation as pertains to . maximum bearing are as follows : (a) Well drained soil with water table near the surface. Low-lying land (over 100 feet above sea level to be avoided), near ocean. (b) Irrigation to carry tree production through droughts and to increase number and quality of nuts. (c) Freedom from winds which tear the flowers, nuts and even fronds from the trees in latitudes above 8 degrees. (d) Protection from wild hogs, rhinoceros beetles and bud rot. (e) Dependable labor. (f) Well-distributed rainfall. (g) Temperature of 70 degrees Fahrenheit and over, (h) Good transportation facilities. (i) Efficient management. All these necessary economic factors to success prevail except b, d, h and i, which are dependent upon the management and his backing. The uses of coconut oil and its by-product, the meal cake, are increasing rapidly. A careful research through the library and files of the Department of Foreign and Domestic Commerce, Washington, D. C, in addition to personal investigations made by the writer in the West Indies, Hawaii, Borneo and all over the Philippine Islands, failed to disclose any tropical countries in the world where such extraordinary production results obtained as those in the above named provinces of the Philip- pines, All statistical tabulations show that in tree production the Philippines rank first, with an average of 90 nuts per tree year. Eight year old trees in the irrigated section of a hemp plantation, in which the writer is interested, have a record of 180 nuts a year — one mile from sea water, 30 feet above sea level, a 15-foot alluvial soil on a clay base, and having full advantage of rain and irrigation moisture. The estimated number of nuts to make a picul (137^ lbs.) of coprax vary from 175 in Davao (Mrs. Burchfield's record), 200 at San Ramon Penal Colony (Coconuts — The Consuls of the Pacific), to 300 to 400 in Laguna and Tayabas Provinces, Philippines. 26 Manila hemp fibre can be grown nowhere else in the world. It is a staple article of commerce. Its only known enemies are drought, wind and wild pigs or deer. These losses by wind or typhoon north of these areas are an annual occurrence — but not here'; the drought insurance necessitates irrigation, and the losses by animals can be pre- vented by fencing. Labor for stripping abaca is a prime necessity, but in a development of this nature the supply secured for the preliminary development can easily be converted to stripping as needed. Irrigated hemp reaches stripping age inside two years and will produce 15 to 20 piculs of fibre a year per acre. The procedure to develop 2,500 acres of coconuts is for the seed coconut beds to be started while hemp suckers are being planted. The coconuts are planted on 30-foot centers while the hemp is planted in east and west lines — to permit the sun to have full play — 24 and 6 foot centers alternately north and south and 8-foot centers east and west. By this method the maximum of 400 hills of hemp and 50 coconut trees per acre will result. The hemp production begins at eighteen months after planting, while coconuts begin at the fifth year, the hemp thinning out as coconuts age. The estimated unit (2,500 acres) development cost and returns out- lined is taken from actual records in Davao Province of present-day conditions. To be conservative, coconut trees are assumed to produce 90 nuts a year, or one-third of a picul of coprax a tree per year (16 piculs a year an acre), while hemp is estimated at 15 piculs per acre a year — this for irrigated areas which insure regular production. Coprax market value is assumed at $5, though it seldom reaches the low level, while hemp market value is assumed at $15 for Davao grades (our prices averaged $37.75 in 1917, $25 in 1918 and $21 for the first quarter of 1919), and interest on money invested at 6 per cent. The profit values at these figures are $3 a picul (a dollar a tree a year) for coprax and $3 a picul for hemp. The actual plantation cost to harvest and market, including over- head, of the hemp (AA and BB grades for Japanese trade) on a 100,000 hill hemp plantation in Davao Province is $12 a picul, while to harvest and market coprax is $2 a picul on a small plantation but cheaper on a large, modern-equipped plantation. This 2,500 acres that will be developed in three years — 1,000 acres first year and 750 each of the next two following years is purchased public land. FIRST YEAR. Debit. Credit. First payment on 2,500 acres of land at $2 $1,000 00 Clearing, plowing, etc., 1,000 acres at $2 2,000 00 Purchase of 50,000 coconut seed at $0.06 3,000 00 Purchase of 400,000 hemp seed at $10 M 4,000 00 Planting of 50,000 coconuts 250 00 27 Debit. Credit. Planting of 400,000 hemp $1,200 00 Fencing 1,000 acres at $3 \ 3,000 00 Tools and animals 10,000 00 Superintendence and Administration 20,000 00 Superintendent $8,000 00 Three Assistants at $1,800 5,400 00 Cashier and Bookkeeper 2,400 00 Office force and stationery 2,500 00 18,300 00 Miscellaneous — Land surveys, roads, wharf, launch, etc. 15,000 00 Supply, drainage, doctor, medicine, insurance, etc 15,000 00 Irrigation system 20,000 00 Superintendent's bungalow 2,000 00 White men's quarters 1,500 00 Laborers' barracks, first year 1,500 00 Office building and store with stock 5,000 00 Tool and cattle shed 1,500 00 Hospital and equipment 5,000 00 Interest on $100,000 at 6 per cent 6,000 00 $100,250 00 Revenues. Profit from store $10,000 00 $100,250 00 $10,000 00 Deduct credit 10,000 00 == $90,250 00 SECOND YEAR. Second payment on 2,500 acres $1,000 00 Clearing, plowing, etc., 750 acres at $2 1,500 00 Maintenance of 1,000 acres at $1.25 1,250 00 Purchase of 35,000 coconut seed at $0.06 2,100 00 Purchase of 300,000 hemp seed at $10 M 3,000 00 Planting 35,000 coconuts 175 00 Planting 300,000 hemp 1,500 00 Fencing 750 acres at $3. 2,250 00 Tools and animals 5,000 00 Superintendence and Administration 20,000 00 Laborers' barracks 1,500 00 Irrigation maintenance 3,000 00 Miscellaneous 10,000 00 Interest on $150,000 at 6 per cent 9,000 00 $61,275 00 Revenues. Profit from store $10,000 00 $61,275 00 $10,000 00 Deduct credit 10,000 00 — Cost for second year $51,275 00 THIRD YEAR. Third payment on 2,500 acres $1,000 00 Clearing, plowing, etc., 750 acres at $2 1,500 00 Maintenance of 1,750 acres at $1.25 2,187 50 Irrigation maintenance 5,000 00 Purchase, planting, etc., of 35,000 coconut and 300,000 hemp seed 7,000 00 28 Debit. Credit. Animals and tools $3,000 00 Fencing 750 acres at $3 2,250 00 Sorting and baling sheds for hemp m 7,000 00 Superintendence and Administration 20,000 00 Miscellaneous 10,000 00 Interest on $200,000 at 6 per cent 12,000 00 $71,937 50 Revenues. Profit from store $10,000 00 Profit from six months' hemp cleaning, one-half (1,000 acres— 15 piculs X $3) 22,500 00 $71,937 50 $32,500 00 Deduct credit : . . 32,500 00 — = $39,437 50 FOURTH YEAR. Fourth payment on 2,500 acres $1,000 00 Animals and tools 3,000 00 Maintenance of 2,500 acres at $1.25 3,125 00 Irrigation maintenance 6,000 00 Superintendence and Administration 20,000 00 Miscellaneous 10,000 00 Interest on $200,000 at 6 per cent 12,000 00 $55,125 00 Revenues. Profit from store $10,000 00 Profit from 1,750 acres at 15 piculs (26,250 piculs at $3) 78,750 00 $88,750 00 Deduct expenditures — 55,125 00 Balance (represents 17 per cent, on $200,000 capitaliza- tion) $33,625 00 FIFTH YEAR. Final land payment $1,000 00 Maintenance, 2,500 acres 4,000 00 Animals and tools 3,000 00 Superintendence and Administration 25,000 00 Irrigation maintenance 6,000 00 Miscellaneous 10,000 00 Interest on $200,000 at 6 per cent 12,000 00 $61,000 00 Revenues. Profit from store $10,000 00 Hemp from 2,500 acres at 15 piculs— 37,500 piculs— 37,500 piculs at $3 112,500 00 $122,500 00 Deduct expenditures —61,000 00 Balance (represents 30 per cent, on $200,000 invest- ment) $61,500 00 29 SIXTH YEAR. Debit. Credit. Maintenance of 2,500 acres coconuts $5,000 00 Irrigation maintenance 6,000 00 Superintendence and Administration 25,000 00 Animals and tools 3,000 00 One-half cost coprax dryer construction 10,000 00 Miscellaneous 10,000 00 Interest on $200,000 at 6 per cent 12,000 00 $71,000 00 Revenues. Profit from store $10,000 00 Hemp from 2,500 acres at 12 piculs (hemp thinning out) —30,000— profit at $3 a picul 90,000 00 $100,000 00 Deduct expenditures 71,000 00 Balance (represents 15 per cent, on $200,000 invest- ment) $29,000 00 SEVENTH YEAR. Maintenance of 2,500 acres of coconuts $5,000 00 Irrigation maintenance 6,000 00 Animals and tools 3,000 00 One-half cost on coprax dryer 10,000 00 Superintendence and Administration 25,000 00 Miscellaneous 10,000 00 Interest on $200,000 at 6 per cent 12,000 00 $71,000 00 Revenues. Profit from store $10,000 00 Hemp from 2,500 acres at 9 piculs per hectare — 22,500 piculs— profit, 22,500 at $3 67,500 00 Coprax from 39,000 trees at one-third picul per tree — 16,333 piculs— profit, 16,333 piculs at $3 48,999 00 $126,499 00 Deduct expenditures 71,000 00 Balance (represents 27 per cent, on 200,000 capitaliza- tion) $55,499 00 Note. — Would advocate developing plantation from all capital rather than part income, using hemp income for dividends on capitalization. Concluding Remarks. The plantation in full bearing, say tenth year, will have 120,000 coconut trees — 50 acres reserved for roads, buildings, etc. The annual expenditure now should not exceed $55,000, while the profit should at a minimum be $120,000 (trees x one-third piculs x $3 profit per picul) — $55,000 = $65,500, or approximately 32 per cent, on a $200,000 capitalization. This profit can be greatly increased by an oil mill installation that would provide for using products of neighboring planters as well, and for acting as purchaser for neighboring small planters. 30 The actual value of a coconut plantation fully developed in coconuts will be close to $750,000 judging from prices that the Japanese are paying for Davao plantations. From recent " British and Australian Report on the Trans-Pacific," the following data on Fiji and Solomon Islands was obtained: " Trees (coconut) bear in four years and full bearing in six years, and produce eight to ten hundredweight (Spiculs) of coprax a year per acre. The average price is 21 pounds 6 shillings and 3 pence per 1,000 kilograms (2,220 lbs., or 17 piculs), with a profit of 10 pounds a ton (16 piculs)." This is slightly over $3 a picul. Common estimates in the Philippines are by trees, each tree to give a net return from $1.50 to $2.50 per year. In the Solomon Islands swamp ground is planted with ivory nuts with large profit. From " Coconuts — Consuls of the Pacific," are found statements that coconut plantation development in the Federated Malay States costs 35 to 40 pounds ($175 to $200) an acre, and in the West Indies about $200. Data as to land costs and as to class of land developed do not permit of a fair comparison. PINEAPPLES. By Helene H. Wilson, Publicity Secretary, Philippine Commercial Agencies. Philippine pineapples are no longer an experiment. They are of good size and sweeter in flavor than even those of Hawaii, when properly cultivated. Land Available. The extensive uncultivated sugar cane lands have been found to be well adapted to pineapple growing. The Government of the Philippines leases through the Bureau of Lands parcels of 100 hec- tares each (2.471 acres) at a cost of 25 cents per hectare, or approxi- mately 12^ -per acre per annum. It is also selling land at from $4 to $10 per hectare. Preparing the Soil. Pineapples require a sandy, friable, or loamy soil. They should never be planted in heavy clay. The chocolate-colored clay soil will grow pineapples but the expense of cultivation is much higher than when planted in sandy or loamy stretches. Before planting the soil should be plowed at least 8 inches deep. This operation should be repeated three times, and the area should then be harrowed twice. Moisture Demanded by the Plants. An annual rainfall of from 50 to 65 inches evenly distributed throughout the twelve months is required for successful growing of 31 pineapples. Where this amount of rainfall is not recorded the land should be irrigated. If the tract is adjacent to one of the numerous rivers or creeks this is not a difficult proposition. However, in many instances it will be necessary to sink wells for irrigation purposes. A good well will cost on the average of $50. Varieties of Pineapples Best Suited to the Philippines. The Smooth Cayenne variety has proven to be best suited to Philippine soil and climatic conditions and for commercial purposes. In Mindanao pineapple planters, even with slight care, and none too careful cultivation, produced fruits weighing from 7^2 to 8 pounds. These are too large for canning purposes; as nothing over a 4j^-pound fruit is desired for canning purposes. Other varieties which have been successfully tried out are Queen, Cabezona, Sugarloaf and Abaka. Methods of Cultivation. The use of tractors for cultivation, as well as preparation of the soil, is advocated. A 12 H. P. tractor is well adapted for the prepara- tion of the soil and a small motor plow of from one to two H. P. is especially suitable for cultivation, and also for making furrows where irrigation is necessary. Estimate of Cost of Establishment of a 20-Hectare Pineapple plantation. Land at $10 per hectare (if purchased) $200 Preparation at $12.50 per hectare 250 Seeds 250 Planting 500 Cultivation at $5 per hectare (for each crop) 100 Irrigation at $5 per hectare (for each crop) 100 Total $1,400 Labor. Laborers, who have been trained in the pineapple plantations and canneries of Hawaii, are to be found in practically all sections of the Philippines. These men know their business and with competent supervision may be depended upon to do their part. Transportation . The Manila Railway Co. offers good inducements in the way of rate terms to pineapple growers. On the other hand, if the plantation 32 is located too far away from the railroad it is well to provide for motor transport. Markets. The fruit is popular in the local markets, also in China and Japan. A large importing firm of San Francisco has offered to act as agent for all Philippine pineapple products shipped into the United States markets. The Philippine pineapples have less acid contents and require less sugar for preservation purposes than those produced in other tropical countries. PHILIPPINE COFFEE. By Fidel A. Reyes, Director, Bureau of Commerce and Industry. The rise and final decline of the coffee industry in the Philippine Islands offers a very interesting study. Prior to 1890, coffee was an important product of several provinces of the Islands and constituted a source of considerable wealth in these sections. In 1890 and for several preceding years it ranked fourth in order of importance among exports, being in value only a little lower than tobacco and representing the following percentages of the entire export values : 7.4 per cent, in 1890, 7.1 in 1889, 7.7 in 1888, 8.3 in 1887 and 5.3 in 1886. Subsequent to 1890, due to the devastation of coffee plantations by insects and diseases, Philippine production rapidly diminished and finally almost ceased. Exports of coffee in 1893 were only one-half of 1 per cent, of all exports, and since that time its production and exportation have been merely nominal. At present, according to local dealers, there is no coffee of native growth on the Philippine market. In what wa> at one time one of the chief sources of the world's supply, only imported green and prepared coffees are found. It was in south central Luzon that Philippine coffee was produced in greatest quantities prior to 1891. Plantations covering thousands of acres existed in the Provinces of Laguna, Batangas, Cavite and Tayabas, and some in Misamis and Cotabato, in Mindanao Island ; but Batangas, in the central part of Luzon, led all the provinces in this crop. That the production of coffee was enormously profitable is testified to not only by living planters, but by evidences of decadent wealth still visible in the coffee-growing centers. Since 1891, however, its history has been only a repetition of that of all coffee-growing countries in the Orient invaded by the leaf spot fungus and root borer. Philippine coffee compares well with that of Java or Martinique, and there are certain localities capable of producing coffee which. 33 according to experts, can be compared only to that of Mocha. The natural conditions of the Philippines for growing this crop are un- excelled elsewhere in the world, so that the possibility of the industry's re-establishment offers very bright prospects. The collapse of the in- dustry was not the fault of the country, but of those engaged in its production. If the producers will only profit by the example of Java, once disease-resisting varieties have been planted, undoubtedly coffee will resume its former flourishing state in the Islands. Java was. until 1S80, the second largest coffee-producing region of the world. Then came the same disease which a little later swept the coffee plantations of the Philippines as if by a fire. The production of Java coffee was reduced from a surplus of 1,000,000 pounds to barely enough for home consumption. Dutch planters interested in the maintenance of the plantations brought careful, scientific treatment to the then existing conditions of blight and insect diseases. They have so far re-established their coffee industry that it now produces an annual output of nearly 40.000.000 pounds and commands the highest prices in the markets of the world. The Dutch producers of coffee in Java solved the problem by planting disease-resisting varieties, largely effecting the restoration of the in- dustry without recourse to other more difficult attempts to hold in check the disease by application of sprays. Similar methods applied in the Philippines would result in the re- establishment of the coffee industry of these Islands. The large areas known to be available for successful cultivation suggest that with proper attention they may be able to produce a considerable share of the $75,000,000 or $80,000,000 worth of coffee imported into the United States each year. The following table gives the quantities and values of coffee exports from 1880 to 1889, the period when this product was sent abroad in considerable amounts. Values are given in pesos, as m other tables in this article : Year. Kilos. Value. 1880 1881 1882 1883 18&4 1885 1886 1887 1888 1889 1.363,957 "54 KB£I7 5.602^*1 1.167,096 hip 1.284,405 1.471.014 5,4673a 990.41c 7.136.303 2.098410 fc3»£S3 6310,635 2A~ Since 1889 no data on Philippine coffee production have been avail- able except for the years 1910 to 1912. when the production was 72.254 34 and 65,948 kilos, respectively. This may be explained by the fact that coffee was grown principally for experimental purposes — to see if the plant would produce berries or not — rather than for commerce. The amount of production might be judged, however, from the Bureau of Customs reports, which show that enough was produced to allow some margin for export, although this so declined that in 1916 it amounted to only one peso. The export figures for the fiscal years ending June 30, from 1899 to 1912, were as follows : Year. Kilos. Value. 1899. 1900. 1901. 1902. 1903. 1904. 1905. 1906. 1907. 1908. 1909. 1910. 1911. 1912. 3,030 1,454 1,350 738 610 24,102 3,112 13,232 5,758 2,756 5,586 5,104 3,598 3,184 2,452 1,138 970 672 576 On the other hand, the importation of coffee has gradually increased from year to year, until in 1917, 1,406,612 kilos were brought in, at a value of 837,252 pesos. The total value of coffee imported into the Philippine Islands since 1899 amounts to 6,866,793 pesos, as is shown below : Year. Quantity. Value. 1899 153,857 lbs. 68,430 1900 . 24,358 lbs. 5,214 1901 22,412 lbs. 6,550 1902 998,198 lbs. 178,534 1903 777,557 lbs. 123,472 1904 396,857 lbs. 70,804 1905 1,252,736 lbs. 229,156 1906 1,057,884 lbs. 183,886 1907 : 1,451,893 lbs. 278,800 1908 1,726,088 lbs. 331,590 1909 2,023,217 lbs. 402,180 1910 2,632,041 lbs. 558,988 1911 1,673,364 lbs. 408,406 1912 2,234,594 lbs. 640,346 1913 2,137,430 lbs. 673,249 1914 1,106,621 kilos 694,768 1915 879,194 kilos 484,781 1916 1,104,413 kilos 690,332 1917 1,406,612 kilos 837,252 Total 6,866,893 35 Coffee requires a climate whose average temperature ranges be- tween 16 and 24 degrees Centigrade, standing next to sugar cane in its high heat requirement. In localities having both heat and moisture, its growth is stronger and more luxuriant, as is manifested in various ways. In very hot climates the coffee plant grows well, but needs the. shade of some other suitable tree, whereas in cooler climates it thrives best without this protection. The soil most suitable for its cultivation is one that is light and moist, but not marshy. Reddish soils, somewhat sandy, or black soils, without too much clay, are adaptable. If the land is virgin soil it should be thoroughly cleared, plowed deeply two or three times, and then harrowed; if the land is old it should be well fertilized. Philippine coffee, though stated by some to rival in quality that of Java, does not seem to have received such recognition in the markets of the world. Prices during the years of highest production were only about 7 cents a pound. On account of the diminishing production of the latter 80's, however, prices showed great increases, and export values, in spite of reduced quantities, came to exceed 3,000,000 pesos, representing an importance and degree of prosperity for the industry in tragic contrast with the single peso's worth of coffee exported in 1916. The chief consumers of Philippine coffee have been Spain, the United Kingdom and the United States, together with a confused but important China-Hong Kong trade. Spain has been a consistent con- sumer when she could get the product, and in the period of greatest and declining production, her share of the total exports ranged from one-third to two-thirds. The China-Hong Kong trade has been of about equal importance to that of Spain, though in the reduced figures of the early 90's it amounted only to about half the Spanish. The United Kingdom was the largest consumer of Philippine coffee during the greater part of the 70's, but of the increased quantities of the 80's she took smaller shares. The United States' purchases were heaviest in earlier times, reaching 1,359,707 pounds in 1866. After 1880, in but the single year of 1883 did they amount to as much as 100,000 pounds. Of the insignificant exports since American occupation, the States have taken about a third, China being the largest consistent purchaser of the quinquennial periods. Much has been said recently of the revival of the industry and of the aid of an American import duty on coffee in connection with free trade for the Philippine product as a means to this end. The disposi- tion in certain circles is to treat this once profitable industry as an asset in the plans under consideration for bringing prosperity to the Islands. It may be so regarded, in a way, for the rich returns of the coffee plantations and the suitability of the soil and climate are matters of 36 record ; but it is to be borne in mind that coffee plantations, with their rich returns, are of slow growth, requiring outlays of capital and from six to twelve years of patient attention and waiting for the first realiza- tion of these returns. Extensive investments of this character do not seem probable, with the memory of the calamity of fifteen years ago still fresh, and especially in view of the fact that scientific research seems to have failed thus far to find a means of successfully combating the scourges that have destroyed the industry. Not until some means are found to prevent the repetition of that disaster, and even then, not for some years, does it seem probable that there will be any large return of confidence and capital to the planting of coffee on such a scale as to make it again an important factor in the agricultural wealth of the Islands. The future of the Philippine coffee industry seems for the present to be in the hands of the scientist and the agricultural expert. Particular interest is therefore attached to the importation of coffee seeds into the Islands, and the final outcome of experimental plantings under the control of the Bureau of Agriculture will probably have a strong bearing on the future of this great potential industry. Circum- stances leading up to the inception of this planting enterprise were the outgrowth of petitions addressed to the Bureau of Agriculture, request- ing that efforts be made to re-establish this once dominant crop. Pro- vincial nurseries have been established throughout the Islands, the main aim of which is to show the superiority of the " robusta " and the " liberica " species, both blight resistant, over the " arabica." With the successful development of these reconstructive enterprises, and considering the popularity of coffee as a beverage at home and abroad, there should be little doubt that the industry will some time resume its former flourishing state. The following statistics of the consumption of coffee in the leading countries in 1904 show what a vast market is open the world over for this product. It is safe to say that consumption has increased rather than decreased since that time : Pounds. United States 960,879,000 Germany 396,205,000 France 167,552,000 Belgium 125,411,000 Austria-Hungary . 108,687,000 Holland 28,930,000 United Kingdom 28,783,000 Canada 6,189,000 37 HEMP, THE PREMIERE INDUSTRY OF THE PHILIPPINES. By Arsenio N. Luz. Hemp is considered the premiere industry of the Philippine Isl- ands, not only because it occupies the front rank of the major exports of our country, but also because nature granted us through climatic and soil conditions the natural monopoly over hemp or " abaca " grow- ing. Hemp represents millions of dollars in investment and revenue and provides a living for two million Filipinos or nearly one-quarter of the entire population./ The importance of this industry is naturally measured by the volume of production and export and to this end we are giving the official statistics showing each annual production by provinces for the years 1910, 1911, 1912, 1913, 1914, 1915, 1916, 1917 and 1918 on page 38. XHemp is a fibre obtained from a banana-like plant known as " abaca," which grows only in the Philippine Islands. It is manu- factured into high grade cordage and used in shipping and construc- tion operations throughout the world. Practically all Manila hemp is shipped and distributed through the New York and London markets/^ In pre-war times 40 per cent, went to the United States, 40 per cent, to the United Kingdom and 20 per cent, to the rest of the world, mostly Japan. War conditions dis- located these percentages and during the year 1917 55 per cent, of this Manila fibre was exported to the United States, 34 per cent, to the United Kingdom and 11 per cent, to the rest of the world. ^Previous to American occupation, the entire hemp business of the Philippines was in the hands of a few Manila firms, almost exclusively British. During the past 20 years American and Filipino firms have entered the market and now control one-third of the hemp business, dealing principally in the medium and higher grades (" I " and above) used in this country. British firms still control the bulk of the trade in the lower grades ("J " and below) used in the British and Con- tinental markets./ Prior to the war demands and consumption were in the proportion of 40 per cent, of the higher grades and 60 per cent, of the lower. The war demand stimulated production of the higher grades to 70 per cent, of the American and 30 per cent, of the British grades late in 1917. /It is to be noted that the usages of Manila hemp have multiplied and quite a portion of this fibre is used in the manufacture of clothes for local consumption, hats and slippers, only to mention the most important industrial uses in the Island. Braided abaca is also ex- ported, mainly to Japan and Europe, to be converted into dry goods. 38 23 §3 vo o onFj ^ o on .-3 J2 o 22 t-h © 2g ^h O On -3 2° S3 NOCMCMCMOOt^voTfr^vorfONoor^^oocM^pooT-ioooNTroNr-NiN. t^xiO Tf tJ-^u-5 CQ oo o »o CO CM CO CO ION 00 00 O »~l,VO fv^OO VO OiOfO ^"T-rT-rco"cM"vo~co"oo"vo"vovo"co"H*r"t>r CoC cm" .-To cm" \o cm"on~on On rf co co 3" t-h VO 00 -=t 00 vo 00 CM co TfiON--; no NO co i— i t-h co 00 no^cm co to © vn ON O Tf O0 f-i cm^ v o > »-J. 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Nevertheless, the writer's research work on various sugar plantation soils throughout the Archipelago and his ex- periments at the Government experiment stations have indicated that applications of fertilizers containing the proper amount of various plant food elements to make a " balanced ration " of these in an avail- able form would increase yields remarkably. / The soils vary greatly in texture. Some regions have heavy reten- / tive soils, which are very difficult to cultivate, except when the moisture ^scontent is just right. When too much water is present they cake and //become very hard, while if they are too dry, they break up into big clods. These soils are quite often well supplied with plant food mate- rial, because filtration of soil waters containing dissolved plant food material is retarded by their firmness. Another type of soil found in various sugar districts is a light sandy loam. Cane does extremely well in this, but fertilizers are often required for production of large crops. These soils are easily handled and are ordinarily preferred by experienced planters. The yield of sugar in the Philippine Islands is far below that which will be attained when the industry is carried on along more modern lines. Many lands now cultivated to cane have been planted to this crop year after year for half a century or more, with little attempt at 53 proper drainage, use of fertilizers, irrigation, deep plowing and sub- soiling, or even rotation with crops, adding humus and nitrogen to the soil. In fact, it is a general custom to burn off all plant material before plowing in order to facilitate this work. The lands have continued in a fair state of productivity, consider- ing the treatment they have received. The average yield to-day in the principal sugar districts is slightly less than 40 tons of cane, or approxi- mately four tons of finished sugar per hectare. The writer has proved at the experiment stations and plantations that this may be increased three-fold by modern methods. The coasts of the Islands on which sugar is produced are indented, and while some favorable landing places are found, most of these are suitable only for medium-sized vessels, due to shallow waters which extend out a great distance. In the old days " lorchas," or sailboats of less than 100 tons capacity, were used to transport sugar to the market center, Iloilo, for the Islands of Negros and Panay, but where modern central factories have replaced old mills, lorchas have given way to barges and small steamers, and in some places, where the dis- tance from land to deep water is not too great, long wharves have been constructed. This has been done at San Carlos, on the east coast of Negros, and at Pulupandan, on the west coast. While sugar cane may be grown, and in fact is grown to some extent in all of the provinces of the Philippines, yet its cultivation on a commercial scale is limited to those which have extensive level lands and rich soils. Distribution by provinces in 1919 was as follows : Provinces. Hectares. Provinces. Hectares. Negros Occidental 55,712 Ilocos Sur 5,559 Pampanga 34,458 Cebu 5,351 Batangas 24,138 Oriental Negros 2,996 Iloilo 15,553 Bulacan 5,004 Tarlac 8,846 Antique 4,540 Laguna 6,801 Mindoro 1,759 Four kinds of sugar are manufactured on a commercial scale, namely, refined, centrifugal test, bayong muscovado and pilon musco- vado. Only one factory, the Luzon Sugar Refinery, makes high-grade refined sugar. This factory, which is at Malabon, in Rizal Province, about seven miles north of Manila, has a maximum capacity of twenty- five tons of centrifugal sugar per day. Animal bone char has been used exclusively as the clarifying medium, but other forms of charred carbon will be substituted, if plans of the past, year materialize The three grades of crude sugar, centrifugal test, bayong and pilon, are used as the crude product in this factory. In case lower grades of muscovados and centrifugals are employed, melting and preliminary subsidation, and later, filtration through canvas bags are required before the sugary solution is passed through char-filters ; but where better grades of centrifugal test sugars are used, the crystals are dis- 54 solved and passed through char-filters, in a manner identical to that employed in American and European refineries. Three things operate against the success of the refining industry in the Philippines, namely, the high cost of fuel necessary in evaporation and recrystallization and drying, the limited local market for refined sugar and the long journey to American markets, which often results in the product becoming damp and deteriorating in quality. These adverse conditions are offset by the plentiful supply of raw material available at a reasonable price, as well as by the abundance of cheap labor. Centrifugal test sugar is made at centrals on large modern planta- tions for remelting in refineries as a source of standard granulated and cube sugar. In the manufacture of this sugar, the cane is passed through massive rolls which extract as high as 98 per cent, of the sucrose therefrom. The juice is then weighed, tempered or neutralized with lime, passed through a heater and settled, after which the clear supernatant liquor is passed to a large apparatus, termed " effects," where evaporation takes place under reduced pressure. In this the juice is reduced to the syrup stage, in which it still contains approxi- mately 50 per cent, of water. It is then passed to sugar boilers, where evaporation is continued until the solution becomes so concentrated that the sucrose is forced out of solution by crystallization. This heavy solution, termed " massecuite," is then spun in centrifugals, which causes the molasses to be separated from the crystals and increases the purity of the latter. This sugar is then washed in centrifugals until the desired polarization or percentage of sucrose is reached. By far the greater percentage of sugar manufactured in the Philip- pines in the past has been " bayong," or " mat " sugar. This is a type of open-kettle muscovado, made by the methods used in other sugar countries a century ago. The cane is crushed and the juice extracted by means of small, poorly-equipped mills. It is then tempered with a very crude grade of lime, and boiled in open kettles over a direct flame until reduced of its moisture content to a point where it can be handled in bags made from buri palm leaves. This sugar is graded from 1 to 5, according to the Government standards, as follows : No. 1 — A sugar polarizing 87 or above No. 2 — A sugar polarizing 85 to 86.9 No. 3 — A sugar polarizing 82 to 84.9 No. 4 — A sugar pdfarizing 80 to 81.9 No. 5 — A sugar polarizing 76 to 79.9 Lower than No. 5 is classed as " corriente," or current. Better grades of mat sugar are sold to the United States, Europe. Hong Kong and Japan and melted in refineries for use in making high- 55 grade refined sugar. The lower grades are shipped to China, or used by the poorer classes, while corriente is often made into alcohol. In general, it may be said that the sugar industry of the Philippine Islands offers exceptional opportunities for investors. The fertile areas which have not been cultivated, owing to lack of sufficient capital, are almost unlimited, and the regions now exploited in sugar production are, from our modern viewpoint, comparatively undeveloped. MINERAL AND FORESTRY RESOURCES. THE PHILIPPINE MINING INDUSTRY. By Frank B. Ingersoll, President, Philippine Exploration Company. Chinese writings of as long ago as the third century report gold as the chief product of Luzon, Island of the Philippine Archipelago. Activity in mining received a severe setback by the prohibition im- posed by the Spanish government in 1894. It was shortly prior to this time that European capital (mostly British) began to make mining investments in the Philippine Islands. These were confined almost entirely to Camarines Norte. One British concern planned operations on a large scale. Several quartz properties were opened up and con- siderable expensive machinery imported from England. Just when the project was getting fairly under way the Philippine insurrection of 1896 broke out. The English engineers in charge fled for their lives and the machinery and mine workings alike fell into disuse and decay. However, some of the machinery parts are still in evidence and have recently been made use of in operations. From the outbreak of the insurrection until the establishment of civil government by the United States in the Islands in 1901 mining languished. Nevertheless during the latter part of this period venture- some spirits — mostly ex-soldiers of the American army of occupation — were busily prospecting. Although they made efforts to stake and record claims by proceedings patterned after the practice in the United States, there was no legal recognition of such steps until after the passage of the Philippine Bill (the Act of Congress of July 1, 1902), which put a new Mining Code into effect. From that point there has been a steady growth in the mining indus- try, notwithstanding that there has been a scarcity of capital, a lack of transportation facilities, of reliable labor and of competent super- intendence, and insufficient and to some extent unfriendly laws, to- gether with a want of appreciation both by the Government and by the people of the importance of the industry. 56 Although prospecting and development were actively going on dur- ing the first few years of American occupation, the gold output did not reach appreciable figures until 1907 when it amounted to f*l 87,647. Thereafter there was a steady advance in production until it reached M,01 1,755 in 1916. In 1917 it fell down to 1*2,816,638 while for 1918 it will probably be still slightly less. The recent falling off in the output is largely due to war conditions which prevented continuous operation from lack of proper materials and supplies. Added to this there has been a decided letdown in the production from dredging. This has been confined entirely to one field — Paracale — where the alluvial deposits are being exhausted. Al- though attractive fields have been proven by testing in other districts. war costs have put a prohibition on any new installations. Recent gold mining is limited to three districts — Masbate, Ben- guet and Paracale. In Benguet there is but a single quartz mill oper- ating, while Masbate (Aroroy) has two. At Paracale five dredges are at work. The future of gold mining presents some difficulties, at least until operation costs have been cut down to something like normal. Con- ditions which increase the cost of operation often serve to change a paying mine into a losing one. This is well illustrated by the effects of the recent great war. The outlay for materials, supplies, labor and in fact for everything which enters into operation costs has been met by increasing the selling price of the product. As the selling price of gold always remains fixed, no remedy is open to the miner. His busi- ness, which pays under ordinary conditions, is now changed into a losing venture. It is not in the Philippines alone that gold mining has suffered in consequence of the war. The effects have been world-wide. In the United States many properties, operating on such a large scale that the total of profits was tremendous, have suspended operations, await- ing normal conditions. There is a great deal of discussion over the remedy to be applied and numerous suggestions have been put forward by operators and legislators. Without reviewing these here it is appar- ent that the Federal Government as well as those of the different min- ing states are determined not to permit a decline of this important industry. Suitable legislation and liberal treatment by administrative officials seems to be the program on every hand. Here in the Philippine Islands, there has in times past been con- siderable to complain of on the part of mining operators as to their treatment by the Government. Without rehearsing unpleasant his- tory it may fairly be summarized by stating that this status arose out of over zealousness on the part of certain administrative officials who 57 did not seem to realize the importance — from the Government's stand- point — of developing young industries. The present Government attitude, both legislative and administra- tive, has all the earmarks of being liberal— a constructive policy aimed toward building up all lines of industry and particularly those which tend to the development of the natural resources of the country. With a reasonable period of waiting to permit economic conditions to adjust themselves there seems no good reason why the gold pro- duction should not shortly resume its upward march. Undoubtedly the gold deposits of the Islands are widespread. Hardly a stream from whose sands some showing of gold cannot be panned. Only insignificant percentage of the mineral ore has as yet been properly prospected. While there are failures to record in mining operations there are other instances which demonstrate that mining can be car- ried on profitably. To summarize briefly what seems to be needed is more capital, with which, properly utilized, to do more thorough prospecting and preliminary development, to install more modern and effective equip- ment, to tide over temporary backsets, to procure more efficient man- agement and superintendence. Of the considerable number of mining engineers of prominence who have visited the Islands not one has condemned them but all have insisted on the great necessity of the measures above noted. This article has been limited to gold mining for the reason that there has been almost no mining development in other branches. How- ever, there are indications of valuable mineral deposits of various kinds throughout the Archipelago. There are strong showings of petroleum in Tayabas, Cebu and Mindanao. The indications are that it would pay to develop many of these deposits and the present era of prosperity and development should within the next few years witness a considerable production in sev- eral branches of the industry outside of gold mining. PHILIPPINE OIL FIELDS. By James J. Rafferty, Trade Commissioner of the Philip phi es in the United States. The existence of petroleum on Bondoc Peninsula is established by the presence of seeps of petroleum associated with inflammable gas at various places throughout the oil field. All the petroleum encountered so far is similar in character and of a good quality. It is of low specific gravity and contains a large proportion of light oils which would make it of relatively high value as a commercial petroleum. 58 The seeps are in highly inclined strata which are probably in all cases part of the structure of anticlinal folds. From this association it is believed that the petroleum in this field has, in accordance with the general law of petroleum accumulation, tended to collect in the crests of anticlines. The petroleum occurs, associated with certain horizons, in an ex- tensive series of beds of sandstone and shale (Vigo shale) which is similar in character to the oil-bearing rocks of productive fields, notable those of Japan. The principal seeps are found in the upper part of this series in a zone designated as the Bacau stage, which is pre- dominantly shale but which contains subordinate beds of sandstone. In its seepage, the petroleum is associated with the shale rather than the sandstone and may be observed in some cases to come directly from the shale. Beneath the surface, where closed lenses of sand- stone probably exist, the principal accumulation of petroleum would be expected in the more open, sandy zones. At the surface the light oil appears to have escaped readily from the coarse-grained beds and to have been retained only in the fine-grained shale. The petroleum may have originated, in part at least, in the Bacau stage of the Vigo shale where it is now found. Globigerina and other organic remains are found in the strata with which the oil is asso- ciated, the decomposition of which may have given rise to petroleum. There is a possibility, however, that the oil is not indigenous to the strata in which it now occurs but has migrated from its source to another horizon. Beds which are concealed so that they cannot be examined at the surface and which, consequently, may be the source of the oil which is now associated with the Bacau stage of the Vigo shale, occur at the Bondoc Peninsula. Appreciating the importance of the thorough exploration and de- velopment of the oil fields, the Philippine Legislature passed the fol- lowing measure March, 1919 : "AN ACT TO CREATE THE NATIONAL PETROLEUM COMPANY." Be it enacted by the Senate and House of Representatives of the Philippines in Legislature assembled and by the authority of the same : Section 1 — A company is hereby organized, which shall be known as the National Petroleum Company, the principal office of which shall be in the city of Manila, and which shall exist for a period of fifty years, from and after the date of the approval of this Act. Section 2 — The said corporation shall be subject to the provisions of the Corporation Law in so far as they are not inconsistent with the provisions of this Act, and shall have the general powers mentioned 59 in said Law and such other powers as may be necessary to enable it to drill wells for the development of petroleum deposits, and to work said deposits and sell the output thereof. Section 3 — The capital of said corporation shall be five hundred thousand pesos, divided into five thousand shares of stock having a par value of one hundred pesos each, and no stock shall be issued at less than par nor except for cash. Section A — The Governor-General, on behalf of the Government of the Philippine Islands, shall subscribe for not less than fifty-one per cent, of said capital stock, and the remainder may be offered to the provincial and municipal governments or to the public at a price not below par, which the board of directors shall from time to time de- termine. Ten per centum of the value of all stock subscribed shall be paid at the time of the subscription, and the balance thereof shall be paid at such time as shall be prescribed by the board of directors. The voting power of all such stock owned by the Government of the Philippine Islands shall be vested exclusively in a committee consist- ing of the Governor-General and the presiding officers of both Houses of the Legislature. Section 5 — The board of directors of the company shall consist of five members. Section 6 — There is hereby appropriated, out of any funds in the Insular Treasury not otherwise appropriated, such sum as may be necessary for the payment of the stock of the National Petroleum Company to be acquired by the Government of the Philippine Islands ; Provided, however, That the Insular Auditor shall not set up any sum or sums on his books until necessary to make the payment or pay- ments authorized by this Act; And, provided further, That unless otherwise provided by the Philippine Legislature, the sum available for investment during the year nineteen hundred and nineteen shall not exceed fifty thousand pesos, and a like sum shall be the maximum available for such investment during each subsequent year. Section 7 — This Act shall take effect on its approval. Approved, March 4, 1919. To date the work of the National Petroleum Company has been of an exploratory nature but it is anticipated- that the coming year will show many interesting developments. A recent investigation of the petroleum industry, made by the Government, discloses the fact that a number of oil companies have been incorporated in the Philippines but failed to operate their pro- jects. The following are the substantiated reasons for this condi- tion: 60 1. The majority of the companies did not have sufficient capital to adequately provide themselves with the necessary equipment and men. 2. Incorporators were timid about putting their money into the development work. 3. The necessity of competent technical men was not fully realized LUMBERING INDUSTRY IN THE PHILIPPINES. By Helene H. Wilson, Publicity Secretary, Philippine Government Commercial Agencies. Practically one-third of the total area of the Philippine Islands is virgin forest land, or approximately 40,000 square miles, with stands of from 15,000 to 35,000 board feet to the acre. Even stands of from 45,000 to 65,000 board feet to the acre are not uncommon at elevations of from one thousand to eighteen hundred feet above sea level. In addition to the foregoing there are close to 20,000 square miles of more or less scattering, cut-over and second growth forests, which are classed by the Bureau of Forestry as " Non-Commercial." In this area the stand does not average more than between two and three thousand board feet to the acre. It is from this second classi- fication that much of the present supply of timber and firewood for local use is taken. The commercial forests are located on the islands of Luzon, Min- doro, Samar, Leyte, Negros, Mindanao, Palawan and a number of the smaller islands. In fact, they predominate in all the principal islands except Bohol and Cebu. The composition of the forests from the botanist's point of view is very complex, but to the forester and the lumberman it is quite simple. About three- fourths of the total volume of the virgin forest is composed principally of trees of the dipterocarp, of lauan family, which furnish all the abundant export timbers of the islands. Tak- ing the forests as a whole, practically 90 per cent, of the standing tim- ber belongs to a group of different botanical species that enter the market under about half a dozen trade names. Development of the Industry. Tales of early Chinese adventure devote considerable space to the Philippines, their people, and records of trade in these by-gone centu- ries between the two countries — long before Magellan led the Spanish Armada on their conquest of the Far East. It is to these we must refer for our earliest records of the lumber industry in th# Philippine Islands. We find that even in those days the Chinese merchants ob- 61 tained logs of fancy cabinet woods and ship timbers from the Philip- pine forests and exported them to China for manufacturing purposes. The Spanish brought with them some ideas for the improvement of the lumbering industry, and we find that in the latter part of the fifteenth century a few small water, and later on steam power, mills were built. They followed to a great extent the old system of buying logs and sawing them only to order. Between ten and twenty years before American occupation three steam power mills larger than any theretofore attempted were erected at Manila. The Americans found the methods of lumbering to be primitive. The handling of the industry on a large scale was practically unknown. Individual trees were selected, felled, stripped of bark and sapwood, or else squared and the resulting poles or logs hauled out with teams of carabao (water buffalo). The hauling was done on crude carts or timber wheels, sledges, or by dragging the log over the ground with no more apparatus than an occasional skid or roller. Few improve- ments have been made even to-day by the small operators. The development of the industry during the past twenty years is a glowing record of achievement, in the face of almost unsurmountable difficulties. The first years were a series of heartbreaking experi- ences due in a large measure to the distance from the United States as a source of supplies; inadequate transportation of out-of-the-way places, and chaotic local market conditions. But having conquered all these manifold difficulties, the industry as it exists at present has gained a foremost place among typical American achievements in the Far East. The lumbering industry, ranking among the leading industries of the Islands to-day, has brought many blessings to the people other than attaining its own present importance. In Mindanao it has proved to be of genuine educational value. It has given to the local population permanent employment and the means for securing a con- tinuous and better food supply. Logging engines, railroads and other modern equipment have been introduced in the last fifteen years, and are now in use by all the large operators. Generally speaking, the managers, boss loggers, superin- tendents of logging railways, sawyers, saw-filers and yard bosses are Americans. The fellers, locomotive and stationary engineers, track layers, skidders, loaders, setters, operators of edgers, trimmers, resaws, planers and matchers are Filipinos and Chinese. Special attention is given to training for the more technical work of the lumbering indus- try in the Trade School, conducted under the direction of the Bureau of Education at Manila. 62 Accessibility and Transportation, The timber lands are often rough, but no more so, and generally less so, than in the greatest lumber regions of North America. There are but few large water courses, but no point anywhere, even in the largest islands, is more than 50 or 75 miles from tidewater, and the topography is rarely such as to present inseparable obstacles to the construction of railways. Most of the larger mills now in operation are actually on the seacoast and have larger logging railroad extending inland to distances of ten miles or more. There are a number of regions where there are excellent opportunities for erecting new mills, either in the timber itself or at points on the coast or waterways lead- ing to the sea. Steamers specially fitted for carrying lumber are few, and freight rates correspondingly high. Large operators should arrange for their own transportation from their mill to Manila or other points within the Islands where the lumber is intended for home consumption. In the case of export stock, shipments should be made direct from the mill in ocean-going steamers to prevent the additional expense of transshipping at Manila. • Cost of Operations. The cost of operations is less than in the forest regions of the Temperate Zone or other forest regions of the Tropics. Ninety-nine per cent, of the timber is the property of the Government and is ad- ministered by the Bureau of Forestry under a system of licenses granted for from one to twenty years duration, with the privilege of renewal. The long-term license arrangement (or concessions, as they are popularly called), are only granted on certain conditions which specify the amount of capital to be invested, the minimum cut during several suceeding years, together with certain requirements a sto log- ging and manufacturing, equipment, etc. Stumpage is paid for as cut at the following rates, based on the classifications set forth below : Classification of Forests. Group I (Names of Trees) — Acle, Baticulin, Betis, Camagon, Ebony, Ipil, Lanete, Mancono, Molave, Narra, Tindalo, Yacal. Group II (Names of Trees) — Alupag, Aranga, Banaba, Bansala- guin, Banuyo, Batitinada, Bolongeta, Calamansanay, Calantas, Dun- gon, Guijo, Macaasim, Malacadios, Mangachapuy, Palo maria, Supa, Teak, Tucang-Calao. Group III (Names of Trees)— Agoho, Amuguis, Anubing, Api- tong, Batino, Bitanhol, Catmon, Calumpit, Cupang, Dalinsi, Dota, 63 Dungonlate, Malacmalac, Malapapaya, Malasantol, Mayapis, Palosapis, Panao, Sacat, Santol, Tamayuan, Tanguile. All other groups are placed in four. The metric system of measurement has been officially adopted by the Philippine Government. The forest charges based on the vol- ume of round timber of the different groups are as follows : Charge Per One Thousand Board Feet. , Group I $5 00 Group II 3 00 Group III 2 00 Group IV 1 00 Inasmuch as the bulk of the cut of lumber at the sawmills (about 90 per cent.) is of the third and fourth groups, stumpage is compara- tively cheap. A big advantage to the Philippine lumberman is that as the stumpage is not paid for until cut the necessity for a big investment in timber holdings before manufacturing can proceed is obtained. Long-term agreements usually cover an area of from 10 to 300 square miles ; skirting tidewater on at least one side. Logging and sawmill machinery comes in free of duty, if imported from the United States. From other countries the import duty is 15 per cent Labor Supply. That the Philippine labor problem can be successfully solved is an established fact so far as the lumbering industry is concerned. When properly treated the Filipinos are conscientious and fairly steady workmen. In sparsely settled forest regions it is necessary to import laborers from the more thickly settled districts. The majority of these men are married and when they make a move that gives evidence of per- manent betterment they expect to bring their families with them. Therefore, colonies must be established, schools and churches built, and amusements provided. Once the lumberman gains the confidence of his employes, he will find long lists of applicants awaiting him. Classes of Mills. There are three distinct classes of lumbering plants in the Islands : (1) Hand-sawing, also known as whip-sawing, used extensively in the provinces by the Chinese lumbermen. Practically every town has its whip-sawyers. There are also several larger hand-sawing mills located in Manila, Cebu, Iloilo and other of the principal cities. These mills have a capacity of from 3,000 to 10,000 board feet per day. (2) The small water "or steam mills, working along much the same 64 lines ; but carrying a stock of thousands and even of tens of thousands of feet of rough and milled lumber. These mills are run by Filipinos, Chinese and Spaniards, with a sprinkling of American and European operatives in the larger mills. (3) The large steam mills, both band and circular saw types, estab- lished almost entirely by American and European capital, and managed by Americans. These mills carry a large stock of finished lumber and are for the most part the lumber exporters of the Islands. Sawmill waste almost always provides ample fuel. Logging loco- motives burn principally wood, with a small admixture of coal. Until recently the major portion of the coal used in the Philippines has been imported, but with the organization of the National Coal Co., for the development of the Philippine coal fields, it is believed that a sufficient supply for all home uses will be obtained, thereby lowering the price of this fuel considerably. Uniform Grading Rules. Efforts have been made for years past to establish some standard system of grading Philippine lumbers. In 1917, the Bureau of For- estry secured the services of an expert hardwood lumber inspector, who was familiar with Philippine lumber, and detailed him to draw up a set of grading rules suitable to the local species. The lumber, both for export and home consumption, is now being graded in accord- ance with these standard rules, specifying firsts, seconds and export common. Guaranteed grades will also apply to railroad ties, car ma- terial and construction timbers. In addition to the Trade School, where boys are taught the techni- cal side of lumber production, a School of Forestry is maintained under the supervision of the Director of Forestry, where students are prepared to take place in the Forestry Division of the Government service. About $6,000,000 is invested in the more modern sawmill equip- ment in the Philippines, and several millions more, of which no accu- rate data is available, are invested particularly in animals, by the thou- sands of small licensees in their logging operations. Production and Prices. In spite of the large decrease in exports, owing to the demand on shipping for other products and the heavy freight rates, almost all of the mills continued to operate full time during 1917, 1918 and 1919, and in several cases overtime. Taking the seven larger mills, they produced 62,000,000 board feet in 1918 as against 36,000,000 board feet in 1917. The total production for mill-sawn timber in 1918 was 75,000,000 board feet, as compared with 60,000,000 board feet in 1917. 65 These figures are only for mills operating on their own license areas and do not include the output of the mills operating in various portions of the Islands, which buy their logs from logging licensees. In addition to the native lumber manufactured in 1918, there were imported 6,308,700 board feet, practically all from the United States; of which a portion was re-exported to India and the Dutch East Indies. The figures showing the 1919 production and distribution have not yet been compiled. One of the most difficult phases of a discussion concerning timber is to give a just estimate of prices. The price of a given wood, even where lumber is of the same dimensions and quality, may vary in accord with certain external conditions. Broadly speaking, supply and demand are the chief governing factors in the long run. With the present era of prosperity in the Philippines, the local demand will undoubtedly increase greatly. The increased activity in other industries, particularly copra, and the establishment of cocoanut oil factories, has ushered in a new and better day for the many small land owners and they are showing a keen interest in the building of wooden dwellings to replace those of mixed materials now common in the provinces. Public works projected for the coming year are more extensive than any ever before contemplated in the Island and the demand for this purpose alone should be well over 15,000,000 board feet. Varieties of Woods. The Philippine forest products range from the lightest daluro (air roots of pagatpat), used as a cord substitute, to one of the heaviest woods in the world — mancono (80 pounds to the cubic foot) and from pines similar to the yellow pines of our Southern States to the finest cabinet woods. OPPORTUNITIES FOR INDUSTRIAL DEVELOPMENT. The following resume of industrial resources awaiting develop- ment was originally prepared by the Philippine Bureau of Science under the direction of Dr. Alvin J. Cox. Fisheries. Fish Ponds^-The value of the fish ponds in the vicinity of Manila is about 6,000,000 pesos. There are also extensive ponds in various other localities in the Islands. These ponds in many cases serve a two-fold purpose — the growing of the ordinary market fish, bangos, and the manufacturing of salt — each being a profitable industry. 66 Food and Game Fishes — Next to agricultural products, food fishes are of the greatest importance to the Filipino people. In Manila alone fresh fish to the value of over 5,000 pesos are sold each day. Sixteen hundred species of fishes from Philippine waters have been identified, and with a few exceptions they are all used as food. Such fishes as the anchovy, sardine, and herring abound and constitute a potential source of wealth. Game fishes abound in many places in the Islands ; the jew fish, the bonita, the sword fish, and tuna afford the best sport. Pearl Fisheries — Pearl shell to the amount of 292,211 kilograms, valued at 354,260 pesos, was exported during 1913, the number of pearls secured during the year was above the average, and the price paid by dealers was high. Fifty-two pearling boats are now operating in Moro Province. The pearl fisheries are proving to be a very attractive field of investment, especially for Japanese capital. Button Shells — The increasing demand for shells for the manu- facturing of pearl buttons, particularly for the top shell (Trochus) and the turban shell (Turbo), has stimulated the gathering of them by fishermen. The amount of these shells exported during the last year was 738,025 kilograms, valued at 287,120 pesos. Window Shell — About 5,000,000 window shells are used each year in the building operations in the city of Manila, a large proportion of which come from the beds in Manila Bay. The demand for these shells in other countries for making windows, lamp shades and screens is steadily growing. The Bureau of Science is making an effort to increase their cultivation. Preserving Fishery Products — The waters of the Philippines team with sardines and anchovies of good quality, and yet sardines to the value of about 100,000 pesos are imported into the Philippines each year. However, an interest is being taken in this matter by American packers who have requested samples of sardines and have indicated their willingness to invest money in a fish cannery. A sardine can- nery should pay good dividends. The drying and curing of fish could be more profitably and ex- tensively carried on by adopting modern methods. Preservation of commercial fish and fishery products in the tropics. Starch. An investigation of a number of starch-producing plants growing in the Philippine Islands has been carried on. Among these may be mentioned tapioca or cassava (Manihot utilissima Pohl), the native name being camoting cahoy; arrowroot (Maranta arundinacea Linn.) ; 67 sincamas (Pachyrhizus erosus Urban) ; the Polynesian arrowroot (Tacca pinnatifida Forst.) ; yams (Dioscorea; Amor pho phallus cam- panulatus Blume) ; seeds of Cycas circinalis Linn. ; and the sugar palm (Arenga saccharifera Labill.). The most promising of all these is the cassava which grows luxuriantly in various parts of the Islands and produces large quantities of starch Twenty-seven per cent, of the weight of the material can be extracted by commercial processes. The starch of the sugar palm is used by natives of certain parts of the Islands, principally the Mafigyans, a hill tribe of Mindoro. They extract the starch from this palm and use it as a staple article of diet. They transport it to the lowlands in baskets of palm leaves where it is sold and traded for other articles. In Mindanao the sago palm (Metroxylon rumphii Mart.) is of great local importance, and the com- mercial exploitation of the Philippine sago is a possible further de- velopment. This is the species that yields the sago of commerce, and it occurs abundantly in parts of Mindanao. Vegetable Oils. Important vegetable oils of the Philippine Islands, other than coco- nut oil, are produced from lumbang, kapok, cashew, castor bean, cotton seed, physic nut, and pili. This type of oils is also derived from oil- bearing seeds and is of considerable importance. Lumbang oil has good drying qualities and is used in the varnish trade. The production of this and of pili nut oil is increasing in importance. Other oils now little known may prove of commercial value. The Perfume Industry, Essential Oils and Terpenes — The Philip- pine Islands are especially rich in plants which produce large numbers of terpenes. The most important essential oil and terpene-producing plants have been studied by the chemists of the Bureau of Science and their commercial value discussed in The Philippine Journal of Science. A comprehensive investigation of the Benguet pine has shown that excellent turpentine and colophony, practically identical with the products originating in America, can be produced from this source. Various resins, such as elemi, balao, apitong and copal have been in- vestigated to determine their chemical composition, their value in the manufacture of varnishes, etc. The essential oils responsible for the fragrance of many plants and flowers have also received considerable attention ; among these are ylang-ylang, champaca, orange, lemongrass, vetiver, cinnamon and ginger. Several of these are used in the per- fume industry and others in the manufacture of nonalcoholic bev- erages and fruit flavors. This work should be the basis for industries in the Philippine Islands. 68 LIMESTONE AND SILICATE INDUSTRIES. Sand, limestone and clay, although the most common, familiar and perhaps the least appreciated of mineral resources, nevertheless con- stitute an asset of importance to any country. Limestones of excel- lent quality are abundant and of widespread occurrence throughout the Philippine Islands, and in certain localities there is also an abun- dance of sand, shale or clay, the physical and chemical properties of which guarantee to this Archipelago stable industries among which the manufacture of Portland cement, quicklime, hydraulic lime, sand-lime brick and artificial stone products; building, vitrified and fire brick; glass, roofing material and vitrified pipes, tiles and other ceramic prod- ucts are certain to become exceedingly important. Portland Cement — The imports of Portland cement during the past few years have had an average annual market value of about 1,500,000 pesos, and the local consumption is certain to increase as the country progresses in financial and industrial importance. The local manu- facture of this material will not only save transoceanic freights, but also an import duty of 3.20 pesos per ton on all non- American cements. The Rizal Cement Company is constructing a 1,000-barrel per day plant at Binangonan. Excellent Portland cement has been made from several local deposits of limestone and siliceous materials. In Cebu desirable cement raw materials occur adjacent to undeveloped coal fields, the fuel from which is of suitable quality for burning cement. Sand-Lime Products — Conditions are very favorable in the Phil- ippines for the commercial manufacture of brick building blocks, tiles, slabs, marbles and ornamental stones from sand and lime. The cost of manufacturing and selling 9-inch bricks of the best quality is esti- mated not to exceed 13 pesos per 1,000, which, in comparison with the price of other building materials, offers considerable margin for profits. Lime — Pure coralline and crystalline limestones suitable for the manufacture of lime occur throughout the Philippine Islands. The value of the lime now produced is about 100,000 pesos per annum. It does not meet the demand in either quantity or quality. A well-burned lime, such as is produced in the experimental kiln at the Bureau of Science, has a market value of 50 pesos per ton. If good lime were available at a moderate price, there is little doubt that the demand for it would soon equal the output of large kilns. The increasing produc- tion of sugar by modern methods is augmenting the demand for lime. It is probable that the industry would thrive best if conducted in con- nection with a sugar central or with a sand-lime-brick plant. Philippine Dye*— While it is true that the artificial dyes have largely supplanted natural materials, in some districts there occur 69 natural dyes of sufficient brilliancy, permanency and quantity to be very valuable. They are employed in the dyeing of native fibers for the manufacture of hats, mats, baskets, cloth, etc. A number of these dyes have been investigated and the results published. Tanning Materials — Tanners of the United States are becoming each year more dependent upon imported material. Bark from the better species of Philippine mangrove trees contains 30 per cent, of tannin, and a net profit of from 50 pesos to 60 pesos per ton can probably be made on tanning material derived from the mangrove swamps in the Philippine Islands. There are areas or workable swamps in the Islands capable of producing yearly 1,500 metric tons of extract, having a value of 210,000 pesos. The exploitation of these swamps would involve a firewood and piling industry of about an equal magnitude. The extended use of mangrove bark and more particularly mangrove extract is comparatively a recent development. All the species of mangrove of any importance in the eastern tropics are found in the Philippine Islands, and the opportunity for a profit- able cutch industry is very great. Papaya Gum — A study of the properties of papaya gum made from the latex of Carica papaya has resulted in improving methods for preparing this important commercial product. The results already obtained show conclusively that gum may be made in the Philippines which is equal, if not superior, both regarding color and activity, to any now on the world's market. The constantly increasing demand for papaya gum as a substitute for pepsin and the well-known fact that satisfactory gum is difficult to obtain assure a steady market for a high-grade Philippine product. Medicinal Plants — A very large number of plants are used by Filipinos in the treatment of diseases. Datura, dita, sibucao, maca- buhay, bonduc, purging oils and the fish and arrow poisons have been studied. A few of these are recognized as sources of various medi- cines in the standard pharmacopoeia. The active constituents of many medicinal plants growing in the Archipelago have been isolated and identified. There are very few commercial species. A single medicinal plant is commercially important for export at the present time and that is the St. Ignatius bean (Strychnos ignatii Berg.) yielding strychnine and brucine, the species being found native only in the Philippines, The castor oil plant, croton oil plant, kamala and datura (as a source of atropine) are very little or not at all utilized although all grow very luxuriantly and are very abundant. The potential commercial medic- inal plants are many, but the industry must be developed by individ- uals. The Bureau of Science will gladly supply data with regard to specimens submitted. 70 Honey — Wild honey is plentiful in all the wooded portions of the Philippines, and a considerable trade is carried on in honey and wax collected by the crudest methods. Philippine honey bees produce an excellent grade of honey. Bee culture could be carried on in connec- tion with farming. Even at present a couple of thousand pesos' worth of honey is imported each year, indicating an ample local market for the native product. Efforts to import honey bees from the temperate zone have not been entirely successful. Alcohol — Almost the entire insular production of alcohol — about 10,000,000 proof gallons per year — is made from the sap of the nipa palm, which grows luxuriantly in a number of places in the Philip- pine Islands . Although extensive nipa swamps exist in the Philippine Islands, only a few are utilized commercially. The alcohol industry has been investigated and methods for improving the process of man- ufacture have been described in a number of papers from the Bureau of Science. Also, it has been discovered that a more profitable man- ner of utilizing the sap of this palm is in the manufacture of sugar. It has long been known that several species of palm trees secrete a sap rich in sugar and the natives of various countries have taken advantage of this fact, but no exploitation on a commercial scale has been attempted for the reason that it promised no financial returns. A thorough investigation has shown that we have in the nipa palm a source of sugar which has been proved to be very attractive from the standpoint of investment. The fresh sap has approximately the com- position of that of sugar-cane sap, and the methods of collecting and preserving it during transportation to the refinery have been improved. The difficulties encountered in the establishment of the business upon a large scale have been entirely overcome through the investigation of the Bureau of Science. The production of sugar from the nipa palm is an industry new to the world and one which will be unique to the Philippine Islands; it will give a remarkable value to large areas of swamp which are otherwise almost valueles. Materials for the Manufacture of Industrial Alcohol Abundant in the Philippines. Nipa palm sap, discard molasses from the sugar mills (amounting annually to more than seven million gallons), also sawdust, wood waste, ripe fruit, especially bananas make excellent materials for the manufacture of industrial alcohol. These are found in abundant quantities in the Islands. The development of the industry is advo- cated for lighting purposes and for fuel. 71 Rope Industry. There are several successful rope and cordage factories now in operation in Manila. In 1915 the rope exports amounted to ^189,799, while in 1918 they reached the sum of f*l,733,986. Manila Hemp (or Abaca) is one of the leading agricultural re- sources of the country. It is cultivated almost entirely by small farmers, and even a relatively short period of depression would be sufficient to drive many of them out of business. The cordage market is not subject to the sharp fluctuations and control as is the hemp. The establishment of a sufficient number of rope and cordage fac- tories for the manufacture of the greater part of the Manila Hemp into marine cable and cordage is desired. WATER POWER AND ELECTRICAL DEVELOPMENT. A study of the water power facilities of the Philippines, recently made under the direction of the Government, shows that the Philippine rivers offer an almost inexhaustible fountain of energy for the genera- tion of electric power. Agus River in Lanao, Mindanao, has 350,000 H. P. available. Agos in Tayabas Province, 55,000 ; Angat in Bulacan Province, 9,000; and Agno in Mountain Province and Pangasinan, 60,000. Moreover, there are numerous small streams which may be developed to furnish motive power from ten to one hundred H. P. or over. Manila is well equipped with electrical power both for lighting and operation of street railways. Electrical Development in the Provinces. Province. City. Current. Voltage. Albay Legaspi Direct 220 Albay Guinobatan Constant 110 Albay Ligao 110 Ambos Camarines .... Naga Constant 110 Ambos Camarines Naga Constant 110 Batangas Taal Alternating 224 Bohol Calape 125 Bulacan San Miguel Direct 220 Bulacan Malolos Direct 200 Cagayan Aparri Direct Cavite Cavite Alternating 220 Cebu Cebu 220 Ilocos Sur Vigan Direct 220 Iloilo Iloilo Alternating 104 Iloilo Jaro Alternating 104 Isabela Ilagan 110 Laguna San Pablo 224 La Union San Fernando 120 Leyte Burauen Direct 224 Mindoro San Jose : Mountain Province . . . Baguio Alternating 2,300 Mountain Province . . . Sagada 125 Occ. Negros Silay Direct 110 72 Province. City. Current. Voltage. Occ. Negros San Carlos 250 Occ. Negros San Carlos 125 Oriental Negros Dumaguete Direct 220 Oriental Negros ( Silliman Institute ) . . . Direct 220 Oriental Negros Bais Direct 115 , Pangasinan Lingayen Alternating 229 Rizal :::::::::::::::: &eio'^cati::::| F -^ ft ^«£s Rizal Calaocan f Electric Light and Rizal Pasay J Railroad Company. Samar Calbayog Direct 125 Samar Catbalogan '.. Direct 115 Samar Catarman Direct 110 Tarlac Tarlac 250 Tayabas Lucban Alternating 110 Tayabas Lucena Direct 220 Tayabas Tayabas "A-6" 440to 11,000 Zambales Olongapo Direct 230 Bukidnon Diclom 300 Davao Davao Direct 250 Davao Davao Direct 115 Davao Malita Lanao Kolambugan Alternating 220 Sulu Jolo , 220 Zamboanga Zamboanga 220 Zamboanga Zamboanga 100 PAPER PULP. For several years the Bureau of Science has been investigating the suitability of bamboo, cogon grass, abaca or hemp, and various palm fibres for paper pulp. With due regard to local conditions, the data collected show that an industry of great economic value can be developed. Careful surveys of some of the available bamboo fields have been made. Sufficient data with regard to the cost of the raw material, the quantity of bamboo available, and the cost of manufacture of the pulp are given, showing that the bamboo soda pulp can be developed into a possible export trade in direct competition with chemical wood pulp at present quotations. Other countries have already utilized the information obtained from this work, and ulti- mately it will be the means of starting the paper industry in the Philip- pines. Samples of pulp manufactured from different Philippine ma- terials can be obtained from the Bureau of Science. THE PHILIPPINE EMBROIDERY INDUSTRY. By M. J. de la Rama, Manager, Philippine Commercial Agency, San Francisco, California, The women of the Philippines have long been noted for their patience and dexterity in hand embroidery. This was one of the principal feminine industries taught in the convents by the Spanish, French and Belgian Sisters. They have wonderful designs of intricate patterns, using a great variety of stitches and also various patterns in the open work known as " Calado." 73 In the early days the industrial trade was established by native men, who sold their products only in the Philippine Islands. They would purchase cloth, draw a design by pencil and give it out to the women to embroider, afterwards peddling the products around the streets of Manila, selling it for the best price they could get. The designs were often crude and materials inferior, although the workmanship was excellent. The women trained their children to continue the work of em- broidery, and passing from one generation to another, the designs, the materials and workmanship all showed great improvement. Gradually a great industry has been developed. It was difficult to secure an entrance into American markets, but after the desired styles and appropriate designs for American trade were introduced the work- manship spoke for itself and has shown an increasing prosperity with each year. The output of hand embroidery has nearly reached the mark of 1*7,000,000 a year, and the demand exceeds all present avail- able sources of supply. From the year ending December 31, 1914, when the total exports of hand embroidery from the Philippines totaled 1*324,912, until the end of the year" 1919, when the total exportation amounted to f*6,913,004, a period of six years, the increase was more than twenty-fold. There are to-day nineteen concerns in the City of Manila, with a personnel aggregating approximately 60,000 persons in and around the City of Manila devoting their energies to the preparation of this handiwork for foreign trade. According to a recent investigation fourteen of these concerns are devoting their efforts entirely to export business and the five others are devoting their energies to local and export business These concerns are not, strictly speaking, factories, but each' has local headquarters in Manila, and most of them have various sub- agencies in Manila and the adjoining provinces. Each concern main- tains from five to one hundred employees at the local headquarters and from ten to one hundred agents who deal with piece-workers in the districts of Paco, Tondo, Ermita, Malate, Santa Ana, and Singalong in the City of Manila, and the municipalities of Mariquina and Paranaque of the Province of Rizal, in the Province of Cavite, in the municipality of Taal, of the Province of Batangas, in Calumpit and Hagonoy of the Province of Bulacan and in various parts of Pampanga and Tarlac, not to mention limited districts in the Visayas. Employees engaged at the local headquarters are for the most part working on a salary basis and are engaged in cutting, sewing, trimming, ribboning, ironing, packing and embroidering for export trade. These employees in the City of Manila do not exceed 1,700, and in addition to this the industry maintains about 350 agents or " cabecillas " who deal with the embroiderers who do piece work. 74 The agents distribute the material for embroidering by the piece- workers in Manila and the adjoining provinces, pay for the handiwork when finished and return the product to the headquarters at Manila preparatory to export. Wages on the daily basis for boys engaged in ironing, packing, etc., are about 1*0.80 to 1*1.00 a day; for adults in similar work, from 1*1.50 to 1*2.00; for unskilled sewers, mostly girls who are beginning the work, a daily wage of from 1*0.80 to 1*1.00 is paid. Skilled workers among the women are paid from 1*1.50 to ^2.50 daily. Those engaged in cutting are paid from 1*0.80 to 1*1.50 a day. Embroidering is paid for at the rate of 1*0.75 to 1*1.00 for simple designs, K.50 to 1*5.00 for a better grade of work of a more intricate character, and special designs are paid for according to agreement, in some instances as high as 1*15.00. Daily wages average from 1*1.50 to M.50 per day and some receive as much as M.50 a day. Philippine hand embroideries are of cotton and linen. Practically no silks are used. The materials chiefly used in the making of Philip- pine hand embroideries are nainsooks, batiste, voile, georgette, crepe de chine and net cotton. All these materials are imported from the United States, and have materially increased in price since the beginning of the war. Prior to the date, nainsooks or batiste could be secured in Manila from 1*0.12 to W.25 a yard, while at the present time the cost ranges from 1*0.75 to 1*1.50. The principal articles of embroideries made in the Philippines are lingerie, children's clothes, handkerchiefs, table cloths and underwear of various classes, which for the most part are prepared according to orders received from the United States. The work done is of a very good grade and brings good prices in the United States. Embroideries of the Philippines are exported chiefly to the United States, although a very small quantity of them are exported to the United Kingdom, Hong Kong and Australasia. The exports from 1914 up to and including the first six months of 1918 are as follows : 1914 1*324,912 1915 735,303 1916 2,328,024 1917 3,929,318 1918 4,361,352 1919 6,913,004 While the demand in the United States seems to be steadily increas- ing for Philippine embroideries, there are indications that the increase in exports is due to the decrease of exports of embroideries from Europe to the United States. Imports of embroideries, laces, handker- 75 chiefs and edgings to the United States from Europe and the Madeiras during the years 1912 to 1918, inclusive, follow: 1912 $37,094,161 00 1913 35,776,301 00 1914 33,865,822 00 1915 20,800,266 00 1916 21,153,392 00 1917 16,648,857 00 1918 10,421,083 00 The heavy increase in the exports of the Philippine hand embroid- eries beginning with the year 1915 and the corresponding decrease in the United States imports of embroideries from Europe and Madeiras seems to indicate that the Philippine demand is due in a measure to war conditions, but notwithstanding the resumption of the manufacture and export of embroideries and laces from Europe, Philippine hand embroideries have attained a position in the United States market which they will not lose, and on the contrary will continue to develop even faster than it can be supplied with the present available labor supply in the Islands. Notwithstanding the trying nature on the eyes of the work of em- broidering, which prevents embroidery workers from devoting long hours of daily work, the present available supply of labor nearly keeps pace with the present demand. The field for further development is immense. The present output is only from the City of Manila and outlying territory. The rest of the Archipelago is not doing anything in this line, but there is no doubt that with the proper training the women out in the provinces could increase production by even a hundred- fold should the demand warrant it. Hats and Hat Making — The Bureau of Science has published data on the types and grades of Philippine hats, the materials of which they are made, how the materials are prepared, where they are secured and the centers of the hat-making industry. The manufacture and expor- tation of hats from the Philippine Islands is a comparatively large industry. 14 DAY USE REruBNTOD BSK F KOM WHICH BOKKOWBD LOAN DEPT. RENEWALS ONLY T/D 2lA-45m-9,'67 (H5067S10H76B General Library University of California Berkeley Binder C*ylord Bros., Inc. Stockton, Calif. T. M. Reg. U.S. Pat. Off. ^ -i 49291 UNIVERSITY OF CALIFORNIA LIBRARY