The Fortune and Wall Street Journal articles

Media

Part of The American Chamber of Commerce Journal

Title: The Fortune and Wall Street Journal articles
Language: English
Source: The American Chamber of Commerce Journal Volume XXV (No. 7) July 1949
Year: 1949
Rights
Fulltext: Editorials “ . . . to promote the general welfare” HERE on this spot was boro a nation that will be Adept in all the humanities. Spreading in cir cles, as when A pebble is thrown into a morning lake, Its concepts will cover a continent with a vision of dignity At last made real. Here a race of men will evolve That will instruct the world in justice and in love. A race of men to whom the entire world is a religion, Whose vessels, laden with much more than car goes. Will pass through the seven oceans, bearing with them The beliefs of all our countries, all our hearts. From The Poem on Bunker Hill by Harry Brown The American Chamber of Commerce of the Philippines extends its felicitations to the people and Government of the Republic of the PhilThe Fourth ippines on the occasion of the third anof July niversary of the establishment of Phil ippine independence, — on which same day Americans in all parts of the world celebrate the 173rd anniversary of the independence of the Mother land, the United States of America. When the February issue of Fortune came out with the article by Dr. Claude A. Buss entitled “Na tionalization in the Philippines”, The Fortune and in which he said that “some Wall Street Journal things are going on there that Articles have U. S. businessmen wor ried”, the American Chamber of Commerce Journal withheld comment. Recently (June 17) an article appeared in the Wall Street Journal which was more or less the same in the upshot, but bit deeper and therefore created a greater furore. We realize that readers both here and in the United States would be surprised and would possi bly misinterpret the Journal again remaining silent. In our opinion, both the Fortune and the Wall Street Journal articles should be considered by us in the Philippines not on the basis of whether the va rious statements made are the whole truth and noth ing but the truth, but on the basis that they are made at all. We should recognize that these two articles embody definite American opinion on matters of transcendant importance to this country involving its entire future development and welfare. If American officials, though unnamed, and American businessmen are authoritatively reported to be “worried”, then we can not argue about that but must accept it as a fact. What we should do is to look about us to find out (if we do not know this well enough already) what they are worried about and do something about that. We can not remove the w'orry, the doubt, the mistrust except by going to the roots of these feelings and removing their cause. The Wall Street Journal article was published under the following headlines on the right-hand co lumn of the first page, top of the column, being the leading article in the issue: Baby Marshall Plan ECA-Type Plan to Put Philippine Islands on Their Feet is Failing First of Big U.S. Foreign Rehabilitation Programs is Now Three Years Old Nearly $1,500 Million Spent We can maintain that the rehabilitation plan is not failing, we can argue about the exact amount spent, but even the best and the most hopeful friends of the country must accept the truth of the state ment made in the text of the article that there is a "bog-down” in the Philippines. While considerable progress has been achieved, it must be admitted that production and trade still run far below the pre-war norms and that the re covery is not as far advanced as it might and should have been because American capital, other than gov ernment funds, has not come into the country in the volume required and this is because.... The Wall Street Journal sums up the causes un der the following headings: The natural “growing pains’’ or difficulties of a country trying to recover from a serious war and to adjust itself to the exercise of national sovereignty at the same time. The belief of the Filipinos that if they get into “dollar difficulties”, “Uncle Sam will bail them out”. Government “indecision” as to its economic policies and American fear of “nationalization” and a “big government hand in business.” “Over-ambitious” government plans. We may argue about the relative importance of the causes listed and some may argue about their actual existence, but we can not argue away the Amer ican feeling about these aspects of the situation in the Philippines; that feeling exists. And certainly no one conversant with Philippine developments can say there is no warrant whatever for such a feel ing. This Journal has for several years been very frank in stating what we believe to be the American view of the economic policies being pursued and the various legislative measures adopted to implement them. These various policies and laws were and are not all wrong; some of them were and are wise. But there have been some aspects of policy and a number of legislative -acts which have created the feeling in United States official and financial circles which both Fortune and the Wall Street Journal, two of the most authoritative business publications in the world, have now described in terms which can not be mis understood. And their analyses are backed by the material fact that capital has not come to the Phil ippines in the volume hoped for and so desperately needed. The National Foreign Trade Council of New York was recently quoted in the press as stating that the United States “must give ‘much more’ than its al ready substantial assistance to the Philippines” and that “the Governments and business committees in both countries can and must cooperate in ‘developing a vigorous program for Philippine economic recovery and growth.’ ” The Council went on to say: “Over the years, American enterprises in the Islands have made noteworthy contributions to economic stability and pro gress there. Changed conditions now exist, but the continu ance and expansion of American enterprise in the Philippines would contribute to economic stability and progress there. The efforts of Philippine enterprise would be enhanced... "The starting point for development of the PhilippineAmerican program should be intensive consideration of rea sons why American capital is not now going into the Philip pines. “Firm intention to take the steps thereafter required by the Philippine and United States Governments is essential to provide inducements for American private capital invest ment in the Philippines... “Prompt action by the Governments of the Philippines and the United States should remove obstacles to private in vestment and trade so that Philippine exports and increased investment of domestic and foreign capital can cover Philip pine requirements for imports and economic development." There we have the answer: Expansion, not limitation, restriction, and discrimination. Industrialization has become a word to conjure with. Too often we are tempted to think that the industrialization of the economy “Industrialization” will end poverty, solve all our in the Philippines economic and even many of our social problems, and make the country great and powerful. Grandiose schemes are conceived, and if outside private capital can not be convinced of their sound ness, why, then the Government itself will undertake the projects. There has already been an “ear-mark ing” of hundreds of millions of pesos of the people’s money for the purpose, mostly from the currency re serve, and it is planned to borrow hundreds of mil lions more, — from abroad, if possible, or else from the people here . . . But have we got it? Let us remember that a government is actually only what might be called a committee of the people, and that the limits of what a people can do are the limits of what a government can do. If a people are poor, the government must needs be poor. Govern ment borrowing from abroad is generally possible only under special circumstances and under gua rantees that the loans will be productive and will ul timately be repaid. Even when government bonds are successfully marketed, this is, of course, not the end of the matter; they must be serviced and eventually redeemed with money that comes from the people, the tax-payers. Though government aid is often valuable in ini tiating new economic enterprise, — in a manner which is likened to “pump-priming” (one throws a little water into a pump to start the suction which will draw the water from the well, but there must be water in the well), the money which a government borrows and then loans or invests ultimately comes from the people. And to paraphrase a statement in the last annual report of the President of the Interna tional Bank of Reconstruction and Development. — Sound investment over the long pull must be based on the willing assets of the saving public, rather than on the power of the tax collector. The actual long-range effect of a government going into business is not to encourage private en terprise, — as is said to be the aim here, but to dis courage it. And government-in-business brings in its train all the evils inherent in political control over what are essentially non-political activities, — the usual inefficiency and wastefulness of bureaucratic organization, and often also graft and corruption; most serious of all, if government-in-business becomes general, it leads swiftly to the destruction of democ ratic government and the establishment of totali tarianism. The topic, however, is not government-in-busi ness, but industrialization, whether by government or private enterprise. As a matter of fact, the Philippines has been in dustrializing for many years and this movement has in the main been very sound. According to the census reports, there were only some 2000 manufacturing establishments in 1903, with a total investment of 273