The American Chamber of Commerce Journal Vol. XXII, No.10 (April 1947)

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Title: The American Chamber of Commerce Journal Vol. XXII, No.10 (April 1947)
Issue Date: Vol. XXII, No.10 (April 1947)
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extracted text: 2^3 JL Vol. No. & April, 1947 50 Centavos INHELDER INCORPORATED Dealers in: ★ PHARMACEUTICAL SUPPLIES ★ INSTRUMENTS ★ GROCERIES ★ TEXTILES a flavor like that of.... Mt!® Bottled in the U. S. A. Fine Aniciican Whiskey • Preferred throughout the Americas Sole Importers SORIANO TRADING COMPANY M.R.S. Bldg'. — Tel. 2-79-61 — Manila 5TH FLOOR TRADE & COMMERCE BLDG. TEL. 2-65-48 souco Sole Importers SORIANO TRADING CO. M. IL S. Bldo. Tel. 2-79-6! FAR EAST AMERICAN COMMERCIAL CO.. INC. ■ I M P 0 R T E R S * WHOLESALERS ■ E X 1’ O R T E R S STEEL OFFICE FURNITURE • OF FICE EQUIPMENT & SUPPLIES GENERAL HARDWARE • MACHI NERY • TEXTILES • COSMETIC’S S II O E S • TOYS • NOVELTIES HOSIERY • PLASTIC’ & LEATHER BELTS • PAPERS. ETC. MA IX Ob'PICK THIRD ELOOR, YVTIVO BI.DG. 1) ASM A RINAS, MANILA TELS. 2-85-86 A- 2-85-87 Since 1887 our advantages of superior workmanship, facilities and experience are evident in the numerous printing jobs we have done for business leaders. ------------CMS C {WIN, INC. OFFSET LITHOGRAPHERS ’ PRINTERS 2057 AZCARRAGR . MANILA, PHILIPPINES DE LA RAMA LINES LEADERS IN THE SHIPPING INDUSTRY EXPRESS CARGO-LINER SERVICES TO AND FROM THE UNITED STATES CONNECTING AT MANILA WITH OUR INTER-ISLAND VESSELS THROUGH BILLS OF LADING ISSUED TO ALL PRINCIPAL PHILIPPINE OUTPORTS ■ THE DE LA RAMA STEAMSHIP CO., INC. HONGKONG & SHANGHAI BANK BLDG. TEL. 2-82-04 NEW YORK • SAN FRANCISCO • LOS ANGELES SHANGHAI • HONGKONG AA SORCO Sole Importers SORIANO TRADING CO. M. R. S. Blds. Tel. 2-79-61 The American 'Chamber of Commerce Journal April, 1947 1 ^Announcihg SUMMER DISCOUNTS FREIGHT FASSENGERS Effective Immediately and up to July 1,1947 on all freight to and from any FEATI point in the Philippines QCVCVET on all.round trips to and from -z /ovJTU any FEATI point in the Phil ippines FEATI is pleased to grant these special freight and passenger discounts for the benefit of the public in general, vacationists, students, and all our other flying patrons. SHIPPERS are invited to phone, write, or visit us to see how economical it is to ship all kinds of cargo via FEATI, with pick-up service. The American Chamber oi Commerce Journal April, 1947 2 Published Monthly in Mamin, Philippines The American Chamber of Commerce of the Philippines. Publishers Robert S. Hendry, Editor Entered as second class matter Dec. 10, 1946 at the Post Office nt Maniln. P. I. Subscription rntcs: Ono year in the Philippines, P5.00; United States $5.00 U. S. Currency. American Chamber of Commerce of the Philippines B. GABEKMAX STOCK BROKER 328 Dasmarinas DIRECTORS F. H. STEVENS, President J. L. MANNING, Vice-President FAY C. BAILEY, Treasurer E. G. Baumgardner Max Blouse John F. Cotton Samuel Garmezy G. C. Miller J. A. PnrriBh LEON ROSENTHAL, Executive Vice-President VOL. XXII, No. 10 April, 1947 Member MANILA STOCK EXCHANGE Table of Contents Page “Capitalistic Exploitation” by A.V.H. Hartendorp ... 5 Manila Rope.................................................................... 6 Bureau of the Census and Statistics ......................... 8 National City Bank of New York............................... 9 CODES: A B C 6 Ed. Bentley 2nd Ed. CABLES: “IPEKDJIAN” iPEKDJinn mERCHnnoisinG co. Economic State of the Nation by Dr. Leon Ma. Gonzales ................................... 10 The Stock Market by A. C. Hall & Co......................... 12 Estimated Income of the Philippines (1939 and 1946) 16 Experts Join Advertising Firm ................................. 22 Statistics on Banking Resources, Liabilities and Miscellaneous Activities ....................................... 24 IMPORT—EXPORT 312 Ayala Bldg. (Nat. City Bank Bldg.) Manila, P. I. The American Chamber of Commerce Journal April. 1947 3 SUPERIOR GAS & EQUIPMENT COMPANY PRODUCERS and EXCLUSIVE DISTRIBUTORS of HIGHEST-PURITY OXYGEN and ACETYLENE gases ★ “NATIONAL” CARBIDE ★ WELDING EQUIPMENT and SUPPLIES EXCLUSIVE SUPPLIERS of "SUPERFLAME" BOTTLED GAS and "TAPPAN" GAS-STOVES with Complete Installation and Service Facilities OFFICE and PLANT: Byng St. Mandaluyong (near Mandaluyong Bridge and Shaw Blvd.) Tel. 8-72-80 ED. A. KELLER & COMPANY, LTD. The Acadia Co., Inc., New York. American Lead Pencil Co., Hoboken, N. J. American Safety Razor Corp., Brooklyn, N. Y. American Window Glass Co., New York Ames Company, Inc., Elkhart, Indiana Bristol Laboratories, Inc., Syracuse 1, New York. The Coleman Lamp & Stove Co., Toronto and Chicago Central Paint Varnish Works, Brooklyn, N. Y. Columbia Ribbon & Carbon Mfg. Co., Inc., Glencove, N. Y. GENERAL MERCHANTS—INSURANCE AGENTS 3rd FLOOR WISE BUILDING 178 JUAN LUNA, MANILA TEL. 2-71-05 Agents for: Eterna Watch Company, Brenchen, Switzerland Felton Chemical Co., Inc., Los Angeles, Cal. S. C. Johnson & Son, Inc., Racine, Wis. The Maggi Company, Kemptai, Switzerland Lab. Chima S. A., St. Gall, Switzerland Miles Laboratories, Inc., Elkhart, Indiana Pierce Watch Company, Bienne, Switzerland Robapharm Soc. de Lab., Basel, Switzerland Roger & Gallet, Paris-New York Ulysse Nardin S. A., Le Locle, Switzerland The Wander Company, Chicago, Ill. General Agents for: Franklin Fire Insurance Company of Philadelphia Great American Indemnity Co. Insurance Company of North America Phoenix Assurance Company Ltd., of London Samarang Sea & Fire Insurance Co., Ltd. Switzerland General Insurance Co., Ltd. FIRE MARINE MOTOR CAR WORKMEN’S COMPENSATION UNDERWRITING: INSURANCE Tlic American Chamber of Commerce Journal April, 1947 " Capitalistic Exploitation ” By A. V. H. Hartendorp Those opposed to the ratification of the constitutional amendment providing for an American-Filipino parity of certain rights in the de velopment of the natural resources of the country and the ownership of public utilities, have called atten tion to the dangers of what is call ed “capitalistic exploitation”. These are semantically dangerous words. They are vague in mean ing, yet are intended to imply a sel fish and anti-social utilization of the natural resources even to the point of, first, waste, and then exhaustion; general abuse and enslavement of workers; and, ultimately, general extortionism and universal despoil ment. Surely, nothing worse could be imagined, but the terms are self contradictory and nothing as bad as is thus conjured up could even get a start anywhere in the world. Sociologists recognize, besides the family and the religious institutions, only two other great institutions in the life of mankind, — the govern mental and the economic. Economic institutions are indeed fundamental in importance, hence our great pre occupation with them. It should not be a matter for surprise that the people of the Philippines are show ing such a keen interest in the pro posed legislation because it is in fact very closely related to the economic future of the country and to the suc cess of its government and even, to no inconsiderable degree, the very biology of the race. It is a good thing for the Philip pines that public attention should thus be focussed on the funda mentals of the economy of the coun try at the outset of the now politi cally independent Republic. No na tion ever achieved prosperity and greatness without strongly develop ed economic institutions, which only can guarantee to the population an abundant life. There are many grave questions concerning the economic institutions of the modern world, their relation to government, and their efficiency. While historically these have develop ed under a system of relatively free enterprise under competitive condi tions, an important new departure in government-owned and controlled economic institutions has been deve loping for a number of decades in Soviet Russia. This development has achieved considerable success and is being watched with great interest The American (Chamber of Commerce Journal April. 1947 everywhere. Midway, if not transi tional, systems- between individualis tic and socialistic institutions are evolving in the Scandinavian, coun tries and within the British Empire. Yet up to the present, the esta blished economic systems, the norm for the greater part of the world, is the so-called capitalistic system. It is also a fact that the greatest and most powerful, are the capita listic nations; that they have reached the greatest heights in production both in the extractive and the manu facturing industries; that in these nations the masses of the people are the best housed, the best clothed, the best fed, and, — most vitally im portant, are the freest and the most secure in the enjoyment of their in dividual and civil rights. The competitive feature of the ca pitalistic system should not be over emphasized,-for while there is com petition, the much more essential and significant feature, under capi talism as well as socialism, is coope ration. Rivalry, opposition, conflict, — as exposed in such phenomena as bankruptcies and strikes, attract especial notice because of their com parative rarity. Successful adjust ments between various branches of industry and various enterprises, and harmonious cooperation between capital and labor for long stretches of time, tend to be given less signi ficance than should be the case. All of the various economic sys tems so far developed, — capitalis tic, fascistic, cooperative, socialistic, and communistic, resort to the mass production methods which the im provement of agricultural methods and the invention of power machi nery made possible. Out of the scar city economy of the past, marked by unavoidable poverty, misery, starva tion, and wholesale death, the world has entered into an economy of abun dance, barring war, and this is hav ing the effect of making ideological differences as to rival forms of pos sible economic organization much less important than they were in the past. The eradication of poverty, abundance for all, now seems possi ble under whatever economic and governmental systems that may be worked out in various parts of the world, or ultimately, perhaps, for the world as a whole. It would be futile and foolish to deny that modern capitalism brought in many evils as well as much good, especially when it first began to take form. Many of these evils have gra dually been eliminated. Undue con centration of economic power, great inequality of income, extensive un employment, recurring depressions, — these are evils from which the ca pitalistic world still suffers, but that they are inherent in. the system and not possible of correction has not been proved. Great advances have already been made within the system' in government control of monopoly, in the equalizing of income through the graduated income tax and mini mum wages, in unemployment, acci dent, and old-age insurance, and in government control of production and prices. In these ways, the capi talistic nations have departed from the theoretical purely individualistic laissez-faire system, — which, in fact, never existed anywhere. The probabilities seem to be that the ca pitalistic and socialistic systems will gradually approach each other and that ultimately some combination of the two will be effected and become general. “Scientific” communists have never condemned capitalism out right, but have recognized it as a necessary stage in the economic de velopment of the world. What, however, still seems to be the more general opinion of man kind is that the individualistic prin ciple in human society is a most pre cious one, that the communistic prin ciple can be carried too far, and that great concentration of power in. any government is fraught with the most terrible danger to the people of any nation. Until the invention of some more effective system of checks and haiances than anything devised so far, no people who prize their liberty and their individual rights can favor any form of totalitarian government. Just as there is safety for the indivi dual and society in the separation of Church and State, so there is safety in at least some degree of separation between governmental and economic institutions, although the govern ment should of course be supreme so long as it is a government of the people, for the people, and by the people. It is of special importance in the Philippines that the mother country, America, is a capitalistic democracy and the greatest of them all. It is hardly possible that the Philippines could follow any other path than that on which her feet are already set. The Philippines seems happily des(Continued on page 13) 5 Manila Rope Never one of the country’s great industries, the rope and twine, or cordage industry of the Philippines nevertheless has two characteristics that give it particular interest. The first of these is that though it has always been largely an export in dustry—in 1940 approximately 84 c/o of the total output was sold abroad— it has never been as dependent on. the American market as other export in dustries of the Philippines. Less than half of the total shipped out of the country in 1940 was sold to the (Photo by Mayflower Studio) Machine shop at the Manila Cordage Factory (Photo by Mayflower Studio) "Layer" converting three strands of yarn into finished rope. United States. That year, the total export amounted to 10,400,000 kilos, which American buyers, limited by quota, took, 6,000,000 pounds (2,700,000 kilos), or 26% of the export total. The total manufacture of cor dage in the Philippines in 1940 amounted to 12,300,000 kilos, the disposition of which was as follows: 20% sold to the United States, 64% sold to other countries, leaving 16% unexported. By directing our attention to that 64 % (or for 1940, 7,800,000 kilos) sold to other countries, we may note the second interesting characteristic of this industry. The market for Manila cordage was a genuine world market. To perhaps a greater extent that was true of any other product manufactured in the Philippines, Manila cordage penetrated all parts of the world. The Yearbook of Phil ippine Statistics (1940) lists 51 countries as sharers in the 7,800,000 kilos exported to countries other than the United States. Heading this list was the Dutch East Indies with 970,000 kilos. Prior to the war, the industry was composed of four factories, all of which were located in Manila. They were the Johnson-Pickett Rope Co., the Manila Cordage Co., Elizalde Rope Co. and the General Manu facturing Co. The last of these was comparatively unimportant, as dis closed by its export quota to the United States of only 28,000 pounds. Throughout the occupation, the Jap anese kept the Elizalde and Manila Cordage factories in operation. But the other two were completely dis mantled—the Johnson-Pickett (the control of which had been purchased by the Elizalde interests before the war) and the General. This left the Philippines with two modern rope factories, Manila Cordage in Paco and Elizalde in Binondo. These two plants emerged from the destruction of war relatively un scathed. Looters had removed some of the light machinery, such as hand and machine tools, motors, belting, etc. But buildings and heavy equip ment were practically intact. With the replacement of some of the light equipment which had been looted and the repair of some of the heavy equipment, the rope industry of the Philippines was ready to resume production. And production was actually resumed (under contract to the Procurement Division of the U. S. Army) in July, 1945. Commer cial production, however, was de layed for almost a year. The army cancelled its contracts effective April 1, 1946, at which time both Manila Cordage and Elizalde re turned to a commercial status. In spite of its comparatively ad vantageous position from the point of view of potential production, and in spite of an urgent worldwide de sire for its output, the rope industry of the Philippines, after a year of commercial operations, is still far The American Chamber of Commerce Journal April, 1947 6 from regaining its prewar position. According to available information, current production of the two operat ing factories is approximately onethird of prewar production, which in turn mea,ns that the industry has been, able to give employment to only about one-third of the number of laborers employed before the war. Both raw materials prices and labor wages are considerably higher than before the war (the latter being ap proximately four times the prewar scale) but neither of these facts are considered the main barriers today to the resumption of normal produc tion. In looking for the factors that restrict the development of this in dustry, one must direct his attention abroad, to conditions existing in those countries that constituted the markets for Manila rope before the war. The largest single market, the United States, absorbs the full quota permitted by the Bell Trade Act with no difficulty. But what of the 64% of the 1940 production that went to other countries? So far at tempts to reestablish the world markets for this Philippine product have met with little success. Accord ing to those engaged in this industry, the demand for Manila cordage is as great as ever. Before the war, the entire Far East looked to Ma nila for practically all of its first quality cordage. This included China, Dutch East Indies, Malaya, Siam and India. South America and South Africa also purchased) considerably quantities of high grade cordage. In all of these sections of the world, there are evidence of a strong demand for the Philippine product. But for two important reasons, this demand has not become effective. Exchange with which to purchase in the Philippines has been a limiting factor in each instance. Potential buyers have found it impos sible to secure adequate amounts of U. S. or Philippine currency or ex change witli which to make their pur chases. In the second place, world shipping conditions are still far from normal. This factor has been part icularly operative with regard to the South American market. Before the war, shipments could be made, either direct or at least on through bills of lading to practically every port in the world. Today, this situa tion has not been entirely restored. Until transportation facilities be come available on something ap proaching normal conditions, and exchange conditions improve many countries which formerly were active customers for Manila cordage will find it impossible to resume that relationship. (Right) Preparing fibre for rope spinning. (Middle) Sorting and grading aba ca fiber. (Bottom) Spinning jennies turning fiber into yam. (Photo* by Mayflower Studio) 7 The American Chamber of Commerce Journal April, 1947 Bureau of the Census and Statistics Statistical Nerve Center Of The Government Created by Commonwealth Act No. 591 on January 2, 1941, the Bureau of the Census and Statistics was less than a year old when war broke out. But from the stand point of the nature of its work, it was as old as any bureau in the government even on its first day of operation. For it absorbed all of the statistical work of some of the i*§est bureaus in the government, among which were the Bureaus of Health, Plant Industry, Customs, Animal Industry, and Commerce and the National Library. By concentrating all activities in the field of organized facts and figures in one bureau, President Quezon’s purpose was to simplify some of the complicated governmental mach inery. Mr. Ray Hurley, American census expert who had organized the taking of the 1939 census, was still in the Philippines, and the president prevailed on him to organize the new bureau. As a result, Mr. Hurley founded an unpretentious organization which could operate on a modest appro 'Photo by Mayflower Studio) Two representatives of the International Business Machine checking the quality of the cards at the census bureau. priation of about P150,000, and with a personnel of about 120 employes. This was possible only through the acquisition and use of the latest and most efficient labor-saving devices, such as the International Business Machines, capable of doing quicker and more accurately what had for merly required the services of hun dreds of clerks. In June, 1941, Mr. Hurley could no longer resist the urgent calls of his home office, the U. S. Census Office, and returned to America. His suc cessor was, and the present incum bent is, Dr. Leon Ma. Gonzales, Harvard graduate and formei’ Phil ippine Government Commercial Agent in New York City. The primary reasons for central izing the statistics work of the gov ernment were as follows: 1. To further simplify govern ment activities by removing duplication of effort, both in the interest of economy and to avoid the issuance of conflict ing information on the same subject by different offices of the Government. 2. To have a Central Statistics Bureau charged with collect ing, compiling, assembling, ta bulating. and publishing all 'Photo by Mayflower Studio) Numerical data is transcribed onto tabulating cards in the form of punched holes. In the picture Miss Carmen Rivera is operating one of the bureau's electric punching machines. government statistics of gen eral interest, for the use of the government and public. 3. T'o have a unified policy and system in the presentation of published statistics. 4. To have only one known office to which the general public can go for facts and figures they may need, and thus save them the trouble of having to go from one bureau to another for the desired information. 5. To establish an office to keep census records, and ever-ready to take periodic censuses upon order of the President or of Congress. The objectives of the Bureau are set forth in Section 2 of its Organic Act, and are briefly summarized as follows: 1. To collect, tabulate, and pub lish statistics and other infor mation concerning population, agriculture, livestock, com merce, industries, banking and finance, employment, wages, prices, stocks of commodities, labor, social, religious, educa tional and economic situations; 2. To prepare for, and undertake all censuses of population, agri(Continued on page 18) Q. The American Chamber of Commerce Journal April, 1947 National City Bank of New York Report to Shareholders at the One Hundred Thirty-Fifth Annual Meeting JANUARY 14, 1947 The past year was one of the busiest this Bank has known. Al most every operation whether in currency, checks, loans, foreign credits or bond transactions made new records. Thus the Bank re flected the country’s highest peace time income and production—a great burst of activity instead of the slump and unemployment many had expected to accompany demobiliza tion. It was renewed evidence of the power of private enterprise when it is given, release. But in it also may be seen the forces of in flation nourished by the vast war time expansion in the volume of money. Happily the record of the year includes certain, stabilizing influen ces. Some of the abnormally ex panded money supply has been cut down by the action of the Treasury in using the excess proceeds of the Victory Loan of December 1945, on deposit with banks, to redeem its maturing obligations. This action reflects itself in lower government deposits and government security holdings in our own as well as other banks. It is a step in the right direction, though the inflationary potential is still strong. THE EARNINGS OF THE BANK AND THE TRUST COMPANY The combined net current operat ing earnings of the National City Bank and the City Bank Farmers Trust Company for the year were $18,801,025 or $3.03 per share on the 6,200,000 shares outstanding, an. increase from $17,592,420 or $2.84 per share for 1945. Adding net profits from sales of securities (af ter taxes), the total was $22,788,344 or $3.67 per share compared with $25,525,953 or $4.12 per share in, 1945. These earnings do not in clude recoveries which were transfer red to reserves. fer, Undivided Profits are $29,534,614, an increase of $240,376 from a year ago. The Trust Company has Capital of $10,000,00’0, Surplus of $10,000,000 and Undivided Profits of $8,097,020. Tihe two institutions thus show total capital funds, that is, Capital, Surplus and Undivided Profits, of $287,631,634 or $46.39 per share compared with $44.60 per share at the end of 1945. The assets of the Bank are valued conservatively, and in the published statement Unallocated Reserves are deducted in arriving at the figures shown. Such reserves serve to provide a means of absorbing losses which may develop through the as sumption of risks .inherent in, the conduct of the banking business,Also certain assets are carried (Continued on page 20) Condensed Statements of Condition as of December 31, 1946 THE NATIONAL CITY BANK OF NEW YORK Including Domestic and Foreign Branches ASSETS Cash and Due From Banks and Bankers........................................ $1,296,000,976.30 United States Government Obliga tions (Direct or Fully Guaran teed) ............................................ 2,188,205,130.00 Obligations of Other Federal Agencies 35,353,712.29 State and Municipal Securities .... 186,734,855.52 Other Securities ................................ 101,029,479.03 Loans, Discounts, and Bankers’ Acceptances ................................ 1,093,944,555.06 Real Estate Loans and Securities .. 3,346,134.21 Customers’ Liability for Acceptances 12,759,386.53 Stock in Federal Reserve Bank .... 6,900,000.00 Ownership of International Bank• ing Corporation ........................ 7,000,000.00 Bank Premises .................................. 29,280,430.52 Items in Transit with Branches ... 15,021,204.88 Other Assets ...................................... 2,159,802.74 Total ............................ $4,977,735,667.08 LIABILITIES Deposits ............................................. $4,664,102,604.42 (Includes U. W. War Loan De posit $98,257,569.44) Liability on Acceptances and Bills...................... $15,975,381.92 Less: Own Ac ceptances i n Portfolio 2,193,999.08 13,781,382.84 DIVIDENDS, CAPITAL FUNDS, AND RESERVES Dividends totaling $9,920,000 or $1.60 a share have been declared by the Bank and the Trust Company for the year, the same rate as for the second half of 1945. The Trust Company paicl $620,000 of this amount. At the year-end, Capital of the Bank remains at $77,500,000. Sur plus has increased to $152,500,000 by the transfer of $10,000,000 from Undivided Profits. After this trans Reserves For: Unearned Discount and Other Unearned Income ...................... Interest, Taxes, Other Accrued Expenses, etc................................ Dividend ......................................... Capital .......... Surplus................ Undivided Profits Total $ 77,500,000.00. 152,500,000.00 29,534,614.21 4,147,064.01 31,520,001. 4,650,000. 259,534,614.21 $4,977,735,667.08 Figures of Foreign Branches are included as of December 23, 1946, ex cept those of the Dairen Branch which are prior to the outbreak of the War, but less reserves. $376,317,672.00 of United States Government Ofligations and $1,712,448.73 of other assets are deposited to secure $318,115,058.42 of Public and Trust Deposit and for other purposes required or permitted by law. _'he American Chamber of Commerce Journal April, 1947 9 Economic State of the Nation A Statistical Report By DR. LEON MA. GONZALES Director, Bztreau of the Census and Statistics ANOTHER YEAR comes to an end, and one more milestone has been reached in the long road back to normalcy. From this vantage point, the horizon becomes clearer and the goal posts no longei’ seem so dis tant and dim. The road back to peace is a hard road, but enough .headway has been made just the s^aie. The nation has made enough progress to warrant a little optimism. The tempo is varied^ In some fields of endeavor, only the minimum advance has been made against stupendous difficulties; in some the spurt has been beyond or dinary expectations. But over all, the general pattern is the same. Progress is the main, motif, in vary ing designs. Indeed, we have done well enough, considering the cir cumstances. “to rebuild, repair, and replace.” The advance in our rehabilitation work is clearly reflected in the in creased well-being of our people. While undoubtedly a lot still leaves to be desired, conditions in the pub lic welfare have improved very con siderably. The backwash of war has still left a lot of people in mi sery and want, but under present conditions, w6 have done more than well enough. Compared to the warhavaged nationals of Europe, we are enjoying more and suffering less and less. Of great significance to each and all because of its immediacy to our lives, is the progress made in the “war against inflation.” As the year draws to a close the over-all index settled down to one of the lo west records made so far since li beration. From 637.3 when the year began, the index dropped down to 446.9 — a gain of almost 200 points. Compared to the 100 points in 1941, there are still 346.9 points to go. But if the rate of progress is maintained, in approximately one year and nine months the cost of living shall 'have returned to nor mal. Barring accidents, however, the cost of living is expected to nor malize faster than the estimate due to the production of more food stuffs and the import of essential commodities. Commerce, our main prop in the past, is still the backbone of our economy. As such, it has shown the greatest activity. The total vaDr. Leon Ma. Gonzales lue of foreign trade last year was the highest., on record, reaching the unprecedented total of over P724 million, and surpassing the prewar all time high in 1929 by al most P101 million, or 16.19 per cent. As compared with 1941, last year’s foreign commerce registered an in crease of 22.01 per cent. Of the total foreign trade, how ever, our imports took a lion’s share. Total imports of last year reached P602.5 million, also highest of all time. That trade is actually P331.3 million pesos more than the 1941 figure. The ten principal im ports in the order of their value were: cotton, grains, tobacco, rayon and other synthetic textiles, dairy products, paper, beverages, chemi cals, and toilet articles. For the period under review, our export trade of last year represent ed a decrease of almost P194.6 mil lion from the 1941 figure. As a matter of fact, it was the lowest in thirty years. The sharp decline has been attributed to the fact that some of the principal heavy export items are not as yet available. Ac cording to their relative importance, the following were our principal ex ports: copra, abaca, coconut, toilet articles, shells, fruits, buntal fiber, and rattan furniture. In the field of local business, the very significant fact stands out: post liberation investment is greater than, prewar. Corollarily, Filipinos occupy the dominant position in the field. The records are clear. For the year 1946, a total of 808 corpora tions with a paid-up capital of over P21 million and 469 partnerships with a paid-up capital of P25 mil lion was registered. These figures do not include the 372 cooperative associations operating with a total paid-up capital of almost Pl million. As a consequence of this business flurry, the average monthly invest ment during 1946 registered an in crease of almost 322 per cent over the prewar figure. Of the stock corporations almost three-fourths of the number is Fi lipino-controlled, with the Chinese and Americans coming a poor sec ond and third,, respectively. The Chinese, however, occupy the pre miere place in partnership with the Filipinos coming in a close second. While the strides made in agricul ture have not equalled those made in commerce, yet they are nevertheless firm and strong. We are as yet planting less crops than we used to; but even at that we have every reason to feel glad that we have put to cultivation more acreage than or dinarily we should, what with the high cost of living, profitable jobs in Army fields, and the discontent in the ricelands. For the first half of last year, we have planted only a little over a million and a half hec tares of rice. This is only about four-fifths of our prewar average. The total yield for the same period of 37 million cavans is 14 million short of what we should ordinarily produce to reach prewar level. In the corn industry, the picture is even less bright, though not too discouraging. Our total yield for the first half was less than 6 mil lion cavans, m'aking us about 40 per cent short. Our livestock and poultry situa tion, however, is rather dismal. We had only one carabao last year where we had two before the war. The same is true with cattle, horses, hogs, goats, and sheep, as well as ducks, geese, and turkeys. We have only one chicken now were we used to have three. The gradual restoration of peace to our countrysides, the steppingup of our agriculture endeavors, as well las the return of displaced per sonnel are expected to bring about 10 The Americ Chamber of Commerce Journal April. 1947 better agricultural conditions when this year ends. As in agriculture, our industries still need a lot of rehabilitating. The bright note, however, is the progress made in building construc tion. An impressive total of build ing permits has been issued by the city authorities. During the plast year P48 million worth of buildings were constructed or repaired. Com pared with the P12 million in 1945, the stride was tremendous. Rehabilitation of the cigar and cigarette industry has been going on at a painstakingly slow pace. Most of the factories destroyed have not as yet been repaired. The few remaining ones operating have been laboring under many serious handi caps. This has been very patent in the decrease of almost 85 per cent in the average monthly production. In the distillery industry, the painful fact stares us in the face that the one-year output hardly equals the average monthly produc tion in 1941. This is particularly true in the production of denatured alcohol, which before the war and even during the Jap occupation, was largely used as gasoline substitute. A new industry has arisen in the manufacture of compound liquors which shows some promise. The textile industry in the Phil ippines is reckoned only with the National Development Company, our main textile producer. Its total output for the year was only about a fourth for a similar period before the war. What is true with the textile in dustry is also true with our cement production. Production of “Apo” cement by the government plant was only about 30 per cent of prewar output. Production of the “HiSilk” variety, which made up a good percentage of the output before the war, has also been discontinued. The manufacture of shoes is in far worse condition. Competition has so limited shoe manufacturing by the National Footwear Corpora tion that the statistics record a piti ful output of only 506 pairs of shoes in June of last year. Until the road expansion program gets underway, our road situation continues to be more or less the same as in 1941, although a few hundred kilometers have been added since. ■ Railway operations are much be low normal, due to destruction of parts of lines as well as of locomo tives and cars which have not been replaced up to the present. In happy contrast, however, the Filipinos have become air-minded. The FEATI and PAL, as well as the recently-organized CALI, are boost ing air travel as never before. For the first nine months, the different airlines carried over 291,000 passen gers and almost 25 million pounds of freight. Contrast that with the 11,000 passengers and 72,000 pounds of freight for the entire year of 1941, and you have a fair estimate of the stride made by the aviation industry in this country since libera tion. The monetary circulation in the country has been declining steadily, reflecting a palpable deflation. Starting with almost a billion pe sos in January of last year, the cir' culation fell off to less than P732 million in twelve months. The de crease was about 25 per cent. Just the same, present circulation is still far too big for a country struggling from the ruins. The total monetary circulation at brdak of war was only P256 million, about a third' of what it is today. The government reserve totals P673 million in December, in spite of the heavy imports. The presence of U. S. Army is largely respon sible for our reserve fund. The re serve has more than offset oUr lack of export commodities. Our total public debt at the end of June last year w'as P133 million, (Continued on page 17) INTERNATIONAL Trucks “Proved Performance in War and Peace” Now, powered by the war-tested and proved Har vester-built Blue Diamond engine, this thoroughly modern INTERNATIONAL embodies the best me chanical features which engineering skill and more than thirty years of heavy-duty truck-building ex perience can produce. Write or call on us for Particzdars Sole Importers SORIANO TRADING CO. M. R. S. Bldg. Tel. 2-79-61 INTERNATIONAL HARVESTER COMPANY OF PHILIPPINES 154 MARQUES DE COMILLAS, MANILA The American Chamber of Commerce Journal April, 1947 11 e Stock On the resumption, of business following the year-end holidays, prices moved forward agressively out of the trading range established during the second half of December. The advance was accompanied by a large expansion, in the volume of transactions. As measured by our share average, prices had improved about twenty percent by January 13^ A period of consolidation with minor price fluctuations ensued. During this time, the market had two unsuccessful attempts to move into new high ground, and finally made it on February 19, when there was a scramble to buy stocks follow ing President R'oxas’ announcement of the previous day that Philippine Gold Mining Companies would be free to sell their gold in the world market. On February 20 our share average closed at 43.65, a new high for the present bull movement which had its inception on Septem ber 26 when our index registered 25.55. It is interesting to compare prices of the leading issues. In our comparative table found elsewhere in this issue, we show September 26 prices, also the range during the period January to February 20, 1947. A number of issues have made substantial advances. From a percentage standpoint, Surigao Consolidated shows the widest gain. The rise on this stock reflects re commencement of milling and the longer term outlook. The mill is at present handling hbout 150 tons daily, and by April should reach 450 tons daily. Surigao will soon be followed in the ranks of producers by Atok/ Big Wedge which is scheduled to re commence operations around March 45 1st. Later in the year Mindanao Mother Lode and Benguet Conso lidated will get into production, and ( should be followed soon after by42'5 Lepanto Consolidated. As regards the chrome companies, Consolidated Mines is in active pro duction. and. Acoje should be pro ducing before the end of the year. The Presidential announcement is a most constructive development for j_ the mining industry, as the benefit 37 2 of the open market gold price will assist companies to offset whiat might otherwise have been onerous cost increases. Strength has not been- confined to mining shares. All sections of the list have participated in the demand Antamok Goldfields Atok Gold Mining Co. (x) Baguio Gold Mining Co. Batong Buhay Gold Mines Big Wedge Mining Co. Consolidated Mines IXL Mining Company Lepanto Consolidated Masbate Consolidated Mindanao Mother Lode San Mauricio Mining Co. Surigao Consolidated Acoje Mining Company Balatoc Mining Co. Benguet Consolidated Coco Grove, Inc. Itogon Mining Co. Suyoc Consolidated United Paracale 15 22_ 2 23 40 35 ar ke t JANUARY 2 TO FEBRUARY 20, 1947 By A. C. HALL AND CO. for equities. The leading Sugar Shares show substantial apprecia tion; Bais at P610 are up P85, Carlotas at Pl 15 up P13, and Tarlac at P95 up Pl5, were principally in de mand. In the Commercial and Industrial Section, San Miguel Brewery shares continued their sensational advance closing at P501 sales from P360 bid. Philippine Racing Club advanced from Pl.04 -to Pl.20 on publication of a satisfactory 1946 report. Elsewhere in the list, BSank of the Philippine Islands were traded up to P70 up P12, while Filipinas and Philippine Guaranty changed hands at P17 and P19. JANUARY p RICE RANGE Sept. 26 Jan. 2 Feb. 20, 1947 1946 1947 High Low Closing P .045 P .05 P .065 P .05 P .05 I .63 1.03 1.42 1.14 1.40 .08 .085 .12 .10 .10 .006 .0072 .011 .007 .011 .76 1.14 1.44 1.14 1.40 .0085 .015 .018 .015 .015 .125 .095 .12-34 .095 •12-3/1. .17 .40 .51 .40 .46 .08 .075 .10 .075 .0875 .48 .65 .85 .65 .85 .37 .28 .36 .28 .32 .355 .335 .53 .335 .53 O V ER THE COUNT E R P .17 P .25 P .31 P .25 P .30 nom 3.55 3.80 3.40 3.80 3.50 3.90 4.00 3.50 3.90 .03 .034 .058 .034 .045 .105 .12 .145 .11 .12 .055 .05 .065 .05 .065 .105 .135 .155 .11 .125 FEBRUARY 6 7 28 3 10 4 7 2 5 24 31 6 1 □ 7 14 15 I 8 I A. C. HALL & CO. MIN I II i I I I I I I I I I I I I I I t-tNG SHARE AVERAGE 12 The American Chamber of Commerce Journal April, 1947 Capitalistic Exploitation .... (Continued from page 5) tined, as an independent Republic, to continue to march side by side with her great mother country along the higway of progress. The closer the relationship between the daughter and mother republic will continue to be, the better it will be for them both. They complement each other on opposite sides of the broad Paci fic, in ideology, in political policy, in industry, and in trade. Hen<<e is the parity proposal so nature and so necessary. It establi shes Nothing new, but continues, in the respects provided for, the old re lationship despite the separation ofsovereignties. Committed as is the Philippines to cabalistic democracy, the people can n.;ot but welcome capital invest ment here, a vital part of the capita listic process, without which nothing new could be done and even the al ready established could not be main tained. President Roxas and various high officials of the administration, have spoken eloquently on the subject of parity. The parity provision was called for by the American Congress for two main reasons. The first is based on the fact that Americans who had property in the Philippines which was destroyed during the war, are required to re-invest here the da mage payments which will be paid them by the American Government; it would be manifestly unfair to im pose this requirement if the condi tions under which they origin ally made their investments were changed. The second and more im portant is that Congress wanted to encourage in this manner the invest ment of new capital which the count ry so badly needs after the war’s destruction. The attitude of the Roxas adminis tration with respect to foreign and especially American investment, dif fers in no way from that of previous administrations. President Quezon, for .instance, said in 1938: “We can not, we must not, adopt a policy that in any way may be in terpreted as antagonistic to foreign ers. We do not underestimate what they are doing and can do in aid of our material progress. The attrac tion foreign capital has been one of ir r main concerns.’’ In spite of the fact that the Amer icans had equal rights with the Fi lipinos before independence, total American investments in the Philip pines at the time of the outbreak of the war amounted to only around P537,000,000 of which around P200,000,00Q. represented investments in sugar, coconut, and abaca planta tions, mining and lumber operations, and public utility enterprises. For comparison, it may be stated that total Chinese investment were esti mated at around P200,000,000, Ja panese investments at P100,000,000, Spanish at P70,000,000, and other foreign investments at P180,000,000. Only a little more than half of the total foreign investments were Amer ican in spite of the advantage the Americans enjoyed over others. American investments in Cuba, Chile, and Argentina were all some what larger than the American in vestment in the Philippines, and the total American investment in IT WEARS LONGER THAN PRE-WAR TIRES! * Stronger, Safer, Economical * See this new tire today FI^^T IN^RUBBER^^ South and Central America reach ed nearly four billion dollars. Cana da and New Foundland alone, how ever, had nearly three and a half billion. American investments in Eu rope totalled less than one and a third billion dollars. American in vestments in all of Asia, Africa, and Australia amounted to only $913,000,000. These figures seem large when viewed by themselves, but they al most disappear when the total American investment in the United States itself is considered. And the figures of America’s foreign invesr(Continued on next page) The American Chamber of Commerce Journal April, 1947 13 ment may be compared, too, to the figure of four hundred fifty billion dollars which is the estimated cost of the last World War to the United States. It is obvious that American cap ital never flowed to the Philippines in large volume and it is likely that it never will, regardless of any spe cial inducements, although it is to be ardently hoped that the Philippines will attract more American capital from now on. During nearly the whole of the period of American so-yereignty over the Philippines, the continuing political uncertainty, or what financiers chose to consider as such, discouraged long-term invest ment. Under the parity provision, there will be a period of over two de cades which case be more definitely counted upon.. It will be recalled that the Commonwealth period was to last, and did last, despite the war, only one decade, — ten years. It can not be denied that there has been capitalistic exploitation, in the worst sense at certain times, mostly in the past, in various parts of the world, especially in South America, Africa, and sections of Asia, as well as in Europe itself. Various nations were notoriously concerned in this exploitation (Belgium in the Congo, for example), but never America. American, capitalism developed in what was called the New World among free- and democraticallyminded men. Even the Negro slave ry which sprang up there and flouri shed for a time- was not the wholly inhuman system which it was in some countries. More has been achieved in America in reducing, if not entirely eliminating, poverty than in any other great country, and immense wealth has been amassed without, in the main, a grinding down of labor. The concept of con sumers’ purchasing power has been held well in mind by American ca pitalists and entrepreneurs in their mass production programs. The workers are also the chief consumers and must earn enough in wages to buy the product of each other’s labor, or the whole economic machine is brought to an inevitable stop. Under American inventive and technologi cal genius, most toil has been trans ferred to the inanimate and tireless machine, vastly more efficient than the human and animal labor which the economic systems of the past had to draw on. Oil has taken the place of sweat. The modern worker has become a machine-tender, gen erally well paid for his working time, which has been so considerably re duced that many hours are left for leisure pursuits. The bias of American capitalism is decidedly humanitarian. The eco nomic machinery is perfectly under stood to exist primarily for the sa tisfaction of human wants. And ap peal is made not only to wants, needs, but to the most refined taste in the production and sale of thousands of articles of every day use, for every body, rich and poor, or rather, the not-so-rich. The people of other countries have no idea of the general abundance and luxury of American life. They must see ft to believe it. This humanitarian bias, the Amer ican capitalists and entrepreneurs carry with them wherever they go. In the Philippines, American busi ness stands high in public estima tion. Most workers would rather work for American than for other foreign or even Filipino employers because the plain fact is that they are better paid and better treated by the Americans. American investments have done much to break up the old feudal con ditions which however are still mak ing much trouble. Practically speak ing, only more of the American-style modern enterprise can break up this old system of oppression. Such “ex ploitation” as there has been in the Philippines during the past half century was this, and not American. American capital and business en terprise, limited as it has been, has done as much or more in the eco nomic sphere to bring the country forward, as American government officials have done in the govern mental and political spheres, though it has received much less praise. Business prosperity and good gov ernment are, as things are, in separably connected. Government activity is based primarily on taxa tion, and if there is little to tax, there are no government revenues. In thinking of capital investment and the exploitation of natural re sources, the Filipinos must think of utilization rather than neglect and waste; of contribution rather than relinquishment; of employment and activity rather than idleness and stagnation; of enjoyment rather than abstinence; of gain rather than loss; of creativity rather than a sus picious, but limp and indolent desue tude. That they will, is the confident ex pectation of this writer. AN OPPORTUNITY FOR EX-INTERNEES EX-PRISONERS QF WAR AND THEIR FAMILIES TO GjVE PRACTICAL EXPRES SIONS of their un dying GRATITUDE FOR HELP GIV^N THEM IN THEIR TIME OF GREATEST NEED. Join the ESCODA MEMORIAL FUND ESCODA MEMORIAL FUND Mail Checks direct to E. B. Ford c/o Philippine Trust Co., Manila The American Chamber of Commerce Journi April. 194 14 With PARITY... What? What is bound to happen? No doubt you, too, can foresee a tidal wave of activity in every conceivable venture — in finance... in indus try ... in agriculture... in trans portation ... in construction... in distribution. Every business will be swept into this impending motion with tremendous speed and accelerat ing momentum! Conversion of present business methods to faster and more efficient techniques becomes necessary. It be comes imperative m a constant mar ket! Manufacturer’s prestige and pro duct brands will continue to be do minant factors in merchandising ef forts. . . class and mass markets will be as distinct as ever. . . but adver tising will continue to be a growing science and art. . Reynoso’s staff is alert to the first sign of a new trend and quick and ready to apply methods that will equal the situation. • NEWSPAPER ADVERTISING • OUTDOOR ADVERTISING • RADIO ADVERTISING • ELECTRICAL ADVERTISING • DIRECT MAIL ADVERTISING Reynoso Advertising Corporation Operated by EMILIO REYNOSO & SONS, INC. — Established 1907 3rd Floor Chaco Bldg., Manila Tel. 2-80-49 The American Chamber of Commerce Journal April, 1947 15 BUREAU OF THE CENSUS AND STATISTICS Manila ESTIMATED NATIONAL INCOME OF THE PHILIPPINES: 1939 and 1946 (National Income, as used in this survey, refers to the annual value of goods and services produced by the inhabitants of a country.) Grand Total — A. Production of Goods: 1. Agriculture-crops & livestock 2. Forest products .................. 3. Fishing (licensed) .............. 4. Minerals ................................ 5. Manufactures ........................ 6. Sundry: (f) Handicrafs.......................... Fishing (unlicensed) .... Unprovided for ................ B. Services: 1. Salaries & Wages in gov ernment .............................. 2. Salaries and wages outside government ........................ 3. Professions and other services .............................. 4. Public Utilities: (k) Electricity .......................... Transportation (land and water) ............................ Air transportation............ Telephone (12% of capital) Cable and radio com munications .................... 5. Distribution (com’l establish ments) ..........................n . . 6. Sundry:. Housing ............................ Banks reserves, surplus and undivided profits .. Insurance claims paid or collected ............................ Mutual bldg, and loan ass’ns (Reserves, un divided and unearned profits) .......................... Educational institutions . . Hospitals............................ International balance of payments........................ Others .................................. (x) Figures not yet available from the Bureau of Treasury. Note: For the year 1939, figures of the 1939 Economic Census were used as much as possible. They are data as of January 1, 1939. For Agricul ture, 30% of the gross income was deducted to represent miscella neous expenses. For Forest Pro ducts, Minerals, Manufactures, there were deducted from the total value of the output, the expenses for salaries and wages and for fuel oi' electricity consumed. For Fishing (licensed) the deductions for sala 1939 Pl,802,156,000 1946 P3,346,935,000 P 282,775,000 Pl,204,733,000 (a) 30,222,000 30,454,000 (b) 15,817,000 61,881,000 (c) 47,632,000 5,250,000 (d) 167,175,000 132,335,000 (e) 2,000,000 4,000,000 2,500,000 5,000,000 5,000,000. 5,000,000 45,250,000 68,489,000 (h) 357,548,000 679,854,000 (i) 23,847,000 47,694,000 (j) 5,290,000 2,645,000 38,150,000 50,000,000 — 4,000,000 1,000,000 — 1,500,000 — 672,343,000 • 1,103,239,000(1) 5,000,000 25,000,000 (m) 25,712,000 18,537,000 (n) 4,980,000 (x) 1,890,000 2,000,000 1,500,000 (o) 1,000,000 1,000,000 (p) 58,525,000 108,676,000 (q) 5,000,000 5,000,000 (r) ries, wages and other expenses were based on 25% of the annual value of the catch. For Manufactures, cost of raw materials was also deducted to avoid duplication. The Census of 1939 did not take any figures on unlicensed handicraft enterprises and unlicensed fishing. The esti mated figures on these items were based on figures on licensed enter prises. As regards Service, also 1939 Census figures were used, except where no census data are available, such as telephone, cable and radio communication, air transportation, house rentals, banks’ profits, etc., insurance paid, educational institu tions, profits of mutual building and loan associations, hospitals, credit balances in international payments, etc. Estimated1 had to be made for these items. With respect to Distri bution represented by Commercial Establishments, gross receipt were used from which were deducted salaries and wages and an additional 10% for other expenses. The 1946 estimates have taken into account the rise in values of from three to five times those of prewar, and the destruction of fac tories, etc. that have resulted in much reduced output. In estimating 1946 figures, (a) was based on data from the Bureau of Plant Industry and Bureau of Animal Industry; (b) on data from the Bureau of Forestry: (c) on data from the Division of Fisheries; Department of Agricul ture and Commerce; (d) on figures on cement and coal production ob tained from the National Develop ment Company. From said figures were deducted estimated expenses for labor, etc. The estimates for (e) were arrived at by excluding from the 1939 figures the output of industries reported to have been wiped out, and the balance thereof was halved to determine estimated reduction of the output of the in dustries due to the war. The re maining half was multiplied by three (3) to represent the rise of factory prices during postwar. For (f) the 1939 figures for handicrafts was just multiplied by two (2) to indi cate rise in values in provinces where such things are produced; the figure for unlicensed fishing like wise doubled the 1939 data; and the figure for "unprovided for” just re peated the 1939 figure to take care of increased values and also of the disorganized state of many occupa tions in 1946, compared with prewar. For "Services” during 1946, (h) represents figures of the General Auditing Office; (i) salaries of estimated number of laborers to in dicate increased professional fees. For (k) during 1946, electricity was reduced by one-half due to extensive destruction of electric plants and also of buildings and residences dur ing the war; transportation (land and water) was hiked to P50,000,000 to give allowance to the transporta tion boom and higih fares charged just after liberation; air transporta tion is credited with a mere P4,000,000 following unofficial reports that one air transportation company alone is making a gross receipt of The American Chamber of Commerce Journal April, 1947 16 P50,000 daily or about 12 per cent; telephone and cable and radio com munications have no figures as they may not be making money this time. Distribution, (1), was estimated by taking the total foreign trade of 1938 and total foreign trade in 1946 as basis, together with the gross re ceipts of commercial establishments in 1938. Housing (m), was just hiked five times to indicate, average rise in house rental; (n) is Bureau of Banking figures; (0) and (p) are estimated net earnings of educa tional institutions and hospitals; (q) has been estimated as per attached statement; and (r) is an estimate to cover unknown sources of income in the Philippines. Economic State . . . (Continued from page 11) for which a sinking fund of P63 million had been provided. With an estimated population of 18 mil lion, the per capita debt of every man, woman, and child in this coun try amounts to P3.85. We have averaged a yearly decrease in pub lic debt of over P4 million. There are altogether 11 commer cial banks operating in Manila with a total combined resources of P848 million pesos. This represents an increase of over 300 per cent in less than 12 months. In sharp contrast, the combined resources of the banks before the war amounted only to P353 million, or only about 42 per cent of the present amount. Similarly, bank deposits register ed a mark very much higher than the prewar. All told, the deposits last year passed the half billion mark, while the bank deposits in 1941 did not even reach P200 mil lion. Twenty-three months after libera tion, the U.S. Army is still the big gest employer of labor in the Philip pines. The peak of Filipino civilian payroll strength was reached in November, 1945, with 230,000 em ployed. This figure receded gradual ly as units of American forces were either withdrawn or assigned to other areas. The decrease is clearly indicated in the figures for one month. In October, 1945, 200,000 Filipino la UNION PLUMBING COMPANY — PLUMBING CONTRACTORS — Installations—Repairs—Supplies Office: 1883-B Azcarraga (Near Old Bilibid Gate) “Our staff of Experienced Plumbers are at your disposal to give you the best Plumbing Service” borers were employed by the U.S. Army. One year later to the month, hardly 90,000 were still in the em ploy, a reduction of over 55 per cent. There is no glossing over the fact that the unemployment problem in the country is not only great but acute as well. The President was fully conscious of this when, on his election, he urged the people to join hands with him in the war against the twin specters of inflation and unemployment. In addition to those who are grad ually crossed out of Army payrolls, there are an estimated 400,000 guerrillas in Manila and the prov inces who have not been inducted into the Army and 'are thus consi dered displaced persons. Also, the paring down of' Philippine Army personnel to peacetime strength will add about 100,000 more unemploy ed. (Continued on page 18) The American Chamber of Commerce Jonrn April, 1947 17 There are no available data as to the exact number of persons out of work in Greater Manila area, but it is conservatively estimated at 145,000. The acuteness of the situation is indicated clearly by the fact that over 70,000 job seekers were actual ly found in Manila alone by the De partment of Labor from August 20 to December 31, 1946. These are the men and women who roam the city Streets and storm the gates of big firms looking for jobs. No doubt, they contribute in a large measure to the criminality in the ^city. Wage rates in private enterprises in Manila have not gone up in pro portion to the rise in the cost of es sential commodities. This is the jnain reason why there was unrest among industrial workers during the latter part of 1945. Early in 1946, agitation by labor unions for increase in wages resulted in pro gressive rise of wage rates in indus try and trade. By the latter part of 1946, skilled laborers received wages nearly three times the prewar rates, while the wages of unskilled labor ers have increased almost four times. Reduced to terms of real wages (that is, wages in terms of goods and services they can buy), present wages are slightly over half of the wages paid before the war. Unskill ed labor, whose wage before the war average Pl.24 a day and now P4.53 is actually receiving only about 80 centavos in real wages. Actually, a laborer in 1946 spent more for food than in any year be fore the war. The only possible ex planation for the rather high expen diture is the low food purchasing power of the peso, due in turn to the high retail prices of prime com modities. As m!ay be expected the Filipino wage-earner spends propor tionately more for food than his American counterpart, confirming in reverse Engel’s law: “The larger the income of a family, the smaller is the percentage of it expended for food.” To the peasant class, the past year wlas significant for the passage of the Tenancy Law which provides, among other things, for the division of the produce on 70-30 basis in fa vor of the tenant, if the tenant de frayed all the expenses of cultiva tion. The Administration has also formed the Agrarian Commission, which is continuing its surveys to help solve the chaotic conditions in agrarian areas. THAT, in brief, is the state of the nation. Undoubtedly, it is far from recovered, but the signposts along the highway are clear and unmis takable. There seems to be no doubt that this year the nation will even make greater strides towards reconstruc tion. The War Damage Commis sion is being geared up for maxi mum speed. The government is committed to embark upon a largescale development program. The creation of the Rehabilitation Fi nance Corporation, capitalized part ly from the proceeds of some P200 million worth of surplus property inherited from the U.S. Army, will most certainly step up the rehabili tation of our industries. The Ship ping Commission, created to help restore the interisland trade to its prewar status, has started activities with the distribution of 44 FS ves sels. Several new taxation laws hlave been passed calculated to in crease substantially government re venues so urgently needed to balance the budget. . The Cebu Portland Ce ment Company is also earmarked for expansion. Fresh impetus is being given to our fishing industry. Only recently, the Agricultural Ma chinery and Other Equipment Cor poration for the manufacture of farming equipment suitable for lo cal use, has been inaugurated. A commission to study the rebuilding and building of roads and bridges is already here to map out the mas terplan of work. On their initia tion, the people will have much use for the rehabilitation windfall com ing their way as well as the vete rans’ benefit payments. Indeed, the year 1947 promises to be a year of greater activity and progress. What has been done up to the present has been in the na 'Photo by Mayflower Studio) In the foreground Mr. Lconeio Gonzalo, chief of the tabulating section, is operat ing a Type !t05 IBM Electric Accounting Machine. Behind him is an electric sorting machine and other modern equipment used by the bureau in its work. ture of preliminary groundwork, left largely to private enterprise. When the various rehabilitation agencies start going on all cylinders, then verily can we say with the Pre sident that we have started to “move forward without pause to bind up this nation’s wounds, to toil, to make, and to build.” Bureau of tlie Census . . . (Continued from page 8) culture, industry and com merce; 3. To conduct, for statistical pur poses, investigations and studies of social and economic problems and conditions. 4. To carry out and administer the provisions of Act No. 3753, governing Civil Registry; 5. To make and publish, from time to time, estimates of po pulation, agricultural produc tion, national income and num ber of livestock; 6. To compile, classify, and pub lish statistical information for the use of the government and the public. To carry out the foregoing objec tives the Bureau, since the begin ning has had five technical divisions; namely, the Division of Vital Statis tics and Civil Registry; the Div ision of Agricultural Statistics, the Division of Labor Statistics, the Div ision of Business Statistics; and the Divison of Customs Statistics. When, after the war, Dr. Gonzales resumed his position as Director of the Bureau, he found an office seriously undermanned, almost completely shorn of equipment, and housed in dark, dingy, cramped quarters. The bureau’s prewar The American Chamber of Commerce Journal April, 1847 18 equipment, with its. impressive array of steel cabinet files, calculating machines, adding machines, type writers, etc., etc., had been complete ly wiped out by the war. Gone also were some of the price less records of the government, such as the documents of the national civil registry, customs statistics’ entry cards dating back to Spanish times, demographic statistics also dating back to Spanish times, the 1939 census returns, statistical books and records on agriculture and in dustry, business and labor statistics, and a really tremendous collection of pamphlets, magazines, yearbooks sent to the bureau by foreign governments and publishers. Hundreds of reserve copies of the Yearbook of Philippine Statistics (1940), Handbook of Philippine Statistics (1941), Abs tracts of Philippine Statistics, to gether with thousands of pamphlets on population, agriculture, etc. were all consumed by fire during the last battle of Manila. Naturally, under such handicaps as indicated by the losses enume rated above, it was impossible for the bureau to operate at its prewar level of efficiency. With two to four employes occupying one table be cause of inadequate space and lack of furniture, with only four or five calculating machines to work with as compared with almost forty before the war, the output of tabulated or printed statistics was necessarily far below the prewar output. The accomplishments of the bureau have therefore been limited to those activities considered most urgent. The ground floor of the Wat son Building, where it is now lo cated, was repaired and painted. The war damage survey, started about the middle of 1945, has been com pleted. A revision of the Yearbook of Philippine Statistics has brought available data up to date. By con ducting an economic survey, ma terial was secured for the Hand book of Philippine Statistics. The 1,000 and more local civil registrars have been surveyed to ascertain what portions of their records are still intact. General statistics on de mography, labor, agriculture, for eign commerce, business activities, etc. have been collected, compiled, assembled and tabulated. And hun dreds and thousands of census sche dules, forms and other printed mat ter needed for a new national cen sus (authorized by Republic Act 36) have been printed. Mention should also be made of the services the bureau has rendered to the UNO, UNRRA, UNESCO, Reparations Commission, in Tokyo and the Department of Foreign Af fairs. All of these entities have needed facts and figures on the po pulation, economic resources and activities, social conditions, etc. of the Philippines. To the fullest ex tent possible, these n,eeds have been met by the small but hardworking force of researchers, compilers and computers of the Bureau of Census and Statistics. The major project confronting the bureau at the present time is the tak(Continued on page 23) (Photo by Mayflower Studio) Front vieiv of one of the electric a.C' counting machines recently installed by the bureau of census and statistics. THE PERFECT NIXER OF UNEXCELLED QUALITY YOUR GUARANTY Now available in any quantity at any time. Bottled at the— ROYAL SOFT DRINKS PLANT Owned & Operated by SAN MIGUEL BREWERY The American Chamber of Commerce Journal April, 1947 19 Report to Shareholders . . . (Continued, from, page 9) the Bank’s books at figures under estimated liquidating values. The total of Unallocated Reserves and known excess values (exclusive of market appreciation on the bond ac count) is more than $40,000,000. EARNINGS OF THE BANK For the Bank alone, net current operating earnings were $17,573,826 compared with $16,393,098 in 1945. Adding net profits from sales of securities, the total amounted to ,$21,291,718 compared with $23,725,059. A summary , for the two years in the standardized form adopted in 1942 is shown in the following table: 1945 Change Current Operating Earnings 1946 Interest on Loans ........ Interest and Dividends on $15,882,767 $12,323,926 $+3,558,841 Securities (net after amortization) ............ 39,784,839 38,171,995 + 612,844 Other Current Operating Earnings (including net earnings of foreign branches) .................. 12,615,193 8,645,708 +3,969,485 $68,282,799 $60,141,629 $+8,141,170 Current Operating Expenses Interest Paid ................ $ 2,470,037 $ 1,999,140 $+ 470,897 Wages and Salaries .... Provision for Taxes and 18,370,129 14,664,289 +3,705,840 Assessments .............. Net Operating Cost of 15,065,851 14,884,452 + 181,399 Premises (including Real Estate Taxes and 3,710,520 + 713,586 Depreciation) ............ Other Current Operating 4,424,106 Expenses .................... 10,378,850 8,490,130 +1,888,720 $50,708,973 $43,748,531 $+6,960,442 Net Current Operating Earnings .................... $17,573,826 $16,393,098 $1-1,180,728 Increased interest received on loans is the result of a higher laverage of loans during the year, parti cularly in commercial loans and in the Personal Credit Department. In come on securities reflects a larger average investment than in 1945, though the December 31 investment wias $522,000,000 under that at the beginning of the year. The average yield on the investment portfolio was 1.40% in 1946 compared with 1.47% in 1945. The increase in other current operating earnings is mostly due to better foreign branch earn ings and increased income from com missions for services, such as hand ling commercial credits, collections, special checking accounts, etc. Wages and salaries, the largest expense item, increased $3,705,840 or 25% over 1945. The staff is larger due to heavy work volume, and we have made substantial wage and salary increases in recognition of higher living costs and individual abilities. Provision for taxes and assess ments as shown in the foregoing table consists of taxes on current income and the $2,691,000 Federal Deposit Insurance assessments. Certain other tax items are class ified under operating cost of pre mises, and there are in addition taxes on the profits from, sales of securities, and taxes at foreign branches. If all these were added together the totJal tax figure would be about $20,000,000. This is larger than the net current operating earn ings of the Bank. Other operating expenses, includ ing net operating cost of premises, have increased to take care of a larger volume of business, to make necessary alterations, and to replace or restore furniture and fixtures, machine equipment, stationery and supplies. DEPOSITS Reflecting government with drawals of deposits to pay off debt, total deposits at the year-end were $4,664,000,000 in. comparison with the total a year ago of $5,143_,000,000. If the decline of over $1,000,000,000 in U. S. War Loan Deposit is excluded, our deposits have in creased $557,000,000. Of this in crease, $368,000,000 is in domestic offices. At the year-end, there were over 885,000 deposit accounts of all types on our books here and abroad. For the fourth consecutive year Thrift deposits have increased, this year by $52,000,000 or 15%. The rate of increase of these deposits, very heavy early in the year, has lessened in recent months as goods have become available for purchase by individuals in greater abundance. Deposits in foreign branches grew $189,000,000 or 34%, principally in the Far Eastern branches reopened during the past two years. EMPLOYMENT OF FUNDS Holdings of U. S. Government securities are $584,000,000 less than a year 'ago; loans and discounts are down $140,000,000. The year-end bank statements of 1945 reflected, however, a large amount of loans to dealers, insurance companies, and others arising out of the December Victory Loan. At that time there also remained outstanding a con siderable volume of loans, many un der partial government guarantee, to finance war production. During the past year our loans in both of these categories have been almost completely liquidated. However, the increasing demand for funds from industry and trade has so largely off set this decline that the average volume of loans and the total income from loans were larger for the full year 1946 than for 1945. With the higher price level and the existing large volume of production and tirade, the demand for loans is con tinuing. Cash on Hand and Due from Banks has increased $194,000^000; most of the increase is in foreign branches. Of the holdings of obligations of the U. S. Government and Govern ment Agencies 30% mature within five years and 96% within ten years. If computed to earliest call date in stead of to maturity, 64% are due or callable within five years and all within ten years. The average maturity of this portfolio is 5 years and 6 months in comparison with 4 years and 6 months one year ago. This lengthening reflects the with drawal by the Treasury of over $1,000,000,000 of War Loan de posits mentioned above and the corresponding redemption at ma turity or the sale of that part of our short term Treasury Bills, Cer tificates, and Notes in which these funds were employed. The prac tical elimination of this large Trea sury deposit lessens the need for so large an amount of short term securities. The decline in the Bank Premises account during the year represents depreciation, charged against cur rent earnings. The International Banking Cor poration is carried on our books at The American Chamber of Commerce Journal April. 1947 20 a conservative valuation, of $7,000,000. The National City Safe Deposit Company, operating safe deposit facilities in our branches in Greater New York, is included in Other Securities at $700,000. The Bank was examined twice during the year by the National Bank Examiner and twice by the Direc tors’ Examining Committee, and the few items classified as losses have been written off or specifically re served against. CONSUMER SERVICES With our city-wide system of 66 branches and our consumer services, we consider that we are dealing with people rather than with dollars. We pioneered in welcoming thrift accounts more than 25 years ago and personal loans nearly 19 years ago. That our Compound Interest, Per sonal Credit, and Special Checking Departments should report at the year-end some 775,000 accounts in dicates that New Yorkers have re sponded wholeheartedly to these services. With more goods available to buy, the volume of savings could hardly equal 1945 but the past year was a notable one for thrift. Our total Compound Interest deposits in New York City were $323,000,000 on December 31, an. increase for the year of $43,000,000. As normal pursuits were resumed, as veterans took up civilian employ ment, and as post-war needs devel oped, the Personal Credit Depart ment was in a position to continue its help to anyone with a good re cord who could use credit construc tively. Consumer credit now is being extended in larger volume than in the most active pre-war months. Among the many kinds of loan, service was the further active development of the Veterans Loan Service staffed by experienced former service men specifically to give attention to their fellow G. I.’s. In addition to tens of thousands of personal loans made to those who had returned from service, the Ve terans Loan Service made for busi ness purposes alone 2,500 loans which included several hundred loans made under the government-spon sored plan generally called the “G.I. Bill of Rights.” Many of these business loans have already been repaid in full, most of them partial ly so. FOREIGN OPERATIONS We now have 45 active foreign branches, 2 in London, 35 in South and Central America, and 8 in the Far East. As the production facilities of the world turn to peacetime operation, the volume of world trade is rapidly expanding. A part of this is govern ment financed and controlled, such as shipments for UNRRA and for the British Government under the Anglo-American financial arrange ments. Some countries are spend ing their war-accumulated dollars to restore their railways and refill their food bins; Increasingly, trade is returning to more normal channels. Most of these varied transactions require the use of banking facilities, and the world-wide branch organ ization of the National City Bank with its trained personnel and its own offices and local funds in world commercial centers is in a strategic position to meet the needs. Our Commercial Credit Department, for example, is handling a record volume. Our officers in Head Office and the foreign branches are receiving more visitors and answering more mail than ever before. The London, South American, and Carribbean branches are rapidly re suming normal operations in facil itating trade. The Far Eastern branches re opened in 1945 have reassembled their staffs and are active in serving American exporters and importers and agencies of our Government. (Continued on page 22) We Aim AGE PRINTING CO. Operating TONG CHEONG SON, INC. Printers—Bookbinders—Typefounders 321 Barbosa, Manila Sole Importers SORIANO TRADING CO. M. R. S. Bldg. Tel. 2-79-61 The American Chamber of Ccmmcrce Journal April, 1947 21 Reynoso Alexander Experts Join Reynoso Firm Glen D. Alexander, electrical ad vertising expert, and Col. Don Bell, advertising executive, have recently been engaged by the Reynoso Ad vertising Corporation, to head its Neon and Advertising Agency div isions. The two experts plan to in troduce in the Philippines the latest developments in advertising produc tion along their specialized lines. Mr. Alexander, who had identi fied himself with neon advertising since the early stages of neon sign manufacture in the United States, since 1928, has continuously been in the electrical advertising field with various advertising firms in the United States. He has also taken part in the development and pro duction work of the neon directional tubes on floats, one of the numerous inventions used by the United States Armed Forces to win the last war. The gadget was used by the United States Navy to effect difficult night On July 22, 1946, the Tokyo Branch resumed operation on a limited basis to provide financial facilities for United States Government agencies and personnel. Considerable progress has been made in reducing the number of items which represent possible losses due to war causes, and our total loss will be very much less than the amount originally estimated and reserved for. Among the questions now being raised is that of financing exports and imports beyond the period when countries are using accumulated dollars or are the beneficiaries of government loans. Already in some cases private financing is again pos sible. In others the risk is so great in present unsettled world conditions that normal trade financing is not possible. We are cooperating with the Export-Import Bank and other Government Agencies. We recognize, however, that no mechanisms or legerdemain are a Bell landing maneuvers along mined and obstructed waterways. Mr. Alexander is already working on the installation of the Reynoso neon plant and expects to get the complete equipment in working or der before the end of this month. “The high cost of neon advertis ing in Manila could be cut to the minimum if we use the newly de veloped manufacturing processes, and if the signs are completely fabricated here. I hope to effect this with the latest equipment and sup plies which I have already ordered and which we are expecting to re ceive the early part of this month,” said Mr. Alexander. Col. Bell, who is really a different person, from Clarence Beliel, who used the same name as a radio com mentator before the war, had exten sive agency experience in newspaper and radio advertising from New York and Philadelphia. Under Gen substitute for the stability and re liability of the borrower, which are the only sound basis for credit. PERSONNEL We again pay our respect by list ing below the name of one member of the staff of the Trust Company who gave his life in the service of his country and whose death was reported to us during the past year. This name raises the total number of gold stars on our flag to 55. KENNETH PETERSEN, Ser geant, U. S. Army Air Corps, form erly with the Brooklyn Office of the Trust Company. Of the total of 1,863 employees of the Bank and the Trust Company who entered military service, 1,686 are known to have been released from the Services so far. We are glad to report that 1,276 or 76% of them have returned to us and have quickly and competently fitted into positions suited to their personal eral Chenault, he has also disting uished himself as a member of the famed “Flying Tigers” who were the terror of the Japanese Air Force in China at the beginning of the war. After serving in the Office of Stra tegic Services for sometime after “VJ DAY,” he resigned from the army and took up again his first love—advertising. Bibiano L. Reynoso, president of the corporation, one of the biggest advertising firms in the Philippines, has announced that his organization will engage in all forms of advertis ing services. Filipino and American specialists will occupy key positions. First to operate is the outdoor ad vertising under E. Q. Uson, prof essor in advertising at the Far East ern University. Uson has long been in the advertising field. He did ad vertising production work for the DMHM Newspapers, Manila Daily Bulletin and other advertising agencies before the war. qualifications and experience, gained both in. the Bank and in the armed services. The return of these men and women has strengthened the staff for its increased tasks. The total staffs of the Bank, in cluding Foreign Branches, and the Trust Company now number 11,774, compared with 10,034 at the end if 1945. Of the present total, 7,914 are in New York City, 1,264 em ployees have completed over 25 years of service with us and have entered the select circle of our Quarter Cen tury Club, whose membership con stitutes the backbone of the Bank. There are now 344 of our people who are receiving retirement income. During the year we have taken further steps toward completing the program for funding the past service retirement allowances which was begun in 1944. We have again made an extra year’s payment of $1,550,000 out of reserves to the Insurance Company underwriting the annuities, thus completing half of the funding The American Chamber of Commerce Journal April, 1947 22 program. We have also used funds released from reserves set aside to cover possible war losses and no longer required for that purpose, to add $3,250,000 to the retirement reserve, which we estimate is now adequate to cover the balance of the past service funding program (af ter allowing for future tax deduc tions). Acceleration of the funding program has saved interest, and there haVe been other savings from the original cost estimates due to turnover of staff. BOARD OF DIRECTORS AND OFFICERS In January, 1946 Joseph P. Grace, the oldest director in, service, re signed after completing 39 years of valued association with us. His son, Joseph P. Grace, Jr., President of W. R. Grace & Company, was elect ed to the Board. We record with sorrow the death during the year Of Boies C. Hart, Vice-President and Manager Over seas Division and of Vice-Presidents William A. Creelman, William J. Noonan, Murray S. Wilson and also of Jacob Wohnsiedler, recently re tired, each of whom had served as a senior officer of the Bank for many years. GORDON S. RENTSCHLER, Chairman of the Board W. RANDOLPH BURGESS, Vice-Chairman of the Board' WM. GAGE BRADY, JR., President Bureau of the Census . . . (Continued from page 19) ing of a new census. All preliminaiy steps have been taken, such as the printing of forms and schedules, pre parations of some 50,000 apointments for census boards, super visors and enumerators etc. All that is now lacking is the apportion ment of all the different forms and schedules among the different pol itical subdivisions and their ship ment to more than 1,000 local census boards. As soon as the President proclaims the definite census day, enumeration will start all over the Philippines and the collection of related social and economic data. When the census is completed, the present population of the Philippines will be definitely* known. Also, accurate information on war mortality and damages will be available. The population census will be supplemented by a census of agriculture, census atlas, and an eco nomic census which will cover real estate, forestry, mines, fishing, elec tricity, transportation, manufac tures, commercial establishments and the professions. Republic of the Philippines Department of Public Works and Communications BUREAU OF POSTS Manila SWORN STATEMENT (Required by Act No. 2580) The undersigned, Robert S. Hendry, editor of American Chamber of Commerce Journal, published monthly in English at the American Chamber of Commerce, after having been duly sworn in accord ance with low, hereby submits the following state ment of ownership, management, circulation, etc., which is required by Act No. 2580, as amended by Commonwealth Act NO. 201: Name Post-Office Address Editor—Robert S. Hendry Trade & Commerce Bldg. Business Manager-----Owner—American Cham-:’ ber of Commerce Trade & Commerce Bldg. Publisher — American Chamber of Commerce Trade •& Commerce Bldg. Printer—Carmelo & Bauermann, Inc. 2057 Azcarraga If publication is owned by a corporation, stock holders, owning one per cent or more of the total amount of stocks: NO Bondholders, mortgages, or other security holders owning one i.er cent or more of total amount of security: NONE In case of publication other than daily, total num ber of copies printed and circulated of the last is sue dated February, 1947. 1. SenJ to Pa><’ subscribers — — — — 410 2. Sent to others than paid subscribers 1,485 Total — —---------------- 1,895 (Sgd.) ROBERT S. HENDRY Editor Subscribed and sworn to before me this 8th day of April, 1947. at Manila, the affian exhibiting his A.R.C. issued at Manila on Feb. 27, 1947. (Sgd.) HTLARION O. EGU1A Notary Public Until Dec. 31, 1947 Doc. 75 Page 93 Book No. IV, Series of 1947. THE BACHRACH MOTOR CO., INC. PORT AREA, MANILA NASH-ENGLISH AUSTIN AUTOMOBILES WHITE-FEDERAL TRUCKS ------------------OPERATING------------------RURAL TRANSIT PASSENGER—FREIGHT SERVICE BETWEEN MANILA—APARRI A betteiTblend^ /FOR BETTER DRINKS O (S' Ihompson BRAND Glenmore Distilleries Company Louisville, Kentucky Sole Importers SORIANO TRADING CO. M. R. S. Bldg. Tel. 2-79-61 The American Chamber of Commerce journal April, 1947 23 CO Cl CO o T-l t~ to Tf co co co t-Vn ci CO <N rH CO NH T-l [”#00000 CO rH <N O O CO t> CD rH to t> N CO CO*" 00 CO Cl Cl of to CO rH CJ 00 The American Chamber' of Commerce Journal April, 1947 24 When Traveling Carry National City Letters of Credit and Travelers Checks. GOOD EVERYWHERE • SAFE • SELF ■ IDENTIFYING The National City Bank Of New York 1 cubic icet Place youGENERAL A,.Maguey HOME FREEZER with hermetically sealed unit order noir (p. i.) ★ ELECTRIC INC. 120—ll’.th ST. PORT AREA, MANILA FINANCIAL SERVICE ★ Mail and Cable remit tances to most parts of the World ★ Foreign Collections ★ Documentary Credits TRAVEL SERVICE ★ Air Lines ★ Steamship * Travelers; .■btffefs of CredjWr^V^' * Drafts * Travelers Cheques * Money Orders ★ Train & Pullman ★ Hotels & Resorts FOREIGN SHIPPING SERVICE Merchandise of every description, personal effects and baggage accepted for foreign shipment in accordance with existing regulations of various countries. Protect your travel funds with American Express Travelers Cheque THE AMERICAN EXPRESS CO., INC. EJ linear Filipino Bide.—Juan I.una St. — Tel. 2-71-56 General Foreign Agents NEW YORK CENTRAL RAILROAD