If the commercial possibilities of any region are to be attractive to Europeans or Americans, it must have a just and stable government; a reasonably healthful climate; fairly good means of communication and transportation; forest, agricultural, mineral or other wealth, and labour with which to develop it. Proximity to main lines of travel and to markets is also an important consideration.

The present1 government of the Philippines is highly effective and the state of public order leaves little to be desired. Doubt has been expressed as to the stability of the existing régime, but it is at the very least safe to assume that the United States will never withdraw from the islands without leaving behind a government which will assure to the residents of the archipelago, foreign and native, personal safety, just treatment and security of property rights.

Health conditions are now excellent, and the death rate among whites at Manila is lower than that in many European and American cities. If one will only vary the monotony of the continuous warmth by making an occasional trip to Baguio, and take reasonable precautions as to food, drink and exercise, there is no reason why one should not die of old age.

Means of communication by land are now fairly good and steadily improving. The seas are well lighted and the main lines of sea travel have been carefully surveyed.

The islands have many beautiful harbors and, as we have seen, at Manila, Cebú and Iloílo extensive harbour improvements have already been made. There are no special difficulties attendant upon the loading or unloading of ships anywhere in the archipelago. The rapid extension of highways, and the construction of additional railways, are facilitating and cheapening land transportation.

The natural resources of the country are unquestionably vast. I have already devoted a chapter to the discussion of the forests and their wealth.

As to the mineral resources, while we have much still to learn we already know that there are excellent lignite, some coking coal and extensive deposits of high-grade iron ore and of copper. One flourishing gold mine is now giving handsome returns, and several others seem to lack only the capital needed to develop them on a considerable scale in order to make them pay; dredges are operating for gold with great success in the vicinity of Paracale in eastern Luzón, and there are other gold placer fields in the islands which are worthy of careful investigation. The prospect of obtaining in quantity a high-grade petroleum with paraffine base rich in low-boiling constituents is very good.

Difficulties in the way of the development of the mining industry are to be found in the disturbances of geological formations which are inevitably met with in volcanic countries, in the dense tropical vegetation which in many regions covers everything and renders prospecting difficult, and in the unevenness of the rainfall which in some parts of the archipelago results in severe floods at one season and in the lack of sufficient water to furnish hydraulic power at another. But we are at least free from the troubles incident to freezing cold, and in my opinion a prosperous mining industry will ultimately be built up in the Philippines.

Agriculture has always been, and will doubtless long continue to be, the main source of wealth. In the lowlands may be found conditions of soil and climate favourable to the growing of all important tropical products. Owing to the position of the islands with reference to the northeast and southwest monsoons, practically any desired conditions as regard humidity and the distribution of rainfall can be found. There are regions which have strongly marked wet and dry seasons, and regions in which the rainfall is quite uniformly distributed throughout the year. In some provinces the heaviest rains come in January, while in others they come in July or August. The Philippine Weather Bureau has gathered an immense amount of very valuable rainfall statistics and is constantly adding to its present store of knowledge. Father José Algué, its distinguished director, can always be depended upon to furnish any obtainable information.

But this is not all. We are not confined to tropical products. In the highlands of Luzón and of Mindanao practically all the vegetables and many of the grains and fruits of the temperate zone may be produced.

When well fed, properly directed and paid a reasonable wage, the Filipino makes a good field labourer. Much of his so-called laziness is unquestionably due to malnutrition. A diet made up largely of rice, especially if that rice be polished, does not develop a maximum of physical energy.

When threshing machines were first introduced it was impossible to get Filipinos to handle the straw. The work was too strenuous for them. We soon discovered that by picking fairly strong men, and feeding them plenty of meat, we could make them able and willing to do it.

Some extraordinary misstatements have been made as to Manila’s position with reference to main lines of travel and to markets. In this connection Blount says that it is an out-of-the-way place so far as regards the main travelled routes across the Pacific,2 and adds that shippers would not take to unloading cargo there before finally discharging it on the mainland of Asia.

With singular inconsistency he also says that Manila could never succeed Hongkong as the gateway to Asia.3

One might almost believe him ignorant of the fact that Hongkong is an island, separated from the continent of Asia, and that the very thing which he says would not happen at Manila, to wit the “unloading by way of rehearsal, before finally discharging on the mainland of Asia,” is the thing which has made Hongkong harbour one of the busiest ports in the world.

Manila has numerous very definite advantages over Hongkong. Health conditions are vastly better, and there is far less danger that crews of vessels will become infected. Ocean going steamers come alongside piers and unload directly into great sheds which protect goods during storms. The pier sheds have direct connection with the electric railway system of the city, so that freight can be quickly and cheaply transported under cover. The Manila breakwater affords excellent protection during typhoons, whereas Hongkong harbour is periodically swept by storms which cause great damage to shipping and very serious loss of life.

Hongkong is a free port, but the construction of bonded warehouses at Manila for the reception of goods intended for reshipment would largely make up for the fact that Manila is a port of entry.

The reply to the claim that Manila is far from markets and established lines of travel is simple. Look at the map and compare it with Hongkong!

Let us now consider more in detail the resources of the Philippines.

The first thing that impresses one who studies their agriculture is the extremely primitive state of development to which it has attained. Rice is the bread of the people and is produced in large quantities, but as a rule land is prepared for planting it by ploughing with what is little better than a crooked stick, which may or may not have an iron point, and by subsequent puddling with a muck rake, both instruments being drawn by carabaos. As the ground cannot be worked in this fashion until the rains come on, and the young plants should be set in the ground very shortly thereafter, the period during which the soil can be prepared is brief, and the amount brought under cultivation is correspondingly small. Rice is usually planted in seed beds and transplanted by hand, the object of this procedure being to give it a start over the weeds which would otherwise swamp it. It is a common thing to see a crowd of men, women and children setting it to the music of a small string band, with which they keep time. Organizations which have the reputation of maintaining a rapid rhythm are quite in demand because of the increased amount of rice set! Ordinarily, in the lowlands at least, comparatively little attention is paid to subsequent weeding, and when harvest time comes the crop is usually gathered by cutting off the heads one at a time. Threshing is frequently performed in the open air on a floor made of clay and carabao dung. Often the grain is trodden out under the feet of the owners themselves; sometimes it is stripped off by drawing the heads between the teeth of an instrument somewhat resembling an inverted iron rake; again it is beaten off against stones; a more advanced method is to drive horses, carabaos or cattle over the straw until the grain has been loosened from the straw. The palay4 is usually winnowed in the wind, although crude fanning mills are sometimes employed for this purpose. The threshing takes much time, and while it is in progress great loss results from the depredations of rats and wild hogs, from unseasonable rain-storms, and from the carrying off of the grain by the threshers. A large part of the palay employed for local domestic use is husked by pounding it in wooden mortars and winnowed by tossing it in flat baskets. As a result of such methods the Philippines, which ought to export rice, are compelled to import it, the figures for the last 15 years being as follows:—

Rice Imports

American influence has already made itself strongly felt on the rice industry and small steel ploughs, of suitable size to be drawn by single animals, are coming into very general use. A steadily increasing amount of rice is harvested with sickles instead of with small bladed knives. Modern threshing machines are rapidly discouraging the employment of the threshing methods of biblical days, and their operation in the large rice producing regions is a good business for persons with limited capital, as the returns are immediate and the investment is small. The customary toll taken for threshing is one-eighth of the output.

While under my direction, the Bureau of Agriculture began the introduction of modern threshing machines. The amount of grain obtained from a stack of given size when thoroughly machine-threshed before there had been time for waste was so much greater than that to which the Filipinos had been accustomed that they thought that there must be a deposito of grain hidden away somewhere within the machine, and insisted on sticking their heads into it in search of this supposed source of supply!

Many small, mechanically driven hulling machines are now in use and the number of regular rice mills, with up-to-date machinery for hulling and polishing, steadily and quite rapidly increases.

The rice industry has at present two great needs: the first is irrigation, the second, careful seed selection. The average Filipino depends directly on rainfall for irrigation water, and although there may be a stream close at hand, he does not trouble to turn it on to his land unless conditions happen to be exceptionally favourable. The result is that dry years cause a very heavy, and largely avoidable, loss to the islands. A dependable supply of irrigation water would make two crops a certainty where one is now more or less of a gamble. The insular government is spending considerable sums on irrigation work, and in my opinion it offers a wide field for profitable private investment.

There are in the Philippines many different varieties of rice, each with its peculiar advantages and disadvantages. There is no possible doubt as to the opportunity which lies before the skilled plant breeder to increase the crop, and shorten the time required for its production, by the methods which have been so successfully applied to wheat and other grains.

Finally, in the highlands of Bukidnon, in Mindanao, there are immense areas which can be cultivated and planted with motor-drawn machinery. After taking off the first crop it would be readily possible to plough, harrow and seed in one operation, and here, if anywhere, modern harvesters and threshers can be employed to good advantage. In short, rice can be grown in Bukidnon as wheat is grown in the United States, and the company which goes into this business on a large scale should make money.

Abacá, commonly called Manila hemp, was for many years the most important Philippine export. The plants from which it is produced resemble bananas so closely that the uninitiated cannot distinguish them. They furnish the longest and strongest cordage fibre in the world. The Philippines have practically a monopoly on its production. Abacá culture is carried on in a very primitive way. The plants require well-drained soil and for this reason the Filipino often puts them out on steep mountain sides. The forest is felled, the timber is burned on the ground and the young plants are set before weeds have time to encroach. The bolo is usually employed for subsequent “cultivation,” which consists in the occasional chopping down of weeds. Fortunately the shade in an abacá plantation is so deep that it materially impedes the growth of other plants. The fibre is obtained from the leaf petioles which make up the stem. At the present time practically all of it is stripped by hand. This is a slow and tedious process, involving very severe physical exertion to which the average Filipino is disinclined, and serious losses often result from inability to get the crop seasonably stripped. Stripping is greatly facilitated if the knife under which the fibre bands are drawn has a serrated edge, but in that case the fibre is not thoroughly cleaned, soon loses its original beautiful white colour, and diminishes in strength owing to decay of the cellular matter left attached to it.

The production of high-grade fibre or of comparatively worthless stuff is chiefly a matter of good or bad stripping.

Abacá requires evenly distributed rainfall and constant high humidity for its best development, and should not be planted in regions subject to severe drought, which greatly reduces the crop and may kill the plants outright. Experience has shown that it richly repays real cultivation.

The trunks are heavy, and water makes up a large part of their weight, but they are full of air chambers, float readily and could be rafted or sluiced to a central cleaning plant wherever conditions are favourable for so transporting them. The one great desideratum of the industry is a really good mechanical stripper which will turn out clean, high-grade fibre in large quantity at small cost. At least one machine has been brought reasonably near perfection. In my opinion all that is now necessary is to put a skilled mechanic into the field with it under service conditions, and keep him there until such minor difficulties as remain have been successfully overcome. Stripping mills could readily be established in regions like that along the lower Agusan River, where climate and soil are ideal and water transportation is always available. A reasonable number of such plants in successful operation would go far toward revolutionizing the hemp industry, the development of which is at present greatly handicapped by the production of enormous quantities of badly cleaned fibre, which does not sell readily, whereas first-class abacá is without a rival and always sells at a high price.

The table on the opposite page shows the value and amount of hemp exports during a period of fifteen years.

Copra, or the dried meat of the coconut, has now become one of the most important exports of the islands, which lead the world in its production. The table on the opposite page shows the rapid increase in copra exports.

Hemp Exports

Copra Exports

An extraordinary drought, which seems to have extended throughout the Far East, is largely responsible for the decrease in exports during the last fiscal year, its effect having been felt long after it had passed.

Coconut oil is very extensively used in making high-grade soaps, and is now also employed in the manufacture of butter and lard substitutes. Their quality is excellent, they keep well in the tropics, and being non-animal in their nature are not open to the æsthetic or religious objections which some people entertain toward oleomargarine and true lard. Lard made from coconut oil is of course especially appreciated in Mohammedan countries. There is a steady demand for the shredded coconut used by confectioners. The press-cake which remains after the oil has been extracted is a valuable food for fattening animals. A rich, palatable and nutritious “milk,” on which “cream” rises in a most appetizing manner, is made by wringing out fresh shredded coconut in water. Whether or not it can be preserved and utilized as a commercial product remains to be seen, but the experiment would be worth trying.

Thus far coconut cultivation has been conducted in a very haphazard way. In fact, the existing groves are hardly cultivated at all. Nuts or young trees are put into the ground in whatever fashion seems good to the individual planter, and are invariably set too closely. There may be a little initial cultivation, but usually nothing is done except to cut down weeds and brush with a bolo, and often even this is neglected. The trees, once established, are left to shift for themselves, and are soon contending with each other for root space and air. The owner cuts notches in their bark in order to facilitate climbing. Water gathers in them and starts decay.

If under such circumstances coconut growing is so profitable that to-day plantations can hardly be bought at any price, what will happen when carefully selected seed nuts are put out at proper intervals and growing trees are given high cultivation? In considering the profits resulting from coconut culture, estimates are sometimes based on twenty nuts to the tree per year, while forty are considered a very liberal allowance. This number is even now largely exceeded throughout extensive areas in the Philippines under the unfavourable conditions above described. The effect of good cultivation can be determined, in a measure, by the condition of trees which chance to be so situated that the ground near them is kept clean. The results of fertilization can be estimated by observing the condition of trees standing near native houses. I recently endeavoured to have the nuts on a series of such trees counted from the ground. This proved impossible. In fact, it was necessary to cut out a bunch of nuts in order to make it possible for a climber to scramble over the great masses of fruit, and get among the leaves. I therefore bought the nuts on several trees and had them thrown down. The trees were in a little Manobo village, and the ground around them was cultivated. The two which seemed to be bearing most heavily could not be climbed, as bees had taken possession of them. The third best tree had three hundred ninety-seven nuts on it; the fourth only three hundred twenty-three, but its output had been reduced by tapping a number of its blossom stalks for tuba. All the nuts were very large. The meat from an average specimen was carefully dried and we found that one hundred fifty-six such nuts would make a picul of copra. A common estimate of the average number of nuts required for a picul is three hundred.

Of the whole number of nuts on these trees a few would have failed to develop, owing to lack of room, but it is fair to suppose that the first would have ripened three hundred fifty nuts and the second two hundred seventy-five. Actual observation has shown that it takes nuts two hundred thirty-eight to two hundred fifty-nine days to mature in Mindanao.

Coconut trees attain a great age, and a producing plantation in the Agusan valley would be a mine of wealth.

The time required for the trees to come into bearing varies from five to seven years with differing conditions of soil and climate, and with the altitude above sea-level. I have seen individual trees heavily loaded with nuts at four and a half years. The owner of a coconut plantation must wait for his returns, or grow something else meanwhile. Quick growing catch crops may at first be raised between the rows if soil conditions are favourable, but it must be remembered that coconut trees thrive on soil so sandy that it will produce little else of value. They require abundant water and plantations should be well open to the breeze. Such conditions are frequently found along the seashore, which doubtless explains the belief so common among natives throughout the tropics that the coconut will not grow where it cannot “hear” or “see” the sea. The trees do equally well on open inland plains.

They have few enemies or diseases in the Philippines, the bud rot which has caused such destruction in other countries being almost unknown there. They resist wind storms admirably, and even typhoons seldom uproot them, but violent gales injure the leaves and blow down the fruits, thus temporarily checking production. While coconut growing is profitable on suitable soil throughout the islands, it can be carried on most safely to the south of the typhoon belt.

At present practically all Philippine copra is either sun-dried or smoked. The latter process hardens the outer layer of the meat before it is thoroughly dried within, and also causes the deposit of more or less creosote. The resulting product moulds and decays readily, and has given Philippine copra an evil name, but this will not seriously interfere with the sale of a good article from the islands, as its quality will be readily determinable.

Until within a very short time the crudest and most antiquated hand machinery has been used in the local manufacture of coconut oil. Soon after the American occupation a modern oil mill was established at Manila. It prospered until it burned, which it rather promptly did for the reason that it was constructed of Oregon pine, which speedily became soaked with coconut oil, and was ready to flash into flame at the touch of a lighted match or of a cigarette butt.

A new mill of iron, steel and reënforced concrete has now been erected. It is equipped with the latest machinery and labour-saving devices, and is reported to be operating on a wide margin of profit.

The market for coconut oil seems to grow more rapidly than the supply increases. There is abundant room for more oil mills in the Philippines, especially as the machinery used in extracting coconut oil is equally well suited to the milling of castor beans, peanuts and sesamum, all of which can be produced in any desired quantity.

Modern drying apparatus is just beginning to be imported for copra making.

Sugar and tobacco are the remaining principal agriculture products. Both can be very advantageously grown. All that has been said relative to primitive methods in rice, hemp and coconut production can be repeated with emphasis in discussing sugar culture. The machinery and methods employed might almost be called antediluvian, and it is a wonder that sugar could ever have been produced at a profit under such conditions as have prevailed. Deep ploughing was unknown. There was not an irrigated field of cane in the islands. The most modern of the estates was equipped with a three-roll mill, and with some vacuum pans which the owner did not know how to use. The soil was never fertilized, and no sugar grower dreamed of employing a chemist. Forty to sixty per cent of the sugar in the cane was thrown out in the bagasse, and that extracted was full of dirt and promptly began to deliquesce.

Philippine sugar could never have competed successfully in the world’s market under such conditions.

Fortunately one modern central has already been established, and several others are in process of construction. Up-to-date mills could well afford to grind cane for Filipinos, giving them outright as much sugar as they had previously been able to extract from it and making a very handsome profit out of the balance. But as yet most Filipinos have not learned the benefit of coöperation, and are too suspicious to contract their crops of cane to a mill. It follows that mill owners must control, in one way or another, land enough to produce cane sufficient to keep their mills in profitable operation. As we have seen advantage has been taken of this fact by unscrupulous sugar men in the United States who have secured legislation limiting the amount of land which corporations authorized to engage in agriculture may own, with the deliberate intention of thus crippling the sugar industry in the Philippine Islands. It is iniquitous so to handicap an important industry in a colonial dependency, and this legislation should be stricken from the statute books.

Fortunately there is no law limiting the right of individuals to contract their crops, nor is it apparent that such a law could be enacted. Furthermore, there is no law limiting the amount of land which an individual may hold, nor is it likely that any will be passed. It would therefore seem that while vicious legislation may interfere with the rapid development of the sugar industry in the Philippines, it cannot destroy it.

The table on the opposite page shows the amount and value of sugar exports for the past fifteen years.

It is said that the tobacco which now produces the famous Sumatra wrapper originally came from the Philippines, which now have to import it. This condition of things is mainly due to lack of system and care in tobacco growing. Seed selection is almost unknown; worms are not picked; fertilization is not practiced; the system under which each labourer settles on the land, plants as much or as little as he pleases, and manages his crop in his own way, is in vogue, and it is an eloquent testimonial to the merits of soil and climate that the tobacco so grown is good for anything.

Sugar

The domestic consumption of tobacco is very large. Practically every one smokes. Exportations are increasing. The tables on pages nine hundred and nine hundred one will give an adequate conception of the recent growth of the tobacco industry.

Bananas form an important part of the food of the people, yet there is not such a thing as a real banana plantation in the islands. The average Filipino has a few plants around his house, but with many of them even this is too much trouble, and they prefer to buy the fruit at a comparatively high price in the local markets. Good bananas sell readily in Manila at half a dollar a bunch, and the best varieties bring even a higher price. The latter may be bought at ten cents a bunch in the Agusan River valley, where conditions are ideal for their successful cultivation. I recently measured a series of trunks there which ran from forty inches to four feet in circumference.

Table showing the Number of Cigars removed from Manufactories for Domestic Consumption and for Export during the Past Eight Fiscal Years

Table showing the Number of Cigarettes removed from Manufactories for Domestic Consumption and for Export during the Past Eight Fiscal Years

Table showing the Quantity of Smoking Tobacco Exported during Each of the Past Five Fiscal Years

Table showing the Quantity of Leaf Tobacco Exported during the Calendar Years 1909, 1910, 1911 and 1912

Note.—All figures given above are for unstemmed leaf.

There are numerous varieties of bananas in the Philippines, and some of them are of unrivalled excellence, but fruit of uniform quality is unobtainable, if desired in any considerable quantity. In the course of a brief morning visit to the Zamboanga market I have seen fifteen to twenty different varieties of bananas on sale there, of which a considerable proportion were full of tannin and fit only for cooking.

A banana plantation gives returns at the end of a year from the time of planting, and the fruit ought to be grown on plantation scale for the markets of Cebú, Iloilo, Manila and Hongkong.

Throughout extensive areas conditions are ideal for rubber production, and Para, castilloa and ceara trees all thrive. Those of the latter species reach their most perfect development in Bukidnon, where they grow at an astonishing rate and produce hemispheres of foliage which look almost solid. A plantation of these trees should be not only beautiful to look upon but very profitable.

Conditions in the highlands of Luzón, in the sub-province of Bukidnon, and in other portions of Mindanao, are admirably adapted to the production of coffee. Indeed, one of the few known wild varieties is indigenous to the Philippines. The coffee at present produced is grown in violation of every accepted principle of coffee culture, but is nevertheless excellent in quality, and any surplus not required for local consumption is eagerly bought up for shipment to Spain. In Bukidnon the opportunity for growing coffee upon a large scale is excellent.

There is little doubt that tea could be advantageously produced in the Philippine highlands, especially in northern Luzón.

Throughout extensive regions the soil and climate are ideal for growing cacao, from which is made the chocolate of commerce. It has numerous insect enemies, and careful scientific cultivation is needed to obtain the best results.

A determined and very successful effort is being made by the Bureau of Education to interest the Filipinos in raising corn, which is a far better food than is rice. They are being taught how to grind and cook it for human food, and its use, which has long been common in islands like Cebú, Negros, Siquijor and Bohol, is rapidly increasing. It can be grown to good advantage in the Philippines, and at existing prices its production upon a commercial scale for human consumption would be profitable, but there is another good use to which it can be put. The supply of fresh pork is not equal to the demand, and there would be a ready market, at a high price, for a largely increased amount. Corn-fed hogs are practically unknown in the islands. They ought not to be.

Both corn and camotes flourish in Bukidnon, where the former often attains a height of from twelve to eighteen feet and produces one to four ears to the stalk. Here, as elsewhere, careful seed selection rapidly increases the crop. Camotes, planted after the first ploughing, kill out all grass and weeds, but rapidly impoverish the soil. Planting camotes on a large scale and close subsequent pasturing of the land with hogs would leave the soil enriched and in excellent condition for planting with other crops. A little corn would put camote-fed hogs in splendid condition for the market. In this way it would be possible to raise them inexpensively and on a large scale.

The Philippines produce citrus fruits in considerable variety. Some of the native oranges and lemons are excellent. No care has as yet ever been given to their cultivation. They are never pruned or sprayed, nor is the ground around them kept clean. The larger Philippine towns and cities afford a good market for citrus fruits, and any surplus could be shipped to neighbouring Asiatic cities. Experiments in budding American varieties on to the native stock are now in progress.

In many parts of the islands climate and soil are perfectly adapted to the production of pineapples, which at present usually grow uncared for. One pineapple plantation has already been established, and a factory for canning the product is under construction. Others will follow.

Roselle, from the fruit of which is made a jelly equal to currant jelly in colour, and very similar to it in flavour, grows luxuriantly and produces heavy crops of fruit. An excellent fermented drink may be made from its leaves and stems.

Mangos, commonly considered to be the best fruit produced in the islands, can be successfully canned.

Guavas grow wild over extensive areas, and a properly located factory could produce guava jelly in large quantity.

Briefly, there is every opportunity for the profitable investment of brains, capital and energy in agricultural pursuits along a score of different lines. Such investment would be of immense advantage to the Filipinos themselves. They are neither original nor naturally progressive, but they are quick to imitate, and would follow the example set for them. Their country would readily support eighty million people, and it has eight million, so there is still room for a few foreigners.

If rice is the bread of the people, fresh fish is their meat. Twenty or thirty thousand pounds of fresh fish are sold daily in Manila, and the supply is inadequate to meet the demand. A similar condition exists in many of the larger towns throughout the archipelago. Dried fish is extensively used, and sardines preserved in brine find a ready sale. They may be taken in immense quantities in the southern islands at certain seasons. The intelligent application of modern methods to the taking, preserving and marketing of fish would give immediate and large returns.

Rinderpest appeared in the islands in 1888, and from that time until the establishment of civil government under American rule swept through the archipelago practically unchecked, causing enormous losses to agriculture. For a time it was impossible to plough anything like the normal amount of land, because of the lack of draught animals.

Promptly upon their establishment, the Bureau of Science and the Bureau of Agriculture began a determined campaign against this the most dangerous pest of cattle. The fight has never ceased up to the present time. While the disease is not completely stamped out, its ravages have been reduced to insignificant proportions, and the natural increase of the surviving animals has rehabilitated agriculture.

Good draught animals still bring abnormally high prices. I well remember that in Spanish days an ordinary carabao cost $7.50, and an excellent one could be purchased for $12.50. Similar animals to-day bring from $50 to $75 each, and in certain districts the best carabaos sell for $100 each.

There is still a great shortage of beef cattle. Refrigerated meat is imported in large quantities, but many of the Filipinos do not like it, and will not buy it unless compelled to do so by the lack of any other.

It has been found impracticable to remedy these conditions by importing Chinese cattle or carabaos for the reason that cattle disease is prevalent in the regions from which they would necessarily come, but a way out of the difficulty has now presented itself. Nellore cattle, one of the humped breeds of India, belonging to a distinct race known as zebus, are immune to rinderpest, and do not suffer from tick fever, which is prevalent throughout the islands. They flourish in the Philippines, and do especially well in Bukidnon.

They are much larger than the Chinese cattle now in common use, walk faster, are extremely gentle and make superior draught animals. Their flesh is excellent. Cattle raising in Mindanao on a large scale is certainly possible, and offers a most attractive field for investment.

The establishment of a great silk-growing industry is dependent only upon the necessary capital and initiative. The Bureau of Science has laid the foundation for it by conclusively demonstrating that silk worms, and the mulberry trees on the leaves of which they thrive, flourish here. Worms have now been grown for six years, and have never suffered from any disease. Filipina women and girls, with their deft fingers, would make excellent help for silk culture. Indeed, the opportunity to engage in it would be a great boon to them in many parts of the islands where they now lack profitable employment.

Manufacturing is as yet in its infancy. There are a number of regions where very cheap power can be had by hydraulic development. That the Filipinos make good factory labourers has been abundantly demonstrated in existing tobacco factories, a hat factory, a match factory and a couple of small factories for the manufacture of tagal braid,6 all in successful operation. With plenty of good labour, cheap power and abundant raw materials, important manufacturing industries should be developed.

I will not discuss at length the possibility of engaging profitably in trade. Such possibility exists wherever commodities are bought and sold, and here as elsewhere profits or losses largely depend on the abilities of individuals. But the question of the trade relations, present and possible, between the Philippines and the United States is one of very great importance.

In the next chapter I show the enormous increase in the total trade of the country since the American occupation, and the rapid growth of trade with the United States.

Next to rice, cotton goods form the most important element in the consuming markets of the islands, and the rapidity with which the United States is gaining control of this trade is well illustrated in the following table, showing by years the value of such goods imported since 1904:—

Importations of Cotton Cloth

From a proportion of slightly over five per cent of the total trade in manufactures of cotton in 1904, importations of the American product have increased until they supply fifty-nine per cent of the present local demand!

The following table is of especial interest. It shows in the first column the nature and amount of the total exports from the United States and in the second the nature and amount of United States exports to the Philippine Islands.

The most profitable class of exports is manufactures ready for consumption. It forms no less than 75.73 per cent of the United States exports to the Philippines. The least profitable exports are crude materials for use in manufacturing, which make up but forty-two hundredths of one per cent of the total exports to the Philippines.

Tropical and sub-tropical products are constantly increasing in popularity in the United States, which is able to produce them to so small an extent that although the classes included in this table comprise nearly forty per cent of the total United States imports for the year, there are but two on which duty is levied.

The following table shows the amount and value of tropical products imported into the United States during the year ended June 30, 1913:—

The balance of trade with the more important countries from which we get these products is heavily against us, as is shown by the following table in which I have included Switzerland, not because we get tropical or sub-tropical products from that country, but because it furnishes us embroideries, etc., which could be very cheaply produced in the Philippines. The figures are for the fiscal year ended June 30, 1913:—

There is no such relationship with the Philippines, which during 1912 imported $20,770,536 worth of merchandise from the United States to offset the $21,619,686 worth shipped to that country.

The Philippines could readily produce all of these products in quantities sufficient to meet the demands of the United States if there were proper development of the resources of the islands, which have rich land, good labour and suitable climate, but lack capital and competent, skilled supervision.

The situation has been admirably summed up in the following statement issued some time since by the Manila Merchants’ Association:—

The Philippines should furnish the bulk of the tropical products imported into the United States. The commerce between the two countries should in the very near future increase to $100,000,000 per year each way and should go on increasing more and more rapidly thereafter.