Halfway in 1938

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Part of The American Chamber of Commerce Journal

Title: Halfway in 1938
Language: English
Source: The American Chamber of Commerce Journal Volume XVIII (Issue No. 6) June 1938
Year: 1938
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Fulltext: June, 1938 THE AMERICAN CHAMBER OF COMMERCE JOURNAL 7 Halfway in 1938 • Sugar prices low while tonnage moved is high: spending the tax surplus offsets lowered market returns. The Philippines are hard hit in the commodity markets that absorb the bulk of their surplus farm pro ducts. From the current report of the American trade commissioner at Manila it appears that during the first quarter of last year Manila hemp exports were invoiced at £12,598,499 and in the same quarter this year at £5,723,693, the difference being nearly £7,000,000. Ma nila hemp is the commonwealth’s basic crop second to sugar. It enjoys a worldwide demand. Sugar sells only in the United States, under preferential terms, and this biggest money crop of the commonwealth sells currently in New York at hardly more than production cost. Sugar exports moved to market early this year, the hunch, a correct one, being that the market would sag. This made export totals high for the first quarter, but the satisfaction it entailed was comparative only. . The commonwealth’s quota in the American sugar market is about a million short tons a year. It will continue to be filled year by year, hence all the advantages of employ ment in the industry will continue little changed, but planters’ and mills’ net incomes and the luxury trade rising from their demands will be limited by the low market; and according to our best information, they will therefore be limited for a long time. Secretary Henry Wallace of Agriculture in Roosevelt’s cabinet is a free trader in principle (and so is Cordell Hull of the state de partment) , the influence of the administration will be to keep sugar normally low and not to be too tender toward domestic sugar appeals for a better market. The value of sugar invoiced for export during the first quarter of last year from the commonwealth was £38,239,291, as against £41,089,756 in the same period this year, but a much heavier tonnage is involved in this year’s figures as compared with last year’s. At the end of May this year, practically the whole year’s quota had been shipped. Sugar is encountering bad market weather, with the season ahead quite unpromising. Com monwealth sugar will have to take up its belt a notch or two. The commissioner says March exports rose 42% over February’s and 19% over March’s last year. This was sugar, and partly a revival of buying in Japan (of other commodities) so that no reliable forecast can tell how long it will last. Eighty-one per cent of March’s ex ports went to the United States. Japan’s purchases upped 200% from February, were still 3% below March’s last year: “in the first quarter of this year they were 27% behind last year and made up only 5.7 % of total exports compared with 7.4% in 1937.” Japan’s delinquency as a buyer from the commonwealth will continue during the affaire Chiang Kai-Shek, a tempting lottery if lotteries tempt you much.” Some men who see things in Japan surmise that money is tight there. Some ship captains say they have seen ships dock at Japan and not unload, payment for their cargoes not being forthcoming. Happily, the United States buys four-fifths of all the surplus the commonwealth has to sell, measured in values, and always at fair prices if not high ones. It would be a sorry trade to look to other markets; this will be even truer when Lord Halifax succeeds in giving back to Germany her prewar colonies, for then all Europe will be buying empire and interested here mainly in clamber ing over the tariff wall with goods to sell and running freighters to and from the Islands on gold collecting er rands. Commonwealth commerce is not heavily de pressed by the recession in the United States and the low commodity market, because tax returns from Washington are an offset that will outlast the fiscal-calendar year. There is always the possibility that within that time Wal lace’s wizardry will work and markets will rise: sugar as already analyzed, a moderating exception. During the first quarter of this year export invoices summed £73,683,269 as against £77,881,728 in the first quarter last year. This shows that quantity frequently makes up what price takes off. The people, their own masters, are under the necessity to produce, and so under all circumstances, while a nationwide transportation sys tem constantly and rapidly improving and extending brings more and more families in practical touch with cash markets. EXPORTS, DETAILED STATEMENT OF, SHOWING COUNTRIES OF DESTINATIONS, QUANTITIES, AND VALUE OF DOMESTIC MERCHANDISE Articles and Countries of Destination ABACA United States Great Britain Belgium ............ Germany .......... Other Countries Total ..^.................. COPRA United States Denmark .......... Germany .......... Sweden ............ Netherlands Other Countries YEAR 1937 Quantity Value YEAR 1936 Quantity Value K los 40.674.525 46,899,165 4.913,023 4,861,282 45.686,362 22,305,041 P13.702.086 11,350,747 1.184,908 1,378.502 9.828,413 5,834,717 Kilos 37,841,368 40,223,941 4,676,222 3,694.058 58.139,402 22.549,227 P10,673,421 7,536,139 946,763 842,396 9,489,950 4,690,628 165.339,398 P43.279.373 167,124,218 P34,177,197 4G.297.953 17,658,170 24,918,012 14.082.5G3 2,489.200 5,083,043 2,837.601 844,817 1,183,642 604.206 114,372 116,720 51,752,000 23.827,681 20,410.550 2,910,061 5.325,000 4,042,353 110,528,941 P 5,800,358 108,267,545 P 3,659,079 COCONUT OIL United States .................. 1G0.292.461 Germany ............................ 1,021,086 Canada ................................ 786,676 China .................................. 269,045 British E. Indies ............ 226.045 Siam .................................... 74.018 Other Countries .............. 98,132 P40.342.461 150.023.888 P26.273.827 290,880 1,079.069 167,766 124,483 3.339.015 652,213 60,078 328.267 70,963 67.054 159.008 40.186 17.656 61,670 11,090 24,190 3,028,454 471,722 Total .............................. 162,767.818 P40.926.802 158,909,371 P27.677.767 SUGAR United States ...................... 860.007.653 Pl 15.221.047 899.615 427 P123.854.367 Hawaii ............................ 3.820 286 2.900 260 Guam .............................. 314.872 40.856 53,979 9.510 Hongkong .......................... 2.718,785 150,204 166,061 10.507 Total ............................. CIGARS United States . Great Britain Italy .................. China ................ Hongkong ........ Other Countries Total LEAF TOBACCO United States , Great Britain .. Italy .................. Hongkong ........ Japan ................ Other Countries 871,045,130 P115,412,387 899.838,367 P123.874.644 Number 185.723.185 1,327,310 2,846,846 1,359.580 5.603.485 624,616 237,264 6.897.709 P 5,537.466 45,297 62,499 24,160 199,074 46.733 14,305 215,185 Number 163.419.228 1,159,380 1,434.500 2.500 5,539,745 616,045 354,250 5.808.430 4,956.994 38.441 27,663 104 217.374 46.468 19.724 185.890 204,619,993 P 6,144.719 178,334,078 P 5,492,653 Kilos 35.518 2.759 172,712 4,572,249 216.859 133.889 1.012.308 1,831.505 3.000 60,812 1,226.256 70,749 39.841 426,529 638.416 Kilos 25,061 1,191 1,617,370 1.045.948 187,867 172.575 623.437 9.769.023 1,721 359,749 402,287 55.469 46,683 247.698 3,406,536 8.075 799 P2.485.753 14,442,474 P4.532.606 10 THE AMERICAN CHAMBER OF COMMERCE JOURNAL June, 1938 The American Chamber of Commerce OF THE Philippine Islands DIRECTORS: P. A. Meyer, President (on leave) H. M. Cavender, Vice-President (acting president) John L. Headinyton, Treasurer J. C. Rockwell E. M. Grimm Verne E. Miller S. F. Gaches E. Schradieck ALTERNATE DIRECTORS: E. D. Gundelfinger L. K. Cotterman K. B. Day H. Dean Hellis SECRETARY: C. G. Clifford COMMITTEES EXECUTIVE COMMITTEE: P. A. Meyer, Chairman H. M. Cavender RELIEF COMMITTEE: C. G. Clifford, Chairman MANUFACTURING COMMITTEE: K. B. Day. Chairman A. W. Ralston D. P. O'Brien H. P. Strickler LEGISLATIVE COMMITTEE: E. E. Selph, Chairman Judge F. B. Ingersoll C. G. Clifford FINANCE COMMITTEE: Verne E. Miller, Chairman E. J. Deymek FOREIGN TRADE COMMITTEE: H. B. Pond, Chairman E. D. Gundelfinger PUBLICATIONS COMMITTEE: P. A. Meyer, Chairman (on leave) H. M. Cavender (acting chairman) C. M. Hoskins Roy C. Bennett BANKING COMMITTEE: E. J. LeJeune, Chairman J. R. Llyod RECEPTION & ENTERTAINMENT COMMITTEE: E. Schradieck, Chairman E. D. Gundelfinger INVESTMENT COMMITTEE: P. A. Meyer, Chairman J. C. Rockwell S. F. Gaches SHIPPING COMMITTEE: H. M. Cavender, Chairman E. M. Grimm Chester F. Sharp HALFWAY IN 1938 Business is sketchy but on the whole quite good. If anyone said the Commonwealth is suffering a depression or a recession, he would be laughed out of court. Yet business is obviously moderated by current American conditions, commodity prices being low. Business is affected by the China campaigns, too; while the Chinese boycott of Japanese goods benefits American imports very materially, that Japan buys so little Manila hemp and lesser supplies of Philippine logs curtails sales of textiles and staple tinned goods. Business will improve when commodity markets rise, or when peace comes in China and Japan goes back to work. The table shows the banks to be full of money, and either credit is curtailed as compared with last year or demands for money have declined. The standard bank interest rate of 8% on loans and overdrafts will not yield as long as the tax on deposits remains in force. The gov ernment’s position is contradictory on this point; on the one hand it wants lower interest rates, on the other it stands in the way of them. If business came to a crisis, the government should take this tax out of the waySince the data in the table were first published by the government, later data show a considerable decline| of circulation. Maybe the current balance of trade is not so good—fewer pesos wanted for buying exports, more dollars wanted for buying imports—but the trend may be but temporary. A year ago in mid April, bank deposits summed P228,518,563 and this year at the same period $230,518,563, up 2 million. But bank payments for use of money have greatly changed during this period, very little is paid on deposits now, so it is evident that money is not now used as actively as it was a year ago. Maybe this is as it should be. A year ago, money was being used actively in mining stock speculations— people were losing it right and left. They may now pre fer to leave it banked, even for nothing more than safety. Anyway, loans as compared with last year are down 3 millions, and one cause for this must be banks’ reluctance to accept mining shares as collateral. Cats and dogs of mongrel breeds could be hocked last year, but what the stock is and what dividend it normally pays makes a difference this year. Probably you can get a legitimate business loan easier now than you might have a year ago- The banks are not coining money, exactly; on the other hand, they have a cold-eyed desire for paper sound ly secured. There is considerable cutting up about releasing the Pl 13,000,000 from Washington derived from the coconut oil excise tax. If this halts public works on a big scale, it’s a bad time to do so and the business of the country will feel it keenly. The whole situation is in hands of theorists, some of them gloomy perennially about the country’s probity and economic capacity. For President Quezon, this should make a nice little inside fight which ever way it turns out. It is also certain that in the end, when wounds have to be bound up, nobody will be to blame. If Washington thinks hard times are coming on here, and therefore believes the treasury here should be kept running over while its own is flat, it can bottle this re venue up and bring on hard times. Then it can say, it was right all the time. Barring such pedantry, the busi ness year will be fairly good—may even be very good in deed. For the time being, President Quezon has can(Please turn to page 11) Combined Data from All Banks in the Commonwealth: Mid-April Item Year (Time about Mid-April) Total loans, discounts .1932 .1937 J 938 and overdrafts Pl 12,478,119 P182,223,075 P185,384,203 Total investments 44,967,964 59,474,927 54,630,920 Total cash on hand 13,920,826 41,286,559 63,751,593 Total demand deposits 49,454,078 120,857,918 118,100,702 Total savings deposits (no report) 50,321,112 54,416,033 Total time deposits 68,119,766 57,806,861 58,001,828 Total capital of domestic banks (no report) 24,663,300 24,663,300 Total surplus, reserves, and undivided profits (no report) 34,692,284 26,199,997 JAMES M. ROBB ATTORNEY-AT-LAW property—wills—general practise Kneedler Building Tel. 2-16-44 IN RESPONDING TO ADVERTISEMENTS PLEASE MENTION THE AMERICAN CHAMBER OF COMMERCE JOURNAL June, 1938 THE AMERICAN CHAMBER OF COMMERCE JOURNAL 11 Manila’s Local Meat Supply Science and invention have pool-, ed their efforts during more than ten years in the Philippines, to bet ter Manila’s local meat supply. The invention part of this is the elec tric refrigerator, many stalls in the city markets have provided re frigerators for keeping and dis playing their meat. The old days are quite gone, now the fresh clean meat is well exhibited and much as it should be. The science part is a longei' more discursive story. It runs from the College of Agriculture through many of the public schools to hundreds of families as far north as llokos, as far south as Tayabas and Batangas, raising porkers for Manila. Science in cattle raising leaves Luzon and extends all ovei’ the archipelago. It is not limited to breeding, either, but grasses are introduced and put under experi mentation in hope of seeding pasturage that will, add weight and fat to grazing steers. The quest is only measurably successful, but the point where good beef is produced has been reached. Then too, science is in charge at the slaughterhouse on calle Azcarraga. Every carcass is inspected, and the City sends the rejected ones to its crematory to be de stroyed. They are not even sold to soapers, as they once were, the City will not take the risk that turning them over to a contractor involves. Bad meat is burned up, that’s all there is to it, and the owner of it loses all, es caping only the payment of the killing fee. But the slaughterhouse, at time of writing (May 18) is in a bad way. It should be painted. Its copings should all be repaired, also its floor of granite blocks and its drains. The masonry at the bases of the structural beams should be repaired and made to standard size. The offices should be repaired and painted. Sanitary provisions should be provided for personnel. Neighbor ing streets should be asphalted, and an ajustable chute should be provided for the unloading of hogs from trucks. In our knowledge extending over 20 years the slaughter house has never been more run-down than it is today. This reflects on others than on Superintendent Manuel A. Aguila, who keeps the place clean and, as nearly as may be, odorless. But the physical condition of the plant is disgraceful, an imposition on all employees concerned with it and on livestock men who have to patronize it. Manila’s annual consumption of local meat varies little from year to year. It was 12,248,459 kilos in 1935, 12,401,625 kilos in 1936, and 12,407,467 kilos last year— rather a remarkable comparison that shows a prevalence of hard times among the city’s masses because the po pulation is growing very materially. This deduction can’t be conclusive however until checked with the con sumption of fish, fresh and tinned and salted, since fish is the public’s favorite meat. The average year’s kill at the slaughterhouse is 183,462 animals: 138,957 hogs, 31,865 cattle, and 12,640 carabaos whose meat is darker, coarser, and stronger than beef. The total average dressed weight of all these animals is 11,772,160 kilos. Carabaos dress an average of 142.66 kilos, cattle 116 kilos, hogs 43.33 kilos. Varia(Please turn to page 13) Halfway In. (Continued from page 10) celled release of more than 20 millions of public works, funds while the argument goes ceaselessly and remorse lessly on, behind curtains. There are two schools, of course. One says, nurse ’em along; the other, burn ’em with experience—every tub on its own bottom. The country is so remarkably productive that over long pe riods it makes small difference which view prevails. SPRING STEEL The Commonwealth’s economy rests on spring steel. It can never be long depressed, since it springs back to the common norm. Nor can it be much expanded, for long, since from this extreme too it inevitably recoils. Since no one has ever taken the pains to describe this basic phenomenon of Philippine life, now is a good time for it. It is the peasants, cotters and cottagers, cotters if tenants, cottagers if independent on their own hold ings. They are the bulk of the people, proud of their honest traditions, living by customs of their own and • shunning all else with prudent instinct. All they reach out for is education. When they can sell their surplus, it is well; when they can’t make shift to do this, they still live. Always they live by the traditional standard. With more wealth they add something to their clothes, travel about a bit, etc., but their house and food remain what they were. They are consistently busy, without over working themselves, and they are never extravagant. This describes with considerable accuracy fifteen million Filipinos, if not more, and perhaps it should be added that the rule of elder authority prevails. This explains why extreme booms and depressions are absent from the country’s economic history. They have no place in the people’s economy. While the people adhere to these virtues ways, fear not. Nothing drastic will happen. —W. R. IN RESPONDING TO ADVERTISEMENTS PLEASE MENTION THE AMERICAN CHAMBER OF COMMERCE' JOURNAL