The Marsman Agreement with the government

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Part of The American Chamber of Commerce Journal

Title: The Marsman Agreement with the government
Language: English
Year: 1950
Rights
Fulltext: Were some of our higher officials to see for themselves how such measures are and must be carried out by the functional personnel, and how they are taken by those who are the victims of them, they would quickly see how seriously the dignity of the Government is impaired by them and how seriously they affect the attitude of these people to the Government and even to the country and people the Government represents. In rallying the nation and calling for the employment of every ounce of energy and the exertion of every effort, let us bear in mind another one of Merriam’s statements: "The skills of government when successfully used produce what we call morale — meaning good morale, good feeling, a sense of satis faction with the ends of the community and with the ways and means of achieving these ends, in so far as this is within the purview of the political. In ordinary times, all this is taken for granted, but, when the skills fail, the road becomes rougher and rougher. . .” The Marsman Agreement with the Government significant and While we have had no opportunity to study its terms in detail, we consider that the contract recently concluded between the Government and Mr. J. H. Marsman for the development of a large-scale abaca project on the public lands reservation of the National Abaca and Other Fibers Corporation (a govern ment company) in Davao, is a most ■omising development in the relations between the Government and private enterprise. The project involves the utilization of a maximum of 7,500 hectares of land for a period of 15 years, but the agree ment does not constitute a lease, as the present land laws do not permit the lease of such a large tract; it is, instead, an operating agreement “for and under the administration and control of the NAFCO”. Whether the terms which are summarized, as announced by Malacafian, elsewhere in this issue of the Journal, will prove practicable in all points, is a matter as to which we shall not hazard an opi nion, but the venture is in line with the large-scale agri cultural development which this Journal has been advo cating. One point which might appear to make the contract less significant than it would otherwise be, is the fact that Mr. Marsman, a Hollander by birth, is a naturalized Philip pine citizen, but under the “Parity agreement”, which provides for equal rights between Americans and Filipinos in the development of the natural resources and the public utilities of the country, the same opportunity given Mr. Marsman would presumably be open to Americans, and similar agreements might be worked out by them with the Government if the terms were found to be mutually acceptable. In reply to that part of the address of the Governor of the Central Bank before the Rotary Club last month, * in which he referred to the attitude of the Reply to American Chamber of Commerce and of this Governor Journal to the present government controls Cuaderno over imports, credit, and exchange, we could do no better than to quote a paragraph taken from the Annual Report of the pastPresident of the Chamber. Mr. Stevens said: “I wish to make it clear that we can no longer question and do no longer question that certain controls have become necessary. At the present time we are only fighting to keep them down to a minimum and to have them well administered. We have continued, however, to call attention to the point of why these controls have become necessary. We believe that they would not have become necessary if the proper basic policies had been adopted and followed with respect to bringing in outside capital to develop our local production and our export trade more rapidly so that our imports and exports would naturally have come into better balance.” This, it seems to us, is clear enough. ♦Primed in full elsewhere in this issue of the Journal. With respect to Governor Cuaderno’s statements concerning the alleged necessity of “government inter vention in the economic life of the people”, in which con nection he referred to the “events of the last thirty years” and to the “social and economic planning of the United Kingdom and the ‘New Deal’ ”, he touches on a great controversy which continues to rage between government and business everywhere and upon which whole libraries of books have been written. The writer will only say that while Adam Smith’s “assumptions have been called into question”, as Governor Cuaderno says, so have the theories of the late Lord Keynes, the one economist chiefly responsible for the present almost universal government interference in industry, trade, and finance, which is, to some extent, only a revival of the dis credited old policies of the Mercantile System following the close of the Middle Ages. Keynes’ ideas are not infre quently referred to as “Keynesian poison”. We can not possibly review all the arguments here, but an analogy may be useful. A national economy under the strict government control now conceived by many bureaucrats the world over may be compared to a body which is continuously being dosed with various glandular extracts. Physicians rightly use this therapy when the bodily balance has been disturbed, but a physician who would keep a patient under the influence of endocrinous drugs all the time would go to jail for malpractice. It is easy enough to produce certain economic results, stimulative or depressive, by tampering with, especially, the financial system of a country at certain points, affecting credit, for instance, and this may at times be beneficial, but the benefit depends largely upon how little of it is done. It is only rarely that the economic system needs or can be benefited by economic doctoring. Take the recent European currency devaluations, first hailed as skilful doctoring. Henry Hazlitt, writing in Newsweek, said recently: “Even those responsible for the devaluation of some 30 currencies since September admit that the results have been disappointing. Deva luation was, in fact, the wrong remedy. What was called for was not continued exchange control with lower fiat rates, but the restoration of free exchanges. This is a necessary transitional step to eventual return to a full international gold standard. Gold means real stability based on freedom. Exchange control means a fictitious stability based on coercion. Exchange control subordinates the citizen to the bureau crat. Free exchange rates subordinate the bureaucrat to the citizen.” The whole article is well worth reading,—Newsweek, January 9. No one talks anymore about the old laissez-faire. The National Foreign Trade Council in one of its publica tions issued some months ago, drew some clear distinctions as follows: “The American system of free, private, competitive enterprise is not pure laissez-faire, since it operates within a framework which com bines enlightened self-discipline with a substantial measure of intelligent and purposive regulation by government. Legislation enacted by democratic process to promote the general welfare and to assure public order and safety, to eliminate unfair business practice, or to regulate public service enterprises which are natural monopolies—all these are fully consistent with this thesis; but while private enterprise readily adapts itself to an intelligent system of law and regulation designed to enhance the social purpose, stability, and security of the national eco nomy, it can not willingly accede to arbitrary governmental inter vention in the processes of production, investment, and trade. Such intervention is the antithesis of economic freedom and is in essential conflict with the fundamental tenets underlying the private enterprise system.” As for Governor Cuaderno’s statement that the Journal is in some part “responsible for creating abroad an unfavorable climate” for foreign investment here, he might as well have said that a barometer is responsible for the weather. All the “boosting” the Journal and the Chamber it self and all the chambers of commerce here together could conceivably do, and what all of us would so gladly do if we 50