The American Chamber of Commerce Journal Vol. XXIX, No.6 (June 1953)

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Title: The American Chamber of Commerce Journal Vol. XXIX, No.6 (June 1953)
Issue Date: Vol. XXIX, No.6 (June 1953)
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extracted text: Published monthly by the American Chamber of Commerce of the Philippines 424 San Luis Street, Manila, Philippines — Telephone No. 3-23-24 A; V. H. Hartendorp Editor and Manager Entered as second class matter at the Manila Post Office on May 25, 1921, and on December 10, 1945 Subscription rate: P5.00 the year; $5.00 in the United States and foreign countries Officers and Members of the Board of Directors of the American Chamber of Commerce of the Philippines J. H. Carpenter, President; W. C. Palmer, Vice-President; R. J. Baker, Treasurer; F. C. Bennett, S. W. G. Lehman, Paul R. Parrette, E. E. Selph, W. M. Simmons, and Paul H. Wood. Mrs. Virginia Gonder, Executive Vice-President; I. T. Salmo, Secretary Vol. XXIX June, 1953 No. 6 Contents Editorials— Elizabeth II, Queen........................................................................................................................................................................................................................... 219 The MSA and PHILCUSA—Renne and Yulo...................................................................................................................................................................... 219 The New Labor Law......................................................................................................................................................................................................................... 222 Short History of Industry and Trade in the Philippines (Concluded)—The Roxas Administration.......................................................................................................................... The Business View — The Government................................ ...................................................................................................... Banking and Finance.................................................................................................................................. Manila Stock Exchange......................................................................................................... Credit.................................................... Electric Power Production....................................................................................................................... Real Estate.................................................................................................................................................... Building Construction................................................................................................................................ Port of Manila............................................................................................................................................. Ocean Shipping and Exports....................................... .......................................... Freight Car Loadings................................................................................................................................. Lumber.................................................................................................................. Mining......................................................................................................................................... Copra and Coconut Oil......................................................................................................... Desiccated Coconut.................................................................................................................................... Manila Hamp............................................................................................................................ Sugar................................................................................................................................................................. Tobacco....................... ................................................................................................................................ Imports........................................................................................................................................................... Food Products.............................................. "........................................................................... Textiles...................................................................................................................................................... Legislation, Executive Orders, Court Decisions............................................................... Philippine Safety Council......................................................................................................................... Cost of Living Price Index, 1948-1953....................................................................................................... The “Let Your Hair Down” Column......................................................................................................... A.V.H. Hartendorp........................................ 223 Official Sources................................................. 236 W. M. Simmons.............. 237 A. C. Hall.................... 237 R. A. Callahan.. 238 J. F. Cotton.......... 238 A. Varias............ 239 J. J. Carlos . . . . 240 L. R. Wentholt. . . 240 B. B. Tunold. 240 J. B. Libunao............ 240 P. de Ocampo........... 241 H. A. Brimo........... 243 E. F. Underwood. . 245 H. R. Hick................ 247 T. W. Jurika............... 247 J. H. d'Authreau . 248 L. A. Pujalte.......... 249 S. Schmelkes... 250 W. E. M. Saul. 251 W. V. Saussotte. 251 E. E. Selph............... 252 F. S. Tenny........... 254 Bureau or the Census and Statistics........... 255 .................................................................................. 256 50 CENTAVOS THE COPY free services at your friendly Mobilgas station help your car last longer! HEN you stop for Mobilgas or MobHoil at the Sign of the Flying Red Horse, your Mobilgas Serviceman gives... free of charge... such services as cleaning your windshield, rear window and headlights; checking your battery, motor oil, radiator, tire pressure, etc. Your Mobilgas Serviceman is trained to give expert advice on your car-needs. He wants to help keep your car running at top perforaaanaa. Always stop at the Sign of the Flying Red Horse! STANDARD-VACUUM OtL COMPANY PHILIPPINES Editorials ” to promote the general welfare” That the ceremonial of the coronation of Queen Eli zabeth II was no mere outward show, for all its pageantry and pomp, was most forcefully expressed Elizabeth II, by the young woman who, but a few Queen hours before, had been the subject of it all. The recognition and the acclama tion, the annointing, the crowning, the homage of the people, amidst a scene of unmatchable splendor and dig nity, was referred to by her in her coronation address in only a few simple words: “The ceremonies you have seen today are ancient, and some of their origins are veiled in the mists of the past. But their spirit and meaning shine through the ages, never, perhaps, more brightly than now. I have sincerely pledged myself to your service ... the varied peoples to whom I owe my duty. . .” The crowning of a British sovereign is more than a British event. Except for Greece and Rome, and perhaps not even excepting them, the peoples of the world owe so much to the people of the British Isles, that “Her Most Excellent Majesty, Elizabeth the Second, by the grace of God Queen of this Realm and of all her other realms and territories, Head of the Commonwealth, Defender of the Faith,” is, in a sense, Queen of all the world. This can not have occurred to the modest young sover eign herself, but she did speak of the reason why this is so when she said: “.. .there has sprung from our island home a theme of social and political thought which constitutes our message to the world and which through the changing generations has found acceptance both within and far beyond my realms. Parliamentary institutions, with their free speech and respect for the rights of minorities, and the inspiration of a broad tolerance in thought and its expression,—all this we conceive to be a precious part of our way of life and outlook. “During recent centuries, this message has been sustained and invi gorated by the immense contribution,—in language, literature, and ac tion, of the nations of our Commonwealth overseas. It gives expression, as I pray it always will, to living principles, as sacred to the crown and monarchy as to its many parliaments and peoples. I ask you now to cherish them,—and to practice them, too... Then we can go forward together... seeking justice and freedom for all men.’’ There, indeed, spoke a Queen to which all the world owes, if not formal fealty, all respect and honor. The MSA and PHILCUSA—Renne and Yulo The announcement late last month that Dr. Roland R. Renne had submitted his resignation as Chief of the U. S. Mutual Security Agency Mission to the Philippines and that it had been accepted, “though with reluctance,” by Harold E. Stassen, Director for Mutual Security, Wash ington, brought out many expressions of regret in official and business circles and in the press coupled with tributes to the high quality of Dr. Renne’s services. There was no hint of anything “political” in the resig nation or its acceptance. Two years ago, Dr. Renne, as President of Montana State College, was given a year’s leave of absence by the Montana State Board of Educa tion, and a year ago this leave was extended for another year but with the express understanding that Dr. Renne would return to the College at the end of this period. That was the reason for the resignation. Director Stassen, in his letter of May 9, accepting the resignation, stated: “You may be justly proud of the record you have made as the first Chief of the U. S. Special Technical and Economic Mission to the Philippines. This has been a path-breaking task and sometimes, I am afraid, a back-breaking one . . . Your intelligent and devoted service in the Philippines will benefit the Mutual Security program there for a long time to come.” Almost coincidental with Dr. Renne’s resignation was the resignation of Mr. Jose Yulo as Chairman of PHILCUSA (Philippine Council for United States Aid), sub mitted by him, and accepted by President Quirino, so that he could accept the nomination to the Vice-Presidency of the Philippines which he received at the National Con vention of the Liberal Party a day or so later. President Quirino's appointment of the able Placido M. Mapa as Chairman of PHILCUSA in Mr. Yulo’s place, is a happy one, though the burden of work now laid on him is a very heavy one indeed. Mr. Mapa remains Chairman of the Rehabilitation Finance Corporation and was ad ditionally appointed Acting Secretary of Agriculture and Natural Resources to take the place of Vice-President 219 Fernando Lopez in that position, who had resigned to join the opposition group recently formed by former Ambas sador Carlos P. Romulo. As of the time of this writing, there has been no an nouncement with respect to the appointment of a successor to Dr. Renne. qn the occasion of the resignations of both Dr. Renne and Mr. Yulo, it is interesting to put down here for the record that up through the current fiscal year, ending June 30, the United States Government has made available to the Philippines through the Mutual Security Agency alone a total of $77,000,000 in grants, not including the military aid the extension of which is a part of the Mutual Security program but which is conducted through the Department of Defense and the Military Assistance Ad visory Groups1 in the different “Non-Nato” (North At lantic Treaty) countries. The $77,000,000 in grants is comprised of $15,000,000 for the interim period, April to June, 1951; $32,000,000 for the fiscal year ended June 30, 1952; and $30,000,000 for the current fiscal year. This, together with a loan of $25,000,000 from the U. S. Export-Import Bank, $20,000,000 of this for the Ambuklao hydro-electric project of the National Power Corporation and $5,000,000 for private industrial loans, brings the total in grants and loans for the first two years up to over $100,000,000. In turn, the Philippine Government appropriated P50,000,000 in 1951 to set up the Counterpart Fund, which was subsequently increased by another appropria tion of P25,000,000 in 1952. The grant funds in dollars have been programmed as follows: Agriculture, forestry, and fisheries.......................... ?28,250,000 Transportation, power, and public works............ 16,000,000 Public health.................................................................. 9,000,000 Public administration.................................................. 250,000 Maintenance of essential supplies........................... 12,000,000 Technical assistance..................................................... 6,500,000 The “programming” of these funds does not mean that all the projects approved have been completed or that all the money allotted has as yet been spent. Work on some of the projects has hardly been started and there has been delay in the execution of others, notably, for example, in the case of the irrigation-pump project which met with difficulties apparently centered in the Depart ment of Agriculture and Natural Resources. But as Dr. Renne stated in an address at a convention of government civil engineers last April, it is not the policy of the MSA to see how much money can be disposed of in the shortest possible time. He emphasized the fact that the MSA is an “assisting, advisory, and facilitating body” and that all projects to which American assistance is ex tended are “Philippine projects, executed and carried through by Filipinos for the sound development of the Philippines.” “PHILCUSA”, he said, “was established by the Philippine Government as its supervisory agency. . . the Mission entertains no project that it does not consider jointly with PHILCUSA.” tt is well worth while, as we are on the subject, to relate the Philippine program to the Mutual Security Program as a whole, which, in its present form, is based on the legis lation known as the Mutual Security Act of 1951 (Public Law 165, 82nd Congress) and the subsequent appropria tions for putting it into effect. Its real beginnings, however, date back to 1947 with the economic and military aid given to Greece and Turkey in direct response to Soviet Russian pressure against these countries. This was followed by the famous Marshall Plan and the United States Aid to European Recovery, that same year, the Economic Cooperation Act of 1948, the North Atlantic Treaty and the Mutual Defense Assistance Act, both of 1949, and the International Deve lopment Program, also of 1949 and better known as the “Point Four Program”,—all based on the central idea that the security of the United States depends in large part on the security of other nations. The Philippines was first related to the program in a general way in 1947 with the signing of the Military Bases Agreement and the Military Assistance Agreement. Later, in 1951, came the Mutual Defense Treaty between the United States and the Philippines. Meanwhile, early in 1950, President Quirino, on his visit to the United States at that time, had appealed to President Truman for a con tinuation of American assistance to the Philippines and had proposed the formation of a joint Philippine-American commission to study the situation. The outcome of this was the dispatch of the U. S. Economic Survey Mission to the Philippines (not a joint body), headed by Daniel W. Bell, which arrived in Manila on July 10. The Com mission, under the date of October 9, 1950, submitted one of the most comprehensive reports ever written on the economy of the Philippines, and this was followed promptly by the drafting and signing of the Quirino-Foster2 Agree ment of November 14, 1950, which provided for the opera tion of the ECA (Economic Cooperation Administration) program in the Philippines “along the general lines already established by the ECA in its relationship with other sover eign states.” The PHILCUSA (Philippine Council for United States Aid) was then established to implement the forthcoming aid program, and in April, 1951, the first mem bers of the ECA Special Technical and Economic Mission arrived to start the administration of the program, which, later, was continued by the Mutual Security Agency. yyviTH the change of Administrations in Washington ™ and the appointment of Governor Harold E. Stassen as Director for Mutual Security by President Eisenhower, one of the first acts of Director Stassen was to invite and to organize a group of some fifty-four American business executives, with Clarence Francis3 as Chairman, to evaluate the Mutual Security programs and personnel in various countries, including the Philippines. The Philippine team was headed by F. N. Belgrado, President of the First National Bank of Portland, Portland, Oregon, and spent several weeks in the Philippines in February of this year. The evaluation of MSA activities in the Philippines was somewhat critical, though considerably less so than the evaluations of the organization’s activities in some other countries. The group found the general objectives in the Philippines sound, but concluded that inadequate progress was being made in achieving these objectives. It believed that too many projects were undertaken in too many fields and recommended that activities be concen trated on a much smaller number of major projects, such as the development of roads and bridges in rural areas, irrigation and drainage projects, vocational education development, construction of potable water facilities in rural communities, and eradication of malaria. Among other recommendations were that more au thority be delegated to the Chief of Mission, division heads, and technical assistants in Manila to avoid delays in secur ing Washington approval, and, notably, that “greater use be made of the experience of American residents in the Philippines.” The report of the evaluation group as a whole, dated May 29, 1953, on MSA activities in all the various coun tries, stated that the progress made “is a credit to the many who have contributed to its success”, but concluded that “because of the improved situation, further financial aid for economic purposes be reduced substantially for the 220 June, 1953 AMERICAN CHAMBER OF COMMERCE JOURNAL 221 To provide the additional electric service demanded by you, my generating stations, my transmission lines, my substations and my distribution lines arc constantly expanding. More Power to You, Your Faithful Servant, Reddy Kilowatt MANILA ELECTRIC COMPANY 134 San Marcelino. Manila Tel. 3>2 1-21 next year and generally discontinued by June, 1954.” However, the report pointed out, “there are some specific and important exceptions to the above general statement such as exist in the Far East. The situation affecting each country should be considered separately on its individual merits.” The report went so far as to recommend the liquida tion of the MSA as such, including the special economic missions abroad, and the transfer of reduced functions to the State Department under an office, to be newly created, of an Under-Secretary for Economic Affairs. The abolition of the present counterpart system was also recommended, with aid to be given “pursuant to a single set of negotiatiorts covering all forms of aid and under a written agree ment setting forth aid to be furnished by us and the under takings accepted by the recipient government.” Most drastic was the recommendation: “The use of foreign aid funds should be limited to direct military aid, and economic aid given only where it can be directly related to defense and given in the form of loans instead of grants. We further recommend that reimbursement for military aid items be required from the recipient country where economically feasible.” With specific reference to the Far East, however, the report stated: “As the individual reports from the Far Eastern countries indicate, many of the observations in this summary report do not fully apply to the Far East, where the problems are quite different from those of Europe. The Far Eastern countries are relatively under-developed. Greater assistance must be given their governments in administering economic and military programs and more emphasis must be placed on technical assistance.” There can be no question that the MSA in the Philip pines has been a constructive force during the past two years and that its general influence has been salutary, though not as great as had been hoped for. It is certain that too much was hoped for and that, in a sense, all such organiza tions as the MSA are self-defeating. The economist F. A. Hayek, from whose book, “T|ie Road to Serfdom”, we have quoted before, states: “When a government thus becomes the main source of investable funds, it inevitably speeds up the process of government domination of business. It is an irony, of which the American public has hardly yet become aware, that in many countries to which American capital has gone, it has been used largely to extend state control at the expense of private enterprise. There is more than a germ of truth in the gibes that the United States has been financing the socialization of Europe. Socialist parties have successfully insisted that nationalized industries get the lion’s share of American funds.” The American Government in lending and giving away its tax-payers’ money to other governments is inevitably encouraging statism and nationalization in such countries at the expense of the free enterprise which is the basis of the democratic system. Thus, in seeking to promote the “mutual security” against the menace of Russian totalita rianism, America is itself fostering the growth of totalita rianism in many areas. This is a “contradiction” which could be fatal if it is not eliminated. The recently enacted Paredes-Espinosa Act,—“An Act to Promote Industrial Peace,” in the drafting of which both the Philippine Department of Labor The New ‘ and the Mutual Security Agency assisted, Labor Law has been hailed locally as the “Magna Carta of Labor”, yet contains many features of the American Taft-Hartley Labor Law, especially with respect to the regulation of unions, which commend it to management. Like the American law, the new Philippine law em phasizes the settlement of disputes through free collective bargaining rather than through compulsory arbitration, thereby placing the chief responsibility for settlement on labor and management, where it belongs as they are the most directly and the most vitally concerned. Under the former powers of compulsory arbitration granted the Court of Industrial Relations, which powers the new law has virtually abolished,.there was always the threat of undue encroachment on what are generally ac cepted as being the prerogatives of management and labor. It seemed even that it would be only a question of time before the Court, in its decisions on wages, would extend its authority to the fixing of production quotas and prices! In some of its decisions, the Court began to rule on what manager a business firm should or should not have. In the Koppel case decision, the sanctity of labor contracts was impugned. In tlie Philippine Education Company case, the Court has to this day hampered proper business rela tionships by forbidding the Company to lay off employees for just economic necessity. The emphasis laid on the principle of collective bar gaining by the new law should foster a more harmonious relationship between management and labor than com pulsory arbitration is ever likely to achieve. It will tend to equalize the positions of the two and add an element of dignity to labor-management negotiations which has often been lacking in the past. To insure that both parties will enter into the collective bargaining in good faith, the law provides for certain procedures, which, however, in the presence of good faith, will be no more than formalities. An important change instituted by the law concerns the representation of workers by unions. Under the old law, workers rarely had a real voice in the choice of the union which would represent them. Often several unions claimed jurisdiction over the same group of workers, this not only creating antagonism among the workers them selves but making it almost impossible for company officials to determine which union they should deal with. The ne cessity of establishing some sort of union responsibility, in many cases led employers to seek security,—often a false security, by encouraging company unions. Under the new law, workers will choose the union to represent them by secret ballot; they can also choose to belong to no union. The Court of Industrial Relations will certify to the union which wins the majority of votes as the collective bargaining representative of any group. Under this procedure, company officials will be able to deal with a union without fear of interference by some rival labor organization. The coercion which has been practiced by the leaders of some unions over their membership, often for the pur pose of enforcing a racket, is forbidden by the new law. The law grants the Court of Industrial Relations the au thority to declare certain stated acts of unions as well as of management as “unfair labor practices” and provides the Court with sufficient power to enforce its decisions swiftly. Unions, for example, are forbidden to force a worker to join, to force recognition on a company, or to demand payment for services not performed. Employers, on the other hand, are forbidden to discriminate against employees for engaging in legitimate union activity, to refuse to bar gain collectively with a certified union of their employees, to assist or seek to dominate unions, or to demand, as a condition of employment, that a person shall not join a union. There is nothing in the new law which forbids any type of union security clause. Unlike the Taft-Hartley Act, the closed shop is not forbidden, and union-shop elections before the presentation of a demand at the bar gaining table are not mentioned as a requisite. The abolition, by the new law, of labor injunctions, except in national emergencies, will, it is believed, prevent many of the type of strikes called in the past because of the belief of union leaders that they would shortly be ended by injunction. Under the present law, strikes will have to be won or lost; the unions can not depend on management 222 Short History of Industry and Trade in the Philippines (Concluded) The Roxas Administration By A. V. H. Hartendorp MANUEL Acuna Roxas, inaugurated President of the Commonwealth of the Philippines on May 28, 1946, became the first President of the Republic of the Philippines some five weeks later upon the establishment of the nation’s independence on July 4. After something less than two years in office, he died of a heart attack while on a visit to the United States air base at Clark Field, Pampanga, on April 15, 1948. What he accomplished during his brief administration, and, perhaps more important, what policies and measures he started and were continued by his successor in office, President Elpidio Quirino, is the subject of the present section of this short history of Philippine industry and trade. Born January 1, 1892, Roxas was 54 years old at the time he be came President. He belonged to what may be called the second genera tion of Filipino statesmen to come to prominence during the American regime. Manuel Quezon and Sergio Osmena, the first bom August 19, 1878, and the second September 9, of that same year, were both 14 years older than Roxas. Quirino, bom November 16, 1890, was only a little over a year older than Roxas. Roxas was one of the ablest Filipinos of his generation and his political experience was very broad. He was a “product” of the public school system established by the Americans, graduating in 1913 as Pres ident of the first graduating class of the College of Law, University of the Philippines. Obtaining the highest grades in the bar examination, he was selected by Chief Justice Cayetano Arellano as his law clerk. He was elected Governor of Capiz in 1919 and was so outstanding a provincial executive that he was elected presiding officer of the pro vincial governors’ national convention two years later. He was elected to the House of Representatives in 1922 and was almost immediately elected Speaker, which position he held for over eleven years. During the Commonwealth period, in 1938, President Quezon appointed him Secretary of Finance. He was elected to the Senate in 1941, the year the war broke out, and became President of the Senate after the Libe ration. He was a member of various independence missions sent to the United States. He was a member of the Constitutional Convention which sat in 1934-35. He was a member of the Joint Preparatory Com mittee on Philippine Affairs, appointed in 1937. As one of the heads of the “Osrox” mission, which “brought home the Hare-Hawes-Cutting Act”, and as a member of the Joint Preparatory Committee on Philippine Affairs, Roxas became thoroughly familiar with problems of Philippine-American trade. He was at various times Chairman of the Board of Directors of the National Development Company, Chairman of the National Food Products Corporation, Chairman of the National Rice and Corn Corporation, Chairman of the Insular Refining Corporation, and a member of numerous other government boards and committees. His association with the direction of various government corporations over a period of many years generally predisposed him in favor of this type of government business organization. At the outbreak of the war, Roxas was already member of the reserve forces and immediately reported for active duty. General MacArthur designated him as liaison officer between the USAFFE and the Commonwealth Government, with the rank of lieutenant-colonel. Later, while in Mindanao, he was promoted to brigadier-general by General Wainwright. He was taken prisoner there by the Japanese and was brought to Manila. How he resisted cooperation with the enemy, has been brought out in earlier sections of this short history and is told at length in the book, “Roxas”, by his close friend, Marcial P. Lichauco, published in Manila last year. The 1945-46 presidential campaign, the election of Roxas, his inauguration, and the establishment of the Republic was described in the preceding section. The Cabinet.—On his return to Manila from his brief visit to the United States, on May 20, Roxas, as the President-elect, immediately designated some of the men who would make up his Cabinet. They were: Vice-Pres ident Elpidio Quirino, Secretary of Finance; Jose C. Zulueta, Secretary of the Interior; Roman Ozaeta, Secretary of Justice; Mariano Garchitorena, Secretary of Agriculture and Commerce (later Secretary of Agriculture and Natural Resources); Ricardo C. Nepomuceno, Secretary of Public Works and Communications; and Pedro Magsalin, Secre tary of Labor. Emilio Abello was designated Chief of the Executive Office. Later appointments included a shift of Vice-President Quirino from the position of Secretary of Finance to Secretary of Foreign Affairs and the appoint ment of Miguel Cuaderno to the former position. Manuel Gallego was appointed Secretary of Public Instruction; Antonio Villarama, Secretary of Public Health and Wel fare; and Ruperto Kangleon, Secretary of National Defense. Pio Pedrosa was appointed Commissioner of the Budget. In January, 1948, Placido Mapa became Secretary of the new Department of Commerce and Industry. There were no other changes in the Cabinet during President Roxas’ term of office. President Roxas retained Carlos P. Romulo as Re sident Commissioner in Washington until July 4, 1946, the date of independence, at which time he appointed Joaquin M. Elizalde as the first Philippine Ambassador to the United States, designating Romulo as the permanent delegate from the Philippines to the United Nations General Assembly. The Congress.—Congress sat in its first session (it began as the Second Congress of the Commonwealth, but became the First Congress of the Republic) from May 25 to September 18, 1946; a Special Session sat from Septem ber 25 to September 30, 1946. The Second Session opened January 27 and closed on May 22, 1947; the Third Session lasted from January 26 to May 20, 1948, and encompassed the President’s death on April 15. During the whole of this period, Jose Avelino was President of the Senate, and Eu genio Perez was Speaker of the House. In the House, to obtain injunctions. With respect to strikes, it is to be noted that the law provides for a more active Department of Labor mediation and conciliation (as opposed to com pulsory arbitration), which service will seek to intervene before labor troubles flare up into strikes. The law regulates the internal affairs of unions to prevent control by those who would use their positions for purposes of subversion or mere self-aggrandizement. If there is any violation of the regulations covering internal union affairs, action may be taken to secure relief by as small a proportion as ten percent of the membership, and if the charges are proved, the violations are to be dealt with as unfair labor practices. Some of the stipulations for the unions made by the law are: (1) no arbitrary or excessive fees are to be charged, (2) detailed financial re ports are to be made to the membership, (3) officers are to be elected by secret ballot at intervals not to exceed two years, (4) votes on major policies as well as on strikes are to be taken by secret ballot, (5) no subversives are to be admitted as members, or, if discovered, are to be allowed to remain members, and (6) no person convicted of a crime involving moral turpitude is to act in any official union position. All in all, the Paredes-Espinosa Act would seem to provide genuine opportunity for the establishment of amic able and responsible labor management relations. The law would seem to mean the end of both governmentcontrolled and racketeering unions. We believe that management will play its part under the new law in good faith and that responsible labor leaders will now come for ward. 223 Liberal Party members numbered 79, Nacionalistas 14, Democratic Alliance 3, with 1 Independent; in the Senate the Liberals numbered 10 and the Nacionalistas 6. The Outstanding Developments during the Roxas Administration.—From the business point of view, the Roxas Administration is notable especially for the establish ment of the Rehabilitation Finance Corporation, a truly constructive step, and for the revival of various previously existing government corporations, including a re-organized entity, best known as the PRATRA, of unlamented me mory; for the surveys and studies for the development of a country-wide hydro-electric power system; for the ground work done in the establishment of the Central Bank, (not inaugurated until January 1, 1949), which marked a revo lutionary change in the country’s currency and banking system; and for the beginnings of the system of govern ment control over imports. These various developments were associated with the appearance of several notable reports: (1) “Report and Recommendations of the Joint Philippine-American Finance Commission”, published together with “Philippine Eco nomic Development, A Technical Memorandum,” both dated June 7, 1947; (2) the “Proposed Program for Indus trial Rehabilitation and Development,” prepared, by the technical staff of the National Development Company under the supervision of the H. E. Beyster Corporation, dated June 24, 1947; and (3) the report, the writer will say the magnificent report, “Electric Power Program for the Republic of the Philippines”, prepared by the Westing house Electric International Company, dated December, 1947.1 Short as it was, the Roxas Administration may per haps be said to have been the most important in all Philip pine history, as it set the course which the Republic has followed up to the present with almost suicidal perseverance. It is fairest to use the words of President Roxas himself as to his aims and plans. During his two-year period of office, Roxas delivered three addresses to Congress on the state of the nation,— the first on June 3, 1946 (a month before the establishment of independence); the second on January 27, 1947, eight months later; and the third on January 26, 1948, less than three months before his untimely death. The first of these addresses was of great importance at the time as outlining the policies and plans of the Ad ministration, and is still of importance today because these have in the main been continued by the Quirino Adminis tration despite the fact that the need of modification in some respects has been plainly indicated by experience. The First “State-of-the-Nation” Address.—Pres ident Roxas began his first state-of-the-nation address by saying that it was not necessary for him “to dwell too long on our present situation,”— “all of you can see with your own eyes the destruction which surrounds us and the great perils which threaten our survival as a nation. . . Our people are to inherit a prostrate and war-devastated land. The extent of that devastation was total. Despite the hum and bustle of activity in our cities, we have not yet started on the major premises of recon struction. . . We are faced first of all by the fact that our Government is without financial means to support even its basic functions, not to speak of the great projects in rehabilitation and economic development which we contemplate and which are, indeed, vital to our continued existence. A tentative pared-to-the-bone budget estimate for the next 1 An earlier report, which did not receive much public notice, was that of a group of American agriculturalists, sponsored by the U. S. Departments of State and Agriculture, which at the invitation of the Philippine Government, came to the Philippines in July, 1946. to appraise the destructive effects of the war on the coun try's agricultural economy and to consult with Philippine authorities on plans for an early rehabilitation of agricultural production and the institution of a longrange program of agricultural development. A joint American-Philippine group was formed which recommended: (1) Improvement of facilities for the produc tion, processing, and marketing of all agricultural products, both those raised for domestic use and those produced mainly for export; (2) greater emphasis on resettlement projects (including surveys ofpublicjlande and the building of roads); (3) increased production for commercial purposes of minor crops, such as various fibers, coffee, peanuts, and citrus fruits; (4) expansion of the livestock-improve ment program of the Bureau of Anima] Husbandry; (5) greater utilization of water resources for power and irrigation; (6) a cautious mechanization of agriculture; and (7) specific recommendations for educational, research, and extension work in the field of agriculture. year projects expenditures of over P25O,OOO,OOO. Using the present sources of government revenue as a basis for estimation of expectable income, we can count on only about ?40,000,000 for the coming fiscal year. . . We have little prospect of a balanced budget for years to come. And these figures are cited without including public works, irrigation, and the many projects we must undertake to reconstruct our shattered land and provide for the care and protection of those of our population who today are suffering most acutely from the after-effects of war.” He then spoke of the over-expansion of the monetary circulation of over P800,000,000, as compared to the P200,000,000 before the war, of the prices “beyond reason”, and of the mere “pittance” of the national production. “Where we exported annually before the war P240.000.000 of goods, we may, with good fortune, expect to export P30.000.000 worth of goods this year. Our imports this year will exceed P300,000,000, several times what we imported before. The savings of our people and the windfall of money brought us by the liberation forces are rapidly disappearing.” The most obvious remedy for this, he said, was to resume production and increase exports,—“but our pro ductive forces have been pitifully destroyed.” He pointed to the destruction of transportation and communication facilities, and of the roads and bridges and railroads, to the lost sugar centrals and coconut oil mills, the burned saw-mills and the flooded mines, the ruined abaca fields and other plantations, the lack of work animals, the strong possibility of famine, the lack of housing and the squalor in the cities, the great pests,—rats, mosquitoes, and locusts, and the constant threat of epidemics, the violence and terror in central Luzon and parts of Mindanao, the grow ing unemployment with the thousands being discharged from American army and navy establishments. “The major factors in our economic recovery”, he declared, “are the Trade Rehabilitation (Bell) and the War Damage (Tydings) Acts, recently enacted by the United States Congress.” He said that these required implemen tation by the Philippine Congress and that he would shortly send the Philippine Congress a special message on the subject. He spoke of his recent visit to Washington and of his having asked the American Government for a loan of ap proximately P800,000,000 to be released in five annual instalments of P200,000,000, and of having asked the U. S. Export-Import Bank for a rehabilitation loan of P500,000,000 to be expended in self-liquidating projects. He also reported on his discussions in Washington with respect to veterans problems, the redemption of guerrilla currency, alien property, war damages, shipping needs, etc., saying that special legislation would be necessary in all these matters. He emphasized the need of increased taxation, saying that the existing income tax was “entirely inadequate in the light of national need and the emergency situation.” “Taxes must be raised,” he said, “to reasonable levels, [though] without discouraging enterprise or business ex pansion. . . Taxes must be realistically adjusted to the inflation which holds us in its grip.” He spoke of the necessary rehabilitation of the banks, insurance companies, building and loan associations, and credit cooperatives. Then he made the statement: “When we obtain the loan from the U. S. Export-Import Bank, I will propose that we organize in the Philippines the Philippine Rehabili tation Finance Corporation, to make loans on a sound, self-liquidating business basis.” Next he made the statement that he would ask funds for the expenses of a commission to make a study of “water power development all over the country”; also, he added, of commissions to study the educational system, the land and the landlord-tenant problems, and the congestion in the Port of Manila. Here was advance notice of two of the most important developments either carried out or begun during the Roxas Administration,—the establishment of the Rehabilitation Finance Corporation and the undertaking of a great pro gram of hydro-electric development. 224 Notice of a third, and far less happy proposal followed almost immediately in his declaration as to the need of government economic controls, although he confined them, at the time of speaking, to price and rent controls: "It may seem to some [he said] that we in the Philippines are about to encumber ourselves with controls and irksome regulations while other peoples of the world are discarding them. But we are just begin ning to fight our war against destruction and prostration." There was yet another foreshadowing in the next section of the address. He said that the rebuilding of in dustries and enterprises destroyed by the war was only “half our goal”. “We must,” he said: “also plan and work in terms of broadening our economy, of ‘securing wider and wider participation in our business and industry of greater and greater numbers of individuals.. . Our answer to this, of course, is small business. Small business is one of the bulwarks of democracy. Small factories, small shops, small processing plants attracting the ingenuity of individuals and the enterprise of small groups are econo mically essential and socially desirable." He then spoke of the restoration of law and order and said he would propose the establishment of a State Police, either under the Department of the Interior or under the Office of the President. He would also ask, he said, for the strengthening of the Division of Investigation of the Department of Justice, the function of which would be “to apprehend violators of national laws and to guard against bribery, corruption, and graft in the Government.” With respect to his plans for the Army, he said he favored “a small, compact, professional group” a standing army of around 12,000 men, for which at least 5,000 reserve officers would be trained annually. The State Police would be a reserve in this army. He also planned an offshore patrol which would operate under the jurisdiction of the Philippine Army but which would in the future constitute a separate service as a nucleus for a navy. Its immediate duties would be to prevent smuggling and illegal entry, to cooperate with the merchant marine, and to maintain maritime services. He said the ships for the patrol would be obtained .from the U. S. Navy and he spoke of a bill pending in the United States Congress authorizing the U. S. Army and Navy to cooperate with the Philippines in training personnel and to transfer needed ships, aircraft, arms, equipment, stores, and supplies. He expressed con fidence in the passage of the bill and said, “We could not maintain an Army or an offshore patrol without it.” He proposed a study of ways and means to establish in the Philippines a “free port zone”— “so that it may become a transit point for goods flowing from the West ern Hemisphere, the assembly area for heavy machinery, equipment, and motor vehicles, the site of oil refineries for export petroleum pro ducts, and the distribution and warehousing center for goods destined for all parts of the Orient. Future developments might include ship yards and ship repair facilities for the vessels of the Far East.” He also advocated the establishment of an Air Trans port Authority and a Communications Authority, as he considered— “harmful to the public interests the present practice of Congress of retaining authority to issue licenses and franchises for radio broad casting stations, air lines, and some public utilities.” He said that an agrarian commission would be estab lished to study the economic problems in the areas of po pular unrest. The laws against usury would be strictly enforced. “We must import farm implements and make pro vision for their distribution and use.” He suggested the organization of cooperatives which would make farmtractors available to groups of farmers. He pointed to the need of importing new livestock and poultry of varieties suited to the country and said that credit and technical assistance should be provided for the development of new commodity crops, such as ramie, peanuts, soya beans, and cotton. To further increase the food supply, he said that meas ures must be taken to stimulate the fishing industry and that the United States Government had already “voted us technical assistance and training facilities for deep-sea fishing.” He then mentioned water-power development again in connection with fertilizers, saying'— “To decrease the cost of fertilizers, we must establish fertilizing plants. . . These may be established in conjunction with water-power sites. I have already listed water-power development as a subject to which we must give intensive study.” As to labor, earlier in his address, in connection with his statements regarding price controls, he had said that wages should be increased. Now he said: “Labor must be given every protection in its right to organize. The powers of our Court of Industrial Relations must be revised. While we encourage and strengthen organized labor, we must make ample provision to insure the responsibility of labor and labor unions.” The address was a long one, running to 53 printed pages and contained much other material worthy of notice today, but the foregoing covers the main points of special interest from the business point of view. In closing, he recommended the erection of a memorial to the United States,— “in recognition of the 48 years of our historic relationship and in re cognition of the greatness of mind and heart of the American people who have done and are continuing to do so much to make our national existence possible.” Special Message to Congress on Acceptance of the Trade Agreement.—In his first state of the nation ad dress, just summarized, Roxas referred to a special message he planned to send to Congress. This message was delivered on June 21, 1946, a week or two before the establishment of independence, and urged approval of the Executive Agreement which he was to enter into with the President of the United States on that date in conformance with the terms of the two Acts of the United States Congress already so frequently referred to,—the Bell Trade Act and the Tydings War Damage Act. This special message is of special interest at the time of this writing, when a revision of the Philippine-American trade agreement is being sought in favor of a scheme of so-called “selective free trade”. President Roxas began by saying that those two Acts— “provide the pattern of United States aid for our reconstruction and for the rehabilitation of our national economy. Without this assistance we are faced immediately by disaster. Without the helping hand thus extended to us, I do not believe we can survive. . . “That nation which is about to grant us our freedom has also tendered to us the means of solving our economic problems, a protected place in the American market for 28 years and funds to help us rebuild our shattered land. Such are the purposes of the Trade Act and the War Damage Act. I am directing your attention today largely to the Trade Act which grants us the protection of American trade preferences. The American Congress, in order to provide these trade preferences, had to cut across all the protective features of American tariff law. These preferences are being offered exclusively to the Philippines. A new and unprecedented legal formula had to be devised.. . “This Congress has never been asked to deliberate upon a more vital matter. . . “The Trade Act and some of its provisions have been under violent attack in some parts of the press and in some public circles during the past two months. I would like to be able to say that public discussion has been in progress. I am afraid I can not describe what has been going on as discussion. There have been appeals to passion and pre judices. There have been misrepresentations and misstatements of fact. Some political leaders have been willing to make capital out of a question which should be above politics. . .” President Roxas then reviewed the history of these two pieces of legislation, stating that after months of deli beration it “required no less than the personal intervention of President Truman to effect a reconciliation of many viewpoints and interests and that there had been at least five entire revisions.” He traced the development and purpose of what has since come to be called the “parity provision” and said that if he had been in Washington at the time he would have suggested other means than amend ing the Constitution to accomplish the same objective, but that he had no fear whatever that the granting to 225 American citizens of rights equal to those of the Filipinos in the development of the natural resources would bring about an “imperialistic exploitation of our country.” “This was not the intention of Congress. I am certain it will not happen”. He then pointed out that the provision in the Philippine Constitution protecting the national resources from exploitation was not of Filipino but American origin, and traced this back to the first so-called “Philippine Bill” passed by the U. S. Congress in 1902. “To suspect the American Congress of conspiring to open the flood-gates to an imperialistic deluge, is to deny every fact we know”. As to the real intent, he said: “The Congressional intent was simply to invite and encourage American capital to invest in the Philippines and aid in our rehabilita tion. The equal rights provision was not designed as a protection for American interests already here; it is intended to reassure potential investors that the Philippines is a safe area for enterprise, safe against discrimination for the next 28 years. Every responsible Filipino leader I know desires American capital enterprise and know-how to partici pate actively in our reconstruction. Our rehabilitation would be im possible without such assistance. . . I refuse to be frightened by the ghost of imperialism. Americans have had equal rights—potentially more than equal rights, for 48 years in the Philippines. America could have made the Philippines a Belgian Congo. . .” As to the “pegging of the peso to the dollar”, as “an infringement upon our sovereignty and free choice,” he said that the peso had already been pegged to the dollar in the Bretton Woods International Monetary Agreement, duly ratified by the Philippine Senate. “In a world searching for security, the stability of monetary values is an economic essential. We can not expect to retain the freedom to raise or lower the value of our peso and retain the confidence of traders in other parts of the world. As far as pegging the peso to the dollar is concerned, the dollar is the standard value for all world currencies today. By connecting our peso with the American dollar, we stand within the magic and charmed circle of standard value, the dollar area, to which all currencies are being attracted today. This provision re quires us to do something which it is to our own unquestioned interest to do.” As to the absolute quotas set for certain Philippine exports to the United States, he said that that was no discri mination. Th^y were the same as before the war, except in the case of cigars the quota for which was increased. The fixed quotas, he said, were indeed “a source of considerable advantage to us”, because thus— “we are automatically forced, after our production reaches quota limits, to diversify in other non-quota fields.. . A second advantage lies in the 28-year insurance of these quotas.. . No other country has such an assurance. In the case of sugar, all producing areas including those inside continental United States are under quota, but none of these areas has a quota-assurance for a period longer than 2 years. In the Philippines we are given a 28-year guarantee, a guarantee which super sedes any sugar act which Congress might pass in the future. The same is true of cordage.” As for the fact that no quotas were set on United States exports to the Philippines, he said: “For the time being we desire none. We want as many imports as we can possibly get. If, during the course of the 28 years of the Agree ment, we find any Philippine industry threatened by imports from America, we are free, in my judgment, to establish quotas on those imports or devise other means of protecting our infant industries. I find nothing unreciprocal about this provision.” The President also discussed the tie-up between the Trade Act and the War Damage Act, stating that to con sider this “as a club to require our acceptance of the Bell Act” was “completely baseless.” Actually, he said, only a part of the war damage payments were associated with the "Executive Agreement. “It was not the intention of Congress to make these payments a bribe to induce our acceptance of the Trade Act because Congress well knew the war damage money is but a fraction of the capital we require. The Bell Act provisions and the subsequent encouragement of trade and productive enterprise are in themselves intended as an inducement and as a lure for capital investment here. Without that investment we are lost.” He pointed out that if his own, the majority party, were to be actuated by partisan considerations, it might oppose this legislation. “We are not responsible for it,” he said. “We had nothing to do with its formulation or pas sage. But we do not intend to take a partisan attitude to ward a question which involves our national existence. . . I sincerely believe we have only one choice, and that is to accept it. . . The basic blueprint of our economic recovery is here. . .” The Bill “to accept the Executive Agreement” easily passed both houses of Congress and became Commonwealth Act No. 733, approved July 3, 1946. The Second “State-ofthe-Nation” Address.— Eight months later, on January 27, 1947, Roxas could report to Congress that— "this nation. . . is moving courageously and confidently forward on the road to national health. We are well into a period of progress. The clouds of gloom which hovered over us eight months ago have dissipated. Hope and resolution have replaced despair and doubt; plan and pro gram has come forward in place of distraction and aimlessness; our economy is taking shape; peace and order have returned; employment is gradually increasing; business prospers; our exports are mounting daily; assistance of many kinds from the United States has come, and more is on the way.” In this address he reported on the creation of the Rehabilitation Finance Corporation, which had started operations earlier that same month. He said of it: “The Rehabilitation Finance Corporation set up under the au thority of the last session of Congress is now functioning, with a capital ization consisting of the resources of the Agricultural and Industrial Bank [which it replaced], the P15,000,000 fund of the Financial Reha bilitation Board, the proceeds of the sales of surplus property, and the P50,000,000 recently transferred from the Exchange Standard Fund. The capitalization will be gradually increased until the full authorized capital of ?300,000,000 is covered. The RFC will also issue small amounts of bonds during the coming year. The machinery of the RFC is being carefully set up to safeguard the loans to be made. The nation is depending heavily upon this organization to provide credit for vast numbers of essential rehabilitation projects and undertakings.” He also referred to the instructions given the National Power Corporation “to expedite its surveys of power pro jects and its submission of such projects as will be evidently self-liquidating.” The Third “State-of-the Nation” Address.—A year later, in his third state of the nation address, delivered on January 26, 1948, three months before his death, he was able to report further progress: “The great strides toward social and economic reconstruction we have made can not be doubted. . . I am glad to report the crisis has passed, and that our program of rehabilitation is far advanced. Conditions among our people have been ameliorated. There is relative prosperity in our land.” In this message he stated that he was recommending legislation to establish the Central Bank of the Philippines. He said: “I ask Congress to give preferential attention to the creation of the Central Bank. This measure would strengthen our banking system and provide resiliency to our monetary system without in any way affecting its stability. With the reform contemplated in our monetary system, as a result of the creation of the Central Bank, I expect some funds will become available to finance our industrial program, the construction of irrigation systems, and other aids to agriculture and industry which are urgently needed to accelerate the economic deve lopment of our nation.” It was also in this message that he asked Congress to adopt legislation granting the President authority to control imports and to adjust taxes on luxuries. He said that he asked,— “under such conditions as Congress may impose, authority to control imports and to increase or decrease from time to time the sales tax on luxuries, semi-luxuries, and non-essential commodities up to 100% of the present rates, but in no case to be less than the rates now imposed. This m :’ure is intended to raise revenue, conserve our dollar exchange resources, and to channel surplus purchasing power toward productive investment.” He again referred to the power projects, asking for legislation— “appropriating the proceeds of certain loans which the Government may obtain, to finance the construction of specific hydro-electric power projects, and a fertilizer plant.” He closed his address by declaring: “We are still far from our chosen goals. But we are decidedly on our way. I assure you we are treading on firm ground and marching 226 in the right direction. We are following paths which the experience of nations has proved to be safe and reliable. We are. attempting no short-cuts. We are developing our national economy in the hard but surest way. We must not allow ourselves to be distracted by the allur ing promises of new and strange ideologies or the radical theories of neo-economists. We can not afford to make mistakes. We would pay for them dearly in tears and toil.. .” The Gigantic Task.—Roxas faced a gigantic task. It is true that reconstruction was rapidly proceeding inde pendent of government through the labor and enterprise of the people themselves; in an earlier section of this history, the rehabilitation of the various public utilities was re viewed. It is true also that Osmena had already affected a general reestablishment of government organization. But Roxas had to deal not only with the tremendous diffi culties of the aftermath of war, but with the problems incident to the beginning of a new administration under a newly victorious party, and, more than that, the problems of a newly independent nation. The “Huk’’ Movement.—The situation of the Govern ment versus the so-called Hukbalahaps during his Ad ministration never reached the degree of seriousness it did later. It took several years before the nature of the Huk movement was fully developed, and almost as long for it to be understood. In his first state-of-the-nation address, Roxas referred to peace and order only in general terms, saying that it was estimated that over 300,000 fire-arms were illegally held in the country and that it was in those areas were social and economic injustice was acute that there had been a harvest of violence. He said he would establish an agrarian commission to study these problems especially in those areas where unrest prevailed. He would not permit “for one unnecessary moment the defiance of law or the imposition of terror.” In his second address, delivered in January, 1947, he stated that some 160,000 fire-arms had been surrendered or confiscated, and that “complete peace and order” had been reestablished throughout the Philippines, except ip a few limited areas in Central Luzon. He had recognized by this time,'however, that— "eight months ago there were areas in this country where the equivalent of anarchy reigned. .. groups called Hukbalahaps and PKM’s [a peas ant organization] were usurping the authority of the Government with terror and violence as their instrument. . . There is no reason to call these groups by the name of Hukbalahaps [People’s Anti-Japanese Army,—the old guerrilla designation]. They are not the people’s army against the Japanese; they are not a guerrilla force; they have no unify ing idea or purpose, except murder and plunder. They are law-breakers of the most vicious kind. . .” Only in his third state-of-the-nation address, delivered in January, 1948, was the true nature of the Huk organiza tion defined. Roxas now admitted that at the beginning of his Administration, “lawlessness and widespread crim inality prevailed in practically every province and section of the country,” although he claimed that “today, peace and order exists in 90% of the country”. He said that by this time, 200,000 fire-arms had been surrendered or cap tured. More significantly, he went on to say: “In a few sections of Central and Southern Luzon, roving bands of bandits and Communist-led groups who have defied the Government still remain, but their activities are now confined to distant barrios. Our peace officers, principally the Constabulary, are giving them neither rest nor quarter. The efforts to apprehend them will be intensified. We .can no longer compromise with these men. . . They are using force. We have to meet them with force. They are not fighting for social reforms. Their most important demands have already been met. Now we know their aim is one and definite,—to gain power through force. . . Their loyalty is not to the Philippines. Their ambition is not to pro mote the interests of a social group. That is camouflage, for the tenants whose interests they claim to defend are the very victims of their depre dations and atrocities. The pattern of their operations is too familiar to deceive any one. It is the same pattern used in other countries by groups boring from within to undermine democratic institutions. Their methods are to create social disorder, confusion, and chaos, to obstruct national progress, to produce shortages of food and other necessities, to foster widespread discontent, and to drive the people to a state of desperation. . . We must look upon them as the enemies of our nation. We must deal with them as such We shall endeavor with all the means at our command to bring them to justice and wipe out to the last vestige every attempt to overthrow our free institutions or disturb the peace of our land.” By 1948, the problem, therefore, was understood by the Administration, although Roxas’ successor, President Quirino, made one more effort at treating with the Huks before an all-out campaign was opened against them by the Army,—a campaign which even today, in 1953, had not yet been definitely concluded. The Delayed Amnesty Proclamation.—Roxas, like Osmena, was still unable to call upon the services of some of the ablest of the country’s public servants,—the nume rous former officials who were under charges of collabora tion with the enemy. The feeling, especially in high Amer ican quarters, was such that Roxas, much as he wanted to clear these men, could only play for time. It was notuntil a year and a half after he took office and only a few months before he died that, on January 28, 1948, while the trials of Laurel, Recto, and others of prominence were still pending, he issued his long-awaited Amnesty Proclama tion in which he stated, in part: “It appears that the overwhelming sentiment of the people of this Republic is now in favor of resolving this question as speedily as possible by the grant of amnesty. . . Therefore, by virtue of the power vested in me by Article VII, section 10(6) of the Constitution, I do hereby proclaim and grant full and complete amnesty to all persons accused of any offense against the national security for acts allegedly committed to give aid and comfort to the enemy during the last war; provided, however, that this amnesty shall not extend to persons who are now or may hereafter be accused of treason for having taken up arms against the allied nations or the members of the resistance movement, for having voluntarily acted as spies or informers of the enemy, or for having committed murder, arson, coercion, robbery, physical injuries, or any other crime against person or property, for the purpose of aiding and abetting the enemy in the war against the allied nations or in the suppression of the resistance movement in the Philippines. All cases now pending before the courts for alleged offenses coming within the terms of the amnesty herein granted shall be dismissed by the respec tive courts on their own motion or upon petition by the prosecution or the accused.” The proclamation was “to take effect upon the con currence therewith by the Congress”, and Congress was quick to declare this concurrence. Relations with the United States and Foreign Countries.—Much of the burden of the conduct of foreign affairs2 was taken from Roxas’ shoulders by Vice-President Quirino as Secretary of Foreign Affairs, and in this matter, too, the goodwill and assistance of U. S. Ambassador Mc Nutt, and, after him, of Ambassador Emmet O’Neal, were of great value. Mr. McNutt resigned on May 8, 1947, and President Truman appointed Mr. O’Neal as his successor that same month, but the new Ambassador did not reach Manila until September. ^During the period of the Japanese occupation of the Philippines and, there fore, for a number of years before the establishment of the Philippine Republic, inaugurated July 4, 1946. the Philippine Government in Washington was accorded a status virtually similar to that of an independent nation. President Quezon, and then Vice-President Osmena, attended meetings of the Pacitic War Council, and the Philippines was signatory, with thirty-one other nations, to the Declara tion of the United Nations in January 1, 1942 (the Philippines signed later after the arrival of the Quezon-Osmena party from Corregidor and Australia). The Philippine Government took part in the organization of the United Nations Relief and Rehabilitation Administration (UNRRA) in 1943. It was also represented at the Bretton Woods Conference in 1944 where plans were drawn up for the or ganization of the International Bank of Reconstruction and Development and of the International Monetary Fund. An act providing for Philippine participation in both the Bank and the Fund was passed by the Philippine Congress, approved by President Osmefia on October IS, 194S, and approved by the President of the United States on November 20, public notice of this being igiven in a proclamation by President Osmefia dated December 4. While the war against Japan was still in progress, the United Nations Conference on International Organization was held in San Francisco from April 25 to June 28, 1945, and the representatives of fifty nations, including the Philippines, there drafted the Charter of a world organ ization to replace the old League of Nations. It was a matter of pride in the Philip pines that during the consideration of the proposal of trusteeship for dependent peoples,—in place of the League “mandate" system, the Philippine delegation assumed leadership in the advocacy of independence as the goal to which the as pirations of the people placed under trusteeship should lead. The Charter was ratified in due time by all the nations concerned,—the instrument of ratification by the Philippine Senate being signed by Osmena on August 30 and deposited with the U. S. Department of State on October 11. 1945 A Philippine delegation at tended the meeting of the Preparatory Commission of the United Nations Organ ization held in London from November 25 to December 15, and three Philippine delegates took part in the important first meeting of the General Assembly in Lon don during January and February, 1946. The Philippine Government was repre sented also both on the Far Eastern Advisory Commission, organized in October, 1945, and on the Far Eastern Commission which replaced it in December. All thia was before the independence of the Philippines had been formally proclaimed and reflected the American determination to establish an international personality for its ward, the Philippines, well in advance of its formal independence. 13. It 227 As early as July, 1945, a year before independence, the U. S. State Department, in anticipation of the time when the Philippines would have to conduct its own foreign relations, started the Philippine Foreign Affairs Training Program under which several score of selected Filipinos were assigned to the Department of State and, in some cases, to American embassies abroad, for training. The Executive Agreement to carry out the terms of the U. S. Philippine Trade Act, was signed on July 4, as was also the Treaty of General Relations with the United States. The signing of various other agreements relating to abaca, copra and coconut oil, air transport, public works, —roads, ports, fishery rehabilitation, coast and geodetic survey, surplus property, etc., were signed during the en suing year. The very important military Bases Agreement, signed March 14, 1947, grants the United States Armed Forces a 99-year occupation of a number of strategic bases in the Philippines in consonance with the reciprocal require ments of both countries for the common defense and secu rity. The Military Assistance Pact, signed a week later, on March 20, guarantees the provision of materiel and sup plies for the Philippine Armed Forces and provides for an American military advisory group in the Philippines. Treaties of amity and friendship were concluded between the Philippines and China, France, Italy, Spain, etc., and agreements were also arrived at for reciprocal landing rights for Philippine airline companies in the United States and a number of other foreign countries. Disconcertingly enough, in view of the special rela tions between the Philippines and the United States and the vast American aid extended, a formal “Treaty of Friend ship, Commerce, and Navigation” was not concluded be tween them,—either during Roxas’ Administration or since, although such a treaty has been under negotiation since 1946. Generally, this is no more than a pro forma docu ment granting each nation reciprocal “most preferential nation” treatment, but at this the Philippine negotiators appear to have balked.3 s A treaty of friendship, commerce, and navigation is basically a commercial treaty, providing for a ^reciprocal protection of the rights of the citizens of each of the two parties to the treaty in the other's country; it provides, especially, for a code of fair treatment for the businessmen of the one country in the other. The United States at the present time has twenty-seven of such treaties with different countries, but not, as yet, with the Republic of the Philippines. The Surplus Property^—The U. S. State Depart ment’s Office of the Foreign Liquidation Commissioner was made responsible for carrying out the provisions of the Tydings Rehabilitation Act with respect to the surplus army property to be turned over to the Philippines to amount to “not to exceed $100,000,000 in fair value.” The cost value of the surplus goods and supplies in the Pacific-China area amounted to some $3,000,000,000, of which over a third was in the Philippines. The Manila Office of the Foreign Liquidation Commissioner was opened on November 1, 1945, and at the beginning most of the goods were sold, the largest single customers being UNRRA (United Nations Relief and Rehabilitation Administra tion), the U. S. Commercial Company, an agency of the United States Government, and the Philippine Govern ment. Individual sales were also made, including sales to the Philippine Chamber of Commerce Syndicate. Most of these goods went into the Philippine market, but the Governments of the Netherlands Indies and French Indo China also bought considerable amounts. After nine months, the United States Government, as the “largest merchan diser in Philippine history”, closed shop. On September 11, 1946, in the “largest single transaction in the history of the. country”, the entire remaining bulk of the goods was disposed of to the Philippine Government to fulfill the pending obligations under the Tydings Act and other legislation. The procurement value of the goods thus turned over was estimated at over $1,121,400,000. The “fair valuation” was set as P274,000,000 and there was an additional P50,000,000 in cash, for which, however, the Philippines assumed certain obligations with respect to the redemption of Philippine emergency and guerrilla currency, etc. A little over a month later, on November 18, President Roxas appointed a Surplus Property Com mission composed of Placido L. Mapa, Arsenio N. Luz, and Gabriel K. Hernandez.4 This, indeed, was the biggest windfall in Philippine history, but the difficulties which the Commission met with in disposing of the property and in safe-guarding it meanwhile proved beyond its powers. Many of the goods were war-goods and not adaptable to peace-time use, much of the stock was subject to spoilage, much of it, piled up in the open, uninventoried, could not be protected against even wholesale theft, and corruption also entered into the disposal transactions. Great as was the gift, its manage ment proved to be the Achilles’ heel of the Roxas Adminis tration,—as the import control machinery has proved to be under the Quirino Administration. Mr. Pio Pedrosa said only recently (Commencement Address, University of the Philippines, April 14, 1953): "The old charge of corruption and graft that with a good deal of justification hounded the administration of surplus property after the Liberation, broke loose once more in the implementation of the [import) controls.” American Government Agencies Active in the Philippines.—Brief histories of some of the United States Government agencies established in the Philippines after the Liberation, and both before and after independence, have already been given in earlier instalments of this his tory (Journal issues for March and April). By the middle of 1947, they included besides the Embassy and the Con sulate and the U. S. Information Service which operate as integral parts of the Embassy, the following Armed Forces entities,—the U. S. Army, the U. S. Air Force, the U. S. Corps of Engineers, the U. S. Navy, the U. S. Coast Guard, and the U. S. Military Advisory Group. The rehabilitation agencies which operated under the general supervision of the American Embassy were: the Civil Aeronautics Administration (U.S. Department of Commerce); the Coast and Geodetic Survey (U.S. Depart ment of Commerce); the Corps of Engineers, in respect to the rehabilitation of ports and harbors; the Fish and Wild Life Service (U.S. Department of the Interior), the Maritime Commission, in respect to the rehabilitation of inter-island commerce; the Public Health Service (U.S. Social Security Administration); the Public Roads Ad ministration (U. S. Federal Works Agency); the War Dam age Commission; qnd the Weather Bureau (U.S. Depart ment of Commerce). The establishments which operated under specific statutory provisions were the Employees Compensation Commission; the Foreign Liquidation Commission (U.S. Department of State); the Maritime Commission, also a rehabilitation agency; the Philippine Alien Property Ad ministration; the U. S. Commercial Company (U.S. Re construction Finance Commission); the Veterans Adminis tration; and the War Damage Commission, also a rehabi litation agency. *In January, 1948, Mr. Mapa having been appointed Secretary of Commerce and Industry, the membership of the Commission was changed, Mr. Luz becoming Chairman and Jose E. Romero being appointed a member. As of April 30, 1948 (IS days after the death of Roxas), the sales of the Commission amounted to >32,206,610.58 and issues to government entities on memo randum receipt to >8,075,995.75, or a total of >40,282,606.33. Later in 1948, in September, Jose C. Zulueta was appointed Chairman of the Commission, vice Mr. Luz, and in October Mr. Hernandez was relieved by Angel Llanes. The following year, in September, Mr. Romero resigned to become Minister to Great Britain. The Commission was abolished by President Quirino that same month. From May 1, 1948, to September 30, 1949, the date the Commission was abol ished, the sales amounted to >13,232,961,71 and the issues to government entities to >19,944,640.04, or a total of >33,177,601,75. This made a grand total of >73.460,208.08. Liquidation was undertaken by the Surplus Property Liquidating Commis sion, created by an executive order, this entity being succeeded on December 1, 1950, by the Board of Liquidators, Surplus Property Unit. This Board is also in charge of liquidating the following government entities.—National Coconut Cor poration, National Abaca and Other Fibers Corporation, National Tobacco Cor poration, National Food Products Corporation, Shipping Administration, and former enemy-owned or controlled corporations or associations. 228 Together all these agencies and their personnel con stituted the largest foreign establishment of the United States in the world, far exceeding the American establish ment here before the war. Most of them were here to assist in Philippine rehabilitation. As stated in a previous section, the War Damage Commission opened its offices in Manila toward the end of 1946, but public proper-claim payments did not begin until the latter half of 1947 and private claim payments not until April, 1948, a month or two after Roxas’ death. But work by the various American rehabilitation agencies got under way much before that. The Report of the Joint. Philippine-American Finance Commission.—The three reports, to which reference has already been made and upon the recommen dations of which various important legislative enactments were based, should now be briefly reviewed. The first, in point of time of publication (June 7, 1947), was that of the Joint Philippine-American Finance Com mission, which was composed of three American and three Filipino members,—Edgar G. Crossman, with the personal rank of Minister, was Chairman of the American section, and Secretary of Finance Miguel Cuademo was Chairman of,the Philippine section. The other members were Arthur W. Stuart, of the U. S. Treasury Department, and John Exter, of the Board of Governors of the Federal Reserve System, in the American section, and Commissioner of the Budget Pio Pedrosa and Philippine National Bank Pres ident Vicente Carmona, in the Philippine section. There were sizeable staffs in both sections, all exclusively govern mental. In May, 1946, President Roxas had requested sub stantial budgetary and rehabilitation loans from the Amer ican Government and a few months later the U. S. Congress passed a joint resolution authorizing the U.S. Reconstruc tion Finance Corporation to lend or extend credit to the Philippine Government in an amount or amounts not to exceed $75,000,000 on or before July 1, 1947. In Septem ber, the two'Governments agreed upon the formation of a joint finance commission to consider the financial and budge tary problems of the Philippine Government and to make recommendations thereon to the two Governments with respect to taxes, budget, public debt, currency and banking reform, exchange and trade problems, and reconstruction and development. This, it is to be noted, was quite an order! The members of the Commission were appointed by the two Governments in December and the American members and their staff of technical advisers arrived in Manila on January 16, 1947. Some two months were devoted mostly to fact-finding and some two and a half months to discussions. The 156-page Report, submitted both to the President of the United States and the President of the Philippines, recommended increases in corporate income taxes from the current 12% to 18%, but no increase, for the time being, in private income taxes; a very heavy increase in the per centage taxes on ‘'luxuries”; material increases in gift and inheritance taxes, and a progressive increase in real prop erty taxes. It also recommended a domestic borrowing program, the securities to be offered to be ‘‘direct general obligations of the Philippine Government”, in which a ceritral bank “could assist materially”. The Commission’s main recommendation was the adoption of a managed monetary system in which mone tary authority and responsiblity would rest in a central bank. The automatic 100% reserve system would be abandoned and the money supply would be regulated to meet the internal needs of the economy. The Report also recommended that to protect the international reserve and to foster the development of local industry a system of quantitative limitation of imports be adopted under which (1) quarterly import quotas would be set in advance for particular goods or classes of goods; (b) bids would be invited for licenses to import all or portions of the quotas set; and (3) licenses would be sold upon the basis of the bids received in order to yield the maximum revenue to the Government. The Report was the work, on the one hand, of “New Deal” planners and bureaucrats from the United States, and, on the other, of Filipino officials fascinated by the governmental financial and economic manipulations en couraged by the Keynesian school of economics. It is true that a 100% currency reserve was not neces sary and that legislation could well have been adopted to make a part of this reserve available for loans, but the radical change from a relatively free banking system and a virtually automatic gold exchange currency standard, thesafest in the world, to a system of direct government control over both currency and credit,—such a change as came into effect a year or so later, on January, 1949, with the inauguration of the Central Bank of the Philippines, was a most revolutionary one and frought with continuing danger, as the Report itself implied: “By creating a central bank, the Philippine Government will create an institution with power to influence profoundly the course of the country’s economic development. With that power comes a tremen dous responsibility for both the Government and the bank’s manage ment. The success with which that responsibility is discharged will depend upon the men to whom it is entrusted. The essence of good central banking is good judgment.” It is a very risky system of any kind that must depend almost entirely on the good judgment of a few men. Nearly every country now, of course, has its central bank, and though in America the people twice succeeded in doing away with a central bank, aware of the danger of such institutions and the evils of government interference with banking, the U.S. Federal Reserve System is also a form of central banking. It is all a matter of the “statolatry” to which free enterprise even in the democratic countries has been giving way; governments generally want inflation and credit expansion, booms and easy money. It is to the credit of the management of the Central Bank of the Philippines that it has struggled to check in flation, with some, though far from complete success. The Report of the Joint Finance Commission was round ly criticised in Manila business circles, but, unfortunately, little of this was made public. More open criticism would probably have had but little effect. The Philippine Govern ment wanted a central bank and was bound to establish such a bank.5 So far, the Central Bank of the Philippines has been ably managed, but what is back of the currency today is not a metallic reserve. As “a liability of the Cen tral Bank”, the currency is “fully guaranteed by the Gov ernment of the Republic of the Philipines,” but this guarantee is good only so long as the finances of the Govern ment itself remain sound. Formerly, the circulation of the currency decreased as the foreign reserve was spent for imports, this acting as an automatic brake on excessive importing because, as the circulation decreased, money and credit became tighter, this naturally discouraging buying. This is no longer the case; instead we have arbi trary import and exchange controls and the constant threat of a rising inflation. 1 Commonwealth Act No. 458, approved June 9, 1939, provided for the estab lishment of a "Reserve Bank,” and another law creating a Central Bank was enacted in 1944 during the Japanese occupation. Neither law was put into effect. The Joint Finance Commission Report urged the Philippines well down the road to a government “planned” and “managed” economy, as opposed to the system of free enterprise. The Joint Finance Commission’s Report on Philippine Economic Development.—The Joint Finance 229 Commission also submitted a technical memorandum of 72 pages on “Philippine Economic Development,” prepared by Thomas Hibben, of the U. S.‘ Department of Commerce. It was prepared chiefly for the use of the Commission itself so that its recommendations with respect to banking and monetary policies “might be based on a careful consider ation of the underlying objectives of the Philippine economic policy as well as on a thorough understanding of the eco nomic environment in which those recommendations will have to be carried out.” This was quoted from the Fore word and so is the following: “The Commissioners themselves have not felt competent to pass on the detailed technical recommendations and conclusions set forth herein. Nevertheless, in their opinion, the memorandum does indicate, if broadly and tentatively construed, the direction and extent of desir able and possible economic development in the Philippines. Moreover, it brings together in one source a wealth of information, much of it never before made available to the public, concerning the economic life and organization of the Philippines. The Commission has therefore decided to publish it in printed form for the information of the business community, economists, and the various agencies and bureaus of. the Philippine Government.” The Report covered recommendations for the increased production of foodstuffs; increased production of non foodstuffs for consumption and export (including sulphuric acid, caustic soda, soda ash, hydrochloric acid, salt, dyna mite, chemical fertilizers, soap and toilet preparations, paints, pigments, and varnishes, starch, textiles, shoes and leather, paper and paper products, glass, ceramics and clay products, lumber and timber and forest products, small scale manufacture of miscellaneous products, petro leum and coal exploration, and iron and steel and metal products); expansion of Philippine exports (sugar, coconut products, tobacco and manufactures, abaca and other fiber production, ramie, and minerals); and increased output of services (power, transportation, and communica tions). The investments required to carry out the proposals suggested in the Hibben memorandum were estimated by him to total Pl,962,000,000, of which P722,000,000 would be spent for labor and domestic materials, and Pl,240,000,000 for imports of materials and equipment; an additional P215,000,000 would be required for freight and insurance. These expenditures were tentatively scheduled to be made over a period of years from 1947 to 1952, with P75,200,000 to be spent the first year. The Commission itself increased the total figure to over P2,000,000,000 over a 5-year period and stated that together with such construction as was not included in the program, the total capital requirement might reach P3,000,000,000. As to where this money was to come from, the Com mission’s Report stated: “The principal task of this Commission has been to seek ways and means by which the Philippine Government could raise the funds required, both for its budget and its rehabilitation and development program, from its own resources, and thus avoid saddling the new Government in its first years with a large foreign debt. . . The Com mission believes, however, that because of the favorable balance-ofpayments situation it is within the financial capacity of the Philippine economy as a whole to finance a program of approximately this mag nitude. Private enterprise should be encouraged to invest to the greatest extent possible. The program includes types of investment, however, which contain 'too great an element of risk for private enterprise or which for other reasons can more appropriately be undertaken by public-than by private capital. A major share of the burden may thus have to be borne by the Philippine Government. The funds for a sub stantial proportion of this total are already in sight, partly from private and partly from Government sources...” The Commission here referred to the coming war damage payments, the expected proceeds from the sale of surplus property, etc. Largely as a result of the work of the Commission, the Philippine Government was able in March, 1947, to sign a credit agreement with the U. S. Reconstruction Finance Corporation providing for the advance of the first $25,000,000 under the $75,000,000 Congressional loan authorization. In the light of subsequent developments, we now know, as many of the critics of the Report believed at the time, that the Commission’s views were far too optimistic. Interesting side-lights are thrown on these subsequent developments by the statement in the Report, with respect to import control, that “excessive profits can be made by those granted import licenses and charges of favoritism in the granting of licenses may be made.” However, the Commission was firmly convinced that “these evils can be ameliorated by the procedure foutlined].” The Report also stated, with respect to exchange controls: “The Commission does not recommend the imposition of controls over foreign exchange transactions. It is of the opinion that the Philip pines should experience a net inward flow of capital over the next few years, and that conditions in the Islands will not give rise to a flight of capital.. .” This could have proved true had the general policies followed by the Government been sounder than they turned out to be, and the various controls had not been used in such a way as to discriminate against foreign capital, thus frightening off further investment. The Beyster Report.—The second of the three im portant reports of the period was what was generally re ferred to as the Beyster Report, dated June 24, 1947, and entitled “Proposed Program for Industrial Rehabilitation and Development of the Republic of the Philippines.” According to the title page, it was “Prepared by the Tech nical Staff of the National Development Company under the Supervision of the H. E. Beyster Corporation, Con sulting Engineers, Detroit, Michigan.” A second, “checked and revised” edition of the Report was published in October and ran to over 300 large-sized pages. It covered much the same ground as the Hibben memorandum but in an even more expansive manner. Editorial comment on this Report and also on the Joint Finance Commission Report, published in the Oc tober, 1947, American Chamber of Commerce Journal, was as follows, in part: “Whatever may be thought of the various proposals and recom mendations made, it is felt that the Government is to be commended for having had these studies undertaken at this time, which it is real ized is highly critical with respect to the future economic development of the country. “Both reports deal with matters which are recognized to be of vital importance in that development, and it is good to have the results of the studies brought before the public in eminently readable form. “The broad objectives proposed are generally endorsed, but, in the case of the finance report, it is felt that the approach should have been more cautious, and, in the case of the industrial report, more within the bounds of the practically possible. “Proposals are made which, in the finance report, are considered too drastic, and, in the industrial report, too all-inclusive and undis criminating. “Both reports are, nevertheless, very valuable as suggesting pos sible general courses of action, though most of the specific recommenda tions made are thought to require much further study before the great risks involved are assumed; this is true especially with reference to the country’s currency structure, the institution of an artificial and arbitrary control of trade, and the investment of huge sums of money in far too numerous and wholly untried industrial-plant developments.” The Westinghouse Electric Power Program Re port,—The third report of the period was that entitled “Electric Power Program for the Republic of the Philip pines”, prepared by the Westinghouse Electric Interna tional Company, printed in New York for restricted circu lation in December, 1947. It was never released for publica tion, and the present summary is probably the first to appear in public print. A letter contract, dated March 10, 1947, addressed to the Company and signed by Emilio Abello, Chief of the Executive Office, by authority of President Roxas, was accepted and signed by the Company on March 20, 1947. It provided that the Company would hot only pre pare the plans and other information for an island-wide 230 power building program, but also the necessary documents for the presentation of a loan application to raise funds for its execution to the U. S. Export-Import Bank. If the program was agreed upon and the loan application ap proved, the Government would place an order with the Company for the equipment required, the Government, however, retaining the right to place orders for equipment of equal specifications with other suppliers if it were found that the Company’s prices were higher. Immediately after this, Robert Russel, Project Deve lopment Manager of the Company, was placed in active charge, and under him the services of engineers from the Ebasco Services, Inc., the Morrison-Knudsen Company, and the Baldwin Locomotive Works were also obtained, Filemon C. Rodriguez, Manager of the National Power Corporation (established in 1936), was appointed by the Government to represent it in the undertaking. According to the Report: “With him [Mr. Rodriguez) came not only his unmatched .exper ience and knowledge of the Islands, but also a wealth of data, preli minary and developed, which had been accumulated by Mr. Rodriguez and his engineers over the last ten years.” Some of the data came from old U. S. Army and Bureau of Public Works surveys and reports. The Westinghouse Report recapitulated Section X of the Joint Finance Commission’s Report and stated that in general the conclusions reached by the Power Com mission coincided with those of the Finance Commission with respect to electric power development. As originally submitted, the Report embodied an Island-wide, 22-year power-development program, ending in 1960, which, if fully carried out, would bring the in stalled capacity to nearly 1,200,000 KW, from a level of only around 48,000 KW in 1947. The annual energy avail ability would be brought to over 6,000,000,000 KWH,— from 300,000,000 KWH in 1947. The total cost of the five projects to be undertaken during the initial stage was estimated at $88,519,000, and it was believed that these projects would not only be self-liquidating over a period Total estimated cost (2).. . Gross annual operating inof 30 years, but would be capable of producing an annual surplus. The Report took up in detail the following initial projects, proposed to be undertaken during the first five years: the Ambuklao (75,000 KW) and Itogon (later changed to Binga, 100,000 KW) projects on the Agno River in the Mountain Province; the Lumot Reservoir project, auxiliary to the established Caliraya development; the Maria Cristina (80,000 KW) project on the Agus River, outlet of Lake Lanao; and the Fertilizer Plant project in the same area. Some 29 more projects, generally smaller, were pro posed in a more general way,—in Uocos Norte, Cagayan, Pangasinan, La Union, Nueva Ecija, Laguna, Tarlac, Bulacan, Quezon, Bataan, Camarines Norte, Albay, Sorsogon, Panay, Occidental Negros, Cebu, Bohol, Zamboanga, and Davao. Most of these are hydro-electric projects, but those in Aparri, Iloilo, Bacolod, Cebu, and Zamboanga are steam-power projects. The following table is taken from the Report, although the writer has been informed that some of the estimates were later changed. The construction schedule also shown, beginning with the year 1948 for the four initial projects,— Ambuklao, Lumot, Maria Cristina, and the fertilizer plant, was based on the supposition that the funds would be available by that time. Unfortunately, there was a delay, as the first loan from the U. S. Export-Import Bank for $20,000,000 was not approved until August, 1952. Mean while, however, work on the Lumot Reservoir and the Maria Cristina hydro-electric and fertilizer plant projects was undertaken with Philippine Government funds.6 SUMMARY OF THE ESTIMATED FINANCIAL DATA ON THE FIVE PROJECTS RECOMMENDED FOR INITIAL ACTION: (000 omitted) 6 Construction on the Lumot Diversion Project began in April, 1949, financed by a P5,000,000 loan from the Central Bank; construction on the Maria Cristina Development began in August, 1950, financed by a Pl6,000,000 loan from the Central Bank. Am- Maria Fertilizer buklao Itogon(l) Lumot Cristina Plant Total $24,149 $34,972 $3,291 $11,743 $14,364 $88,519 5,115 335 1,408 4,977 11,835 Recommended Construction Schedule Power Area 1 Province Ilocos Norte 2 Benguet 2 Benguet 2 Benguet 2 Benguet 2 Benguet 3 Cagayan 4 Pangasinan 4 Pangasinan 4 La Union 4 Nueva Ecija 4 Nueva Ecija 4 Laguna 4 Tarlac 4 Bulacan 4 Quezon 4 Bataan 5 Camarines Norte 5 Albay 5 Sorsogon 9 Panay 10 Occidental Negros • 11 Cebu 11 Cebu 12 Bohol 13 Zamboanga 14 Lanao 14 Lanao 14 Lanao 14 Lanao 14 Lanao 14 Lanao 14 Lanao 16 Davao Philippine Hydro-electric Program Developmen t Gasgas Agno Ambuklao Agno #2 Agno #3, Itogon Agno H Agno #5 Aparri Toboy #1, Lalikip Toboy #2, Lubas Amburayan Talavera Penaranda Lumot Reservoir Camiling Angat Agos-Infanta Abo Abo Bosigon Barit C a way an Iloilo Bacolod Cebu Mantayupan Loboc Zamboanga Agus #6-Maria Cristina, initial Agus #6-Maria Cristina, 2nd step Agus #6-Maria Cristina, 3rd step Agus #1 Agus #2 Agus #3 Fertilizer Manufacturing Plant Sibulan Falls Capacity 1,500 KW f72,000 ” 24,000 ” f86,000 ” 48,000 ” 49,000 ” *5,000 ” t75,000 ” 70,000 ” 350 ” 600 ” 600 ” 2,500 ” 20,000 ” 20,000 ” 500 ” 2,000 ” 1,375 ” 600 ” *5,000 ” *2,000 ” *5,000 ” 460 ” 2,500 ” *5,000 ” 80,000 ” 40,000 ” 80,000 ” 67,000 ” 119,000 ” 154,000 ” 5,500 Construction Schedule (Subsequent step) (1953—’55) (Initial Program) (1948—’51) (Subse. step) (middle 1951—’55) (Initial Program) (1949—’52) (Subse. step) (middle 1950—’53) (Subse. step) (middle 1951—’54) (Subse. step) (middle 1950—mid. ’52) (Subse. step) (middle 1951—mid. ’57) (Subse. step) (middle 1955—mid. ’58) (Indefinite Prog.) (1953—’55) (Indefinite Prog.) (1953—’55) (Indefinite Prog.) (1953—’55) (Initial Program) (1948—’50) (Subse. step) (middle 1953—’56) (Subse. step) (1956—middle ’59) (Subse. step) (1955—middle ’58) (Indefinite Prog.) (1953—’55) (Subse. step) (middle 1951—mid. ’53) (Subse. step) (1952—’53) (Indefinite Prog.) (1953—’55) (Subse. step) (middle 1950—mid. ’53) (Subse. step) (1950—’52) (Subse. step) (1951—’53) (Indefinite Prog.) (1953—55’) (Subse. step) (middle 1950—mid. ’54) (Subse. step) (1951—’53) (Initial Program) (1948—’51) (Subse. step) (1950—’52) (Subse. step) (1951—’53) (Subse. stepj (middle 1952—’55) (Subse. step) (1955—’57) (Subse. step) (1957—’60) (Initial Program) (1948—’51) (Subse. step) (1952—’54) t Includes Transmission to Manila 231 (1) Cost includes transmission lines at $14,441,000. (2) Does not include cost of water and land rights. Ambuklao and Itogon have been considered as a unii The Philippine Electrical Manufacturing Com pany (PE'M£O’ ),—A development from the excellent relations established between the Philippine Government and the Westinghouse Company was the decision to estab lish a factory here for the manufacture of incandescent and fluorescent lights under Westinghouse patents. A contract to this effect was signed in January, 1948, a few months before Roxas’ death. However, the equipment was not delivered until September of the following year and operations were begun only in May, 1950. This is now the Philippine Electrical Manufacturing Company (PEMCO), a Westinghouse licensee, in which the Government holds a substantial investment through the National Deve lopment Company. The Philippine Air Lines, Inc. (PAL) and further Government Aid to the De La Rama Steamship Co., Inc.—Much of the credit for the rehabilitation of the Philip pine Air Lines, tyic. with Government aid, through the National Development Company, should go to the Roxas Administration. Aid to the De La Rama Steamship Co., Inc. had been extended before the war, also through the National Development Company, and it was during the Roxas Administration that plans were made for the pur chase of three 10,000-ton ocean-going ships (representing an investment by the NDC of over P15,000,000 during the Quirino Administration); these ships, the Doha Alicia, the Doha Aurora, and the Doha Nati are operated on a commission bases by the Steamship Company with option to purchase. Government Purchase of the Manila Gas Com pany Authorized.—While most of Manila’s large public utility corporations were in process of rehabilitation, the rehabilitation of the Manila Gas Company (established in 1912) was delayed for various reasons. The Roxas Ca binet, on July 29, 1947, approved the purchase of 60% of the stock of the Company. However, actual control, through the National Development Company, was not obtained until 1951. The Company began to service its first customers only in January of 1953. The Government-Owned Corporations: PRATRA.—President Osmena had reactivated most of the pre-war government corporations and President Roxas continued to give them every encouragement, though many of them showed records of mismanagement and loss. In 1947 it became known that the National Rice and Com Corporation was seriously overstocked and it was also revealed that the National Trading Corporation (established in 1940 and reactivated in 1945) had suffered shocking losses due to large quantities of canned milk which had been allowed to spoil. Corruption in connection with the disposal of surplus goods by the Surplus Property Com mission was .also becoming an open scandal. Taking no warning from these experiences, President Roxas, by Exe cutive Order No. 90, dated September 10, 1947, created what was bound to become the most dangerous of all these corporations, the Philippine Relief and Trade Rehabilita tion Administration (PRATRA), which represented a fusion of the former Philippine Relief and Rehabilitation Administration, established by Osmena, the National Trading Corporation, and the purchasing department of the National Cooperatives Administration, also originally established in 1940 and reactivated by Osmena. In setting up this new entity, the Cabinet was reported to have been against the inclusion of relief functions, but as the old PRRA had been designated by the UNRRA (United Nations Relief and Rehabilitation Administra-. tion) to handle UNRRA relief work in the Philippines and insisted that this continue until it terminated its activities here, it was decided that PRATRA should carry on the relief functions of PRRA. However, PRATRA was chiefly designed as a government trading corporation, after the nature of the former National Trading Corporation which it absorbed, but with vastly augmented powers. The Executive Order (which the President was able to issue under the wartime emergency powers originally delegated by Congress to President Quezon), authorized PRATRA— "to undertake the prevention of monopolization, hoarding, injurious speculation, manipulation, private control, and profiteering affecting the supply, distribution, and movement of foods, clothing, fuel, and other articles of prime necessity.” Those were very broad and in fact dangerous powers to vest in any general manager or board of directors of any conceivable grade of ability and honesty. PRATRA could also— “acquire foods, clothing, fuel, fertilizers, chemicals, construction ma terials, implements, machinery, equipment required in agriculture and industry, and other articles and commodities of prime necessity, both imported and locally produced or manufactured, for sale in such a manner and at such prices as may be determined by the Board of Directors.” It could further— "enter into negotiations and contracts with other agencies and branches of the Government fend public or private corporations or associations for the manufacture or distribution of goods that it may consider neces sary to insure the availability of the supply thereof in the interest of the public welfare and the national economy.” This was as if the drafters of the order tried to sum marize all the possible economic, agricultural, industrial, and commercial activities of man, and then gave PRATRA not only blanket authority to engage in all these activities, but also to wield a large measure of arbitrary power and control over all public and private entities engaged in these same activities. In democratic countries, the danger of clothing a commercial entity with governmental powers has long been recognized. But even this was not all. This great authority and power was to be directed toward a designated end, dan gerously invidious and discriminatory. PRATRA was directed— • “to find ways and means of encouraging and assisting Filipino retailers and businessmen such as by supplying them with merchantable goods at prices that will enable them to compete successfully in the open market.” There could be no warrantable objection to the Govern ment of the Philippines adopting measures to encourage and assist its own nationals in business,—as, for instance, President Quezon did during the Commonwealth days, provided these were fair and just and did not discriminate against other nationals lawfully engaged in business here. The wording of the order implied that ways and means were to be found to place all others at a disadvantage. As could have been,—and was, predicted, PRATRA, “in undertaking the prevention of monopolization, etc.”, soon set up a whole series of monopolies of its own,—in galvanized-iron roofing and other building materials, milk, flour, etc. Its Administrative Order No. 4, dated February 24, 1948, through which it assumed the control and distri bution of all flour arrivals, beginning with that to arrive on a certain ship, was a demonstration of bureaucratism in full power and glory.7 It declared, in part: 7 Lest it be supposed that PRATRA was organized to deal solely with a situa tion of great scarcity of goods and the resulting hoarding, monopolization, specu lation, etc., it should be recalled that imports, by 1947, had already reached a huge total. As for “Grain and Preparations ”, while the 1941 import amounted to only some 716,000,000, the 1945 import had been 712,000,000, the 1946 im port 776,000,000 and the 1947 import 799,000,000. Flour did not begin to disap pear from the market until after PRATRA announced that it would place flour under control. 232 "All shipments of flour arriving in the Philippines shall henceforth be under the control and supervision of the Philippine Relief and Trade Rehabilitation Administration. “Shipments of Canadian flour shall all be purchased by this Office... “With respect to American flour, this Office shall purchase by indent order 20% of all allotments to the Philippines. "The balance of 80% of the shipment of American flour shall be released to the respective consignees but under no circumstances should the same be moved by them outside of their warehouses or sold except with the written authority of this Office. “All bakery owners, therefore, as well as all other ultimate flour consumers must directly obtain from this Office the required permits necessary to purchase their respective flour requirements. "All flour consumers in the provinces shall be served by PRATRA through its provincial branches or authorized representatives.. .” PRATRA’S interference with the flour business upset the entire distribution system, made it difficult if not im possible for many bakeries, especially Chinese bakeries, to obtain the flour they needed, brought many inferior and unsuitable brands of flour into the market, reduced the quality of the bread to such a degree that it could hardly be eaten, virtually destroyed what was once a good line of private business, and fostered a corruption that made a few rich, at the expense of all. The American Chamber of Commerce Journal said of this PRATRA order at the time: “It is easy enough to see what such authoritarian interference (it is not simply regulation of) with business on the part of an official or semi-official entity, would end in if permitted to continue. This govern ment trading corporation, exercising governmental power, would eli minate all private business in every field it chose to invade. The demo cratic separation between the government and business would be wiped out and we would have totalitarianism. On the way thither, we would have to leave behind private initiative and enterprise, prosperity and progress, and bow our heads to a new despotism.*’ The PRATRA flour order was issued some two months before Roxas’ death. PRATRA was ordered dissolved by President Quirino in his Executive Order No. 350, dated October 3, 1950, and replaced by the Price Stabilization Corporation (PRISCO) which was, however, granted practically the same powers. Indeed, in this order it was specified that to safeguard the public interest, PRISCO could “commandeer, requisition, and ration” all articles, goods, or commodities of prime necessity. If PRISCO has not aroused the bitter criticism which was directed against PRATRA, this is only because it has been some what less aggressive. Laws Enacted during the Roxas Administration. —Many of the laws passed by the First Congress at its first session provided for heavy increases in the rates of various taxes, and Republic Act No. 55 imposed a war profits tax, covering the period from December 8, 1941, to February 26, 1945, aimed at the enemy-occupation profiteers. Republic Act No. 35 exempted certain new industries from the payment of all internal revenue taxes for a period of four years. After the submission of the Report and Recommendations of the Joint PhilippineAmerican Finance Commission, in June, 1947, bills were introduced again increasing various tax rates, but these did not become law until after Roxas’ death. After the submission of the so-called Bell Report (Economic Survey Mission to the Philippines), in October, ^50, the rates were raised still higher, and a devastating’ 17% tax on foreign exchange was imposed, but that is another story. Americans were given a jolt by Republic Act No. 76 which repealed all laws or provisions of laws granting rights to Americans which are not enjoyed by other foreign nationals “unless they affect rights already vested under the provisions of the Constitution or unless extended by any treaty, agreement, or convention between the Republic of the Philippines and the United States of America.” This was a provision which amended the so-called “Flag materials Law” (Commonwealth Act No. 138), approved November 7, 1936, which provided that in public bidding, government contracts were to be awarded to the lowest domestic bidder provided that the bid was not more than 15% in excess of the lowest foreign bid in purchases in volving P2,000 or more. Now this was abrogated in so far as American citizens and corporations were concerned. The Americans had “parity rights”, it is true, but only as these pertained to the development of the natural resources and public utilities. With respect to government purchases, American suppliers were placed at a 15% disadvantage to any Filipino supplier or middleman. In practice, this meant in many cases that the Government had to pay 15% more than it would otherwise have needed to pay, this being the rake-off, usually, of some intermediary: A number of general managers of government corporations bitterly objected to the law, as it needlessly increased the costs of the equipment and supplies they needed. The enactment of Republic Act No. 37, known as the Market Stalls Law, together with the adoption of a Manila municipal ordinance, resulted in the ejection of all of the small Chinese merchants from the public markets of the city. Of the 10,000 booths and stalls in the 13 public mar kets of Manila, 1,435 were occupied by these Chinese in the retailing of daily public necessities. This did not seem too large a proportion in view of the number of Chinese-in the city and their historic role in the retail business of the country. Yet though lawful inhabitants, industrious, useful, and tax-paying, they and their dependents, totalling perhaps some 15,000 persons, were thus arbitrarily deprived of their means of livelihood. Court Decisions.—In one significant 1947 case, that of Jose Tan Chong v. the Secretary of Labor and Tam Swee Sang, the Supreme Court, reversing its previous decisions in the same cases and over-ruling or distinguishing a line of pre-war decisions, held that a child bom in the Philippines of an alien father and a Filipino mother was bom of alien parents and was itself an alien. The Philip pines owes much of its complex richness and progressiveness to the mixture of races and cultures which have taken place in the archipelago during the past 50,000 years. Now even a child born in the Philippines of a Filipino mother (but alien father) is held to be an “alien.” In another 1947 case, that of Krivenko v. the Register of Deeds, City of Manila, the Supreme Court handed down a divided decision to the effect that under the Consti tution, an alien was disqualified from acquiring any land in the Philippines whatever, even a residential lot. This decision8 was not generally considered final as it con cerned a constitutional question. The Secretary of Justice was reported to be questioning it and President Roxas was reported to have said that he considered it “too drastic”; it nevertheless threw the whole matter of land ownership into doubt. A more shockingly illiberal and undemocratic and unwise decision,—politically, socially, and economically, is hardly to be imagined. Yet the doubt, even now (1953) still remains. »The majority opinion, signed by Chief Justice Moran, was concurred in by Justice Feria, Pablo, Perfecto, Hilado, and Briones, among whom Justices Hilado, Perfecto, and Briones also wrote separate concurring opinions. Four sepa rate dissenting opinions were written by Justices Paras, Tuason, Bengson, and Padilla. A week before Roxas’ death, the Supreme Court pro mulgated a decision in the famous case of Haw Pia v. the China Banking Corporation. The case involved the legality of payments made by Haw Pia on various occasions from October, 1942, to August, 1944, to the Bank of Taiwan as liquidator of the China Banking Corporation, of certain sums owed by her to the China Banking Corporation and secured by mortgage. Reversing the decision of the trial court, the Supreme Court upheld the plantiff’s contention that her paymentsjto the Bgnk of Taiwan had discharged her obligation. Justice Feria, in the majority opinion, stated that the Japanese military authorities had power to liquidate the banks, that their actions were a valid exercise of this power, and that the obligation was there 233 fore discharged. The Court in effect found the actions of the Japanese to have been legal; no suggestion was made that the payment was under compulsion, and no distinction was made between payments made in 1942, when the Japanese “Mickey-Mouse” currency has some value, and payments in later years when this value was greatly re duced. The Haw Pia case itself involved but a small amount of money, but was considered a test case. The decision cost American and other allied nationals and corporations millions of pesos in deposits and credits which they had in the banks seized and liquidated by the enemy. One au thority commented on the decision as follows: “No past precedent can be found in international law in which the courts of a victorious country, like the Philippines, have validated with in their own territory the seizure of private property or credits by the defeated invading army.” Nationalism and Anti-Alienism.—As has already been stated, though President Roxas proposed the estab lishment of the Central Bank and the imposition of import control, and legislation on these matters was initiated by him, these measures became law only after his death. The Central Bank was inaugurated on January 1, 1949, and President Quirino’s Executive Order No. 193, implementing the Import Control Law, Republic Act No. 330, went into effect on that same day. The writer has said that the Joint Philippine-American Finance Commission urged the Philippines well down the road to a government “planned” and “managed” economy, as opposed to a system of free enterprise. But that was what the Filipino leaders themselves wanted. Ever since the Filipinos had gained control of the Legislative Branch of the Government, by virtue of the Jones Act of 1916, the leaders had favored government participation in busi ness, through national corporations, as they considered that this would serve as a check on the “exploitation” by American capital which, though it never materialized, they always feared. President Quezon, during the Com monwealth period, was overcoming this fear, but fear of foreign domination generally was greatly intensified by the nation’s experience during the Japanese occupation. The Japanese occupation had another effect in more or less training the Filipino politicians, especially those who were forced to collaborate, in the methods of authori tarianism, while inuring the people to the same thing. But the question always was how long it would be until the people lost their patience and rebelled against the tyranny of their own politicians and petty bureaucrats. It will be clear from what has been recounted that the general feeling in the Philippines after the liberation was not only strongly nationalistic, but anti-alien to a degree, though-that feeling was by far not so strong here as in some other countries which achieved independence after the war. There was never any such hostility here as there was, for instance, against the former Dutch masters in Indonesia, for the Philippines had not known the Euro pean form of colonialism for half a century. Nor was the feeling in the Philippines a result of an extravagant pride in newly-gained powers of government, for the Filipinos, except during the Japanese occupation, had for a long time virtually governed themselves. The truth is that the people had been roiled to the soul by the Japanese, and the bitter hatred felt for them was diffused in a diluted general antagonism toward all aliens, even, half-consciously, including the Americans. Those who understood the origin of this feeling could sympathize with it and could forgive much, though they might lament the course the Philippine Government was taking. The Failure of ‘‘Small Business.”—There was another factor that began to affect the situation about this time,—that was the increasing rate of failure among small business and especially small trading ventures. The reader will recall that President Roxas, in his first stateof-the-nation address, had spoken of his desire to encourage’ small business. The small business movement that sprang up after the liberation was another inheritance from the Japanese occupation. The economic collapse at that time resulted in general unemployment and forced thousands of men and women, who previously had been regularly employed in offices, stores, and factories, to turn to the so-called “buy-and-sell” business,—mostly a mere peddling of home-made, or of stolen or looted second-hand goods. This business was the last desperate resort of thousands of people in their effort to keep body and soul together. But, in a sense, they became “merchants”. Many of them, following the liberation, having lost their adaptation to steady work under some office or factory manager or fore man, elected to launch out for themselves in the world of opportunity that seemed to be opening to them. Some of them had made friends with men and officers in the American Army, and these Americans, grateful for the hospitality and friendliness shown them, in many cases encouraged such business aspirations and helped by lend ing money or sending back goods in considerable variety when they returned to the United States. Others of these small merchants dealt in army surplus goods. Everywhere in the ruins along Manila’s wrecked streets, there had sprung up little stores and offices, where a great miscellany of goods was displayed for sale,—many of them expensive, steel office-furniture, typewriters, radios, electric appliances, etc. These places were often very well kept, with neat signs, polished show-cases, attractive displays. One could sense the pride the new entrepreneurs took in their business. It was all very pathetic for their inevitable fate was easily foreseen. There were far too many of these little places of business, crowded side by side, offering the same goods, which soon were shop-worn. Though many were outside the shopping centers, the owners paid high rents, their sources of supply were irregular, their customers, if any, were casual, their experience was limited, their sales, few, their profits small and soon nil. The same thing happened, though on a smaller scale, with the businesses set up by men of the United States armed forces who had elected to remain in the country to go into business for themselves or in partnership with Filipino friends. Most, if not all of the pre-war business establishments, big importing firms and department stores, both Filipino and alien, were rehabilitating themselves. They were adequately capitalized and had the advantage of large and experienced staffs; they had only to renew their former connections with manufacturers abroad and to reestablish their distribution and selling organizations. Between these old firms and much of the new, post-war business enterprise, fortuitous and haphazard as it was, there was not even any real competition. The new movement was but a brief materialization of hopes and dreams which appeared only to vanish but which left behind a cloud of frustration and bitterness. The Government, instead of encouraging successful industrial and business enterprise, both foreign and Fili pino, adopted measures aimed at bolstering this highly uneconomic and doomed small business, simply because most of it was Filipino, thereby doing immense damage to the soundly based business structure which was in the course of being reestablished. “W7esfr'n£” Business from the Businessmen.— PRATRA, for example, was not merely a price-con trolling agency or an agency entrusted with the function of preventing hoarding and monopolization, but an organ ization deliberately created in part to assist Filipino business against other business in the country. The same was true of the import control machinery, which was set up not merely to control and to limit imports, but to take business away from the old, established importing firms, 234 many of which were alien, and to give it to the so-called “new” importers, who were to receive 20% of the quota fixed for each type of article imported. A later executive order frankly substituted the word “Filipino” for “new”. And this share was rapidly increased by the authorities in control. Not only Ildefonso Coscolluela, general manager of PRATRA, but Speaker Eugenio Perez, spoke openly of “wresting” the so-called control of the wholesale and retail business away from the aliens in the country. Justifiable as this may appear to be from the national istic point of vi^w, this was destructive rather than con structive as an economic policy, and subversive of every principle of democracy and even of fair dealing. In the import business, in place of the established, well-organized, well-financed, experienced, efficient importing firms, num bering some 200, there were soon over 3,000 “importers”, many of them mere intermediaries and license-peddlers demanding their “percentage” ranging from 10% to 50% and even more. What this did to the organized system of distribution and the prosperity of business, to employ ment, to the cost of practically all imports, and to the cost of living, is well-known to all. Also, of course, it was bound to develop a monstrous corruption. There were critics who held, and with good reason, that the real aim of §ome of the proponents of import control was neither to control imports nor to take the import business away from aliens, but to enrich a small clique of insiders and their favorites; the surplus army property gold-pot being about exhausted, another source of easy money was wanted. President Roxas probably did not realize what would happen, and neither did the experts on the Joint Philip pine-American Finance Commission, although they were given ample warning (in the columns of this very Journal). That is one trouble with government experts from abroad who know little about the local factors entering into a situation. Sometimes it seemed to the heavy-hearted observer that with the narrow and discriminatory policies being initiated, the Philippine Republic, so gloriously launched and with such promise of greatness, was committing just those mistakes President Roxas had warned the people would have to pay for in tears and toil. Roxas as President.—Roxas himself was a national ist, as he perhaps demonstrated most clearly when, as a younger man, in 1930, he attempted the organization of a somewhat fanatic protectionist association, Ang Bagong Katipunan,—with which, however, he did not get very far at that time. He was, in general, a man of narrower mind and narrower views than Quezon, and he never com manded the almost undivided popular following, nor was he able to exert the effective political control that Quezon did. But as President, he did something to moderate the narrow nationalistic spirit of some of the members of his Cabinet and Congress and even the Supreme Court. Fol lowing his death, Robert Janda wrote of him in the Amer ican Chamber of Contmerce Journal: “The tragic and unexpected death of President Manuel A. Roxas during the month, introduced an element of uncertainty into the entire legislative and judicial situation. Not only has the country lost an outstanding leader of proved integrity and ability, but the business community has lost a friend whose quick grasp of business problems and essentials gave a feeling of security to the entire community. . .” President Roxas’ chief fault was that amiable one of too great an affection for and reliance upon his friends. His close associate, Marcial P. Lichauco, in his book, “Roxas”, wrote: “His affection for his friends was, in fact, so great that it often prevented him from taking disciplinary action against them when they failed to comply with their duties. I remember two or three cases when subordinate officials should have been dismissed from office, yet Roxas found some way to help minimize the gravity of their offense. When he became President of the Philippines, this softness on his part proved a stain on his record.” It would be more accurate to say that this softness was largely responsible for the stain on his Administration, which was that of graft and corruption, not on his own part, but among his motley following,—also to be traced to the enemy occupation, the collaboration, and the post liberation campaign to wrest the Presidency from Osmena. Shortly before the death of President Roxas, the Saturday Evening Post published an article on the Philippines by Harold H. Martin, whose observations here led him to conclude that there are “three factors on which the future of the Republic hinges”. The writer of this short history came across this article again only after he had written the present section and he found that uncon sciously he had himself placed emphasis on these three factors. According to Mr. Martin, they were: (1) the “Huk problem”, (2) “whether or not the Govern ment can, during the next five years of American aid, build up an economy so strong that the country can carry on alone after American Government help is with drawn”, and (3) “whether or not the Government can be kept honest.” The distrust of the people in the Administration had already become so great that Roxas’ successor, President Quirino, in his first meeting with the Cabinet, was reported to have asked the members “to advise their respective personnel to so conduct themselves as to reestablish the confidence of the people in the Government.” At a press conference he stated that one of his main objectives would be to “restore the people’s faith in the Government.” A Malacanan press release modified this statement to the effect that his aim would be to “strengthen” the people’s faith in the Government, the President being quoted as saying that he wished to cast no reflection on the admin istration of his predecessor. Whether President Quirino succeeded in this worthy desire, is again another story. A Few Significant Statistical Tables.—Most of the untoward business developments which have been de scribed appeared during the latter part of the Roxas Ad ministration and did not reach their unhappy fruition until later. There are no figures for the exact period, but Philippine recovery, once it got under way, was at first phenomenal. The momentum of the enterprise and labor of some 20,000,000 people is not soon checked even by the unwisest government measures. The following table is taken from the Bell Report of 1950: Mining PHYSICAL VOLUME OF PRODUCTION (1937=100) Year Combined Agriculture Manufac Index turing 1946 ............. 38.7 58.2 21.0 1947 ............. 75 6 79.5 77.5 1948 ............. 85 3 86.4 89.4 IMPORTS AND EXPORTS FROM 1945 TO 1948 2.0 16 8 36 0 Year Total Trade Total Imports 1945 ............. 59,211,364 57,867,195 1946 ............. 720,091,530 591,716,481 1947. 1,553,797,312 1,022,700,608 1948............. 1,774,819,524 1,136,409,068 Total Exports 1,344,169 128,375,049 531,096,704 638,410,456 NATIONAL GOVERNMENT RECEIPTS, EXPENDITURES, AND DEFICITS: Fiscal year Receipts Expenditures Annual Deficit Cumulative Deficit P127.400.000 P213.400.000 P 86,100,000 P136.100.000 253,800,000 381,000,000 ............. ~ 361,000,000 357,800,000 384,800,000 425,100,000 331,300,000 520,200,000 253,300,000 250,200,000 90,500,000 461,400,000 1946 ............. 1947 ............. 1948 ............. 1949 ............. 1950 (est)._ “In the early years following Liberation, the deficits of the Government were met by drawing on the funds held abroad, by transfers from the currency reserves, and by borrowing from the U. S. Reconstruction Finance Corporation. As these sources of funds were exhausted, the Treasury found it necessary to have increasing resources to the banking system. Government securities have been sold to banks to be used as a substitute for cash reserve, and a budgetary loan has been secured from the Central Bank." Bell Report, 1950. ’Surplus. 235 The Business View A monthly review of facts, trends, forecasts, by Manila businessmen The Government From Official Sources MAY 1—President Elpidio Quirino receives Swedish Minister M.J.D. Pripp, who presents his credentials. The President signs House Bill No. 3175 standardizing the salaries and the automatic salary increases of public school officials and teachers,. May 2 — The Council of State approves the recommendations of the 15-man committee headed by Secretary of Finance Aurelio Montinola with respect to the present Philippine,American Trade Agree ment and Secretary of Foreign Affairs J. M. Elizalde is directed to transmit the proposals to the United States Government through the American Embassy (see last month’s issue of this Journal'). May 4 — Senator Quintin Paredes issues a press statement saying that he would accept the nomination for President only if and when President Quirino should refuse the nomination. According to a Malacafian press release, the President laughed away the comment that he might not accept the nomination because of the state of his health, saying that he was strong enough to act as a pall-bearer of those who think he is a sick man. May 5 — The President signs House Bill No. 189 incregsing the salaries of municipal judges and justices of the peace. Secretary Elizalde hands the Philippine Government’s proposals for the adjustment of Philippine-American trade relations to Ambas sador R. A. Spruance. May 6 —The President makes available Pl,000,000 for the re demption of emergency currency and guerrilla notes issued during the Japanese occupation; so far some 77,490,000 has been paid to holders and it is estimated some 71,765,900 will still be outstanding after the 71,000,000 redemption. The President announces that the MSA-PHILCUSA agreement for the drainage of the Candaba Swamps was to have been signed to day, but that the papers were not ready; however, the work will be started almost immediately; the project will cost several million pesos and will make some 800 square miles of fertile land available. Secretary of Foreign Affairs Elizalde leaves Manila by airplane for London to represent the President at the coronation of Queen Eli, zabeth II on June 2. May 7 — Th4 President signs a number of executive orders re ducing the 1952 real estate taxes in certain municipalities in Albay, Samar, and Leyte devastated by typhoons. The Office of Alien Property, U. S. Department of Justice, on behalf of the American Government, transfers to the Philippine Govern ment various additional tracts of former enemy-alien-owned lands in Davao, Bulacan, Nueva Ecija, and Tagaytay City; also a building. May 8 — Under-Secretary of Foreign Affairs Felino Neri is de signated Acting Secretary of Foreign Affairs. May 11 —Acting Secrete^ of Foreign Affairs Neri in a letter to Chinese Ambassador Chen Chih-ping, states that everything is being done to assure justice to the Chinese nationals still being detained by the Philippine Government and that 188 of the detainees apprehended in the mass arrest on December 7 of last year will be immediately in dicted by the Deportation Board in addition to the 11 who were pre viously charged, all the other detainees having been released. May 12 — The President authorizes the release of 7300,000 for the building of 17 kilometers of road along the Candaba swamp from Pulilan to Candaba town; this will facilitate the drainage of the area which has long been a refuge of Huk bands. The President accepts the resignation of Carlos P. Romulo as Ambassador to the United States and as Chief Delegate to the United Nations, tendered in a letter in which Romulo states that the President “may feel that I no longer am capable of that complete meeting of minds which would make my continuance.. . possible,” after, on being asked by the President to state his views, he had told him that it was his “considered opinion that it would be desirable in the national in terest that you reconsider your decision to seek another term." (Pre vious news reports were to the effect that the President had asked Romulo to deliver the key-note address at the Liberal Party Convention, scheduled for May 24, and that he had proposed that Romulo lead the senatorial ticket; it had also been announced at Malacanan that Senator Camilo Osias was shortly be nominated by the President as a delegate (not chief delegate) to the United Nations.) May 14—The President certifies to Congress the urgency of House Bill No. 3927 which would appropriate 73,000,000 for the installation of an automatic telephone system for the Government in place of the present system, built from surplus property, which, according to Secretary of Public Works Pablo Lorenzo, is costly to operate. The President receives Commodore Jose Francisco who returned yesterday from a 4-day goodwill visit to Formosa with a flotilla of three destroyer escorts of the Philippine Navy; he brought a message of well-wishes from President Chiang Kai-shek. The President sends a message of congratulation to Admiral Arthur W. Radford on his appointment by President Eisenhower as Chair man of the Joint Chiefs of Staff. Radford, Commander in Chief, Pa cific, called on the President when he was in Manila recently. May 15 — The President certifies to Congress the urgency of House Bill No. 3335 which would maintain the present 17% rate of tax on foreign exchange until June 30, 1954, which, under the existing law will be reduced to 12-1/2% from July 1 to December 31, 1953, when it will expire altogether. Senator Justiniano Montano and three others are exonerated by a special government prosecution panel from complicity in the kid napping and murder of the Mayor, Chief of Police, and a policeman of Maragondon, Cavite, last year; a motion is filed with the Court of First Instance, Cavite, for the dismissal of the case. May 19 — The Supreme Court unanimously declares Republic Act No. 342, known as the Moratorium Law, approved July 26, 1950, null and void as unconstitutional. May 20 — The President certifies to Congress the urgency of House Bill No. 3761 which would reduce the rates of a number of taxes imposed on gold mining companies. Eulogio Rodriguez is again elected President of the Senate following the resignation of Jose C. Zulueta as President. The Senate Special Investigating (“Blue Ribbon”) Committee finds Secretary of Justice Oscar P. Castelo, concurrently Secretary of National Defense, guilty of bribery, extortion, and immorality; the Secretary refused to appear before the Committee. May 21 — The fourth and last regular session of the Second Con gress adjourns, following passage of all the more important bills, in cluding the general appropriation bill of 7551,216,850 and a public works bill of 757,890,000 for specific projects only (no “pork-barrel”). The bill extending the Import Control Law for one year was not passed. The Senate adopts a resolution calling for the dismissal or at least the suspension of Secretary of Justice Castelo. TOTAL MONEY SUPPLY 1941, June 7 294,900,000 1945, December 1,120,100,000 1946, December 940,800,000 1947, December 1,015,900,000 1948, December 1,194,300,000 INDEX NUMBERS OF LIVING AND FOOD COSTS AND RETAIL PRICES IN MANILA (1937 = 100) Year Cost of living Food costs Retail prices 1945.. . . 776 945 985 1946.... 585 729 571 1947.. .. 434 470 344 1948.. .. 410 437 329 INDEX OF THE AVERAGE DAILY WAGE RATES OF INDUS TRIAL WORKERS IN MANILA (1941 = 100) Year Skilled Unskilled 1945 ............. 255 264 1946 ............. 294 365 1947 ............. 329 376 1948 ............. 326 378 GROSS NATIONAL PRODUCT AND TOTAL AVAILABLE MEANS (ACCORDING TO STUDY MADE IN 1952 FOR CENTRAL BANK); Year Gross national Net borrowings Net donations Total product from abroad from abroad available means 1946 ......... 74,788,000,000 7105,000,000 7 74,000,000 74,967,000,000 1947 ........ 6,128,000,000 184,000,000 255,000,000 6,567,0 1948 ........ 6,369,000,000 103,000,000 372,000,000 6,638,0 The national income figure for 1939, according to an estimate of the Bureau of the Census and Statistics, was Pl,802,1 S6.000, but the study made by the Central Bank indicated that the pre-war figures were too low as' based on "frag mentary data and doubtful procedures"; the inflated values of the post-war period must also be taken into consideration. 236 May 24 — The Liberal Party, in its national convention held in the Rizal Memorial Stadium, unanimously nominates President Qui rino for another term, following a walk-out by former Ambassador Romulo, Senator Tomas Cabili, Senator Lorenzo Sumulong, Repre sentative Jose Roy, and others, when a motion that the ballotting be secret was lost. Vice-President Fernando Lopez, who favored Romulo’s nomination for President, resigned his Cabinet position as Secretary of Agriculture and Natural Resources during the day. Former Speaker Jose Yulo is nominated for the Vice-Presidency over the other con tender, Senator Jose Avelino. Inasmuch as President Quirino could serve only two years of the regular four-year term (as no president can serve longer than eight consecutive years under the Constitution), Mr. Yulo would automatically become President for the other two years if the Liberal Party wins the election. Senator Quintin Paredes delivered the key-note address. May 26 — The President accepts the resignation of Vice-President Lopez as Secretary of Agriculture and Natural Resources and designates Chairman Placido M. Mapa, of the Rehabilitation Finance Corpora tion, Acting Secretary in his place. Mr. Mapa was Secretary of Agri culture and Natural Resources from September, 1948, to September, 1950, when he was appointed Chairman of the RFC. May 27— An exchange of notes extending the Philippine-Japa nese barter agreement for another four months, from June 1 to Sept ember 30, 1953, is signed in the Department of Foreign Affairs by Acting Secretary of Foreign Affairs Neri and Toru Nakagawa, Chief of of the Japanese Mission in the Philippines. The $100,000,000 two-way agreement has been extended several times,—first up to June 30, 1952; second, up to September 30, 1952; third, up to January 31, 1953; and after that, up to May 31, 1953. May 27 — Announced that Under-Secretary of Justice Roberto Gianzon .has been designated as the officer in charge of the Department as the President wants Secretary Castelo to give his entire attention to the Department of National Defense; it is emphasized that the change has nothing to do with Senator Recto’s charges against the Secretary. The President designates Acting Secretary of Agriculture Mapa also to take over the duties of the Chairman of PHILCUSA (Philip pine Council for United States Aid) as this will expedite the MSAPHILCUSA projects under the Department of Agriculture and Na tural Resources, almost half of the PHILCUSA budget having been allotted to agricultural projects. The President authorizes the release of P180.000 for the improve ment of the Davao-North road and P75.000 for the maintenance and improvement of roads in Luzon, chargeable against the Motor Vehicle Special Fund. Announced that rural development will be the theme of the. 7th anniversary celebration of the Philippine Republic on July 4, as indus trial development was the theme last year. May 30 — The President directs the National Economic Council to review the progress made under the revised 1950 development pro gram of the Administration (as submitted by the Philippine Economic Survey Commission, Jose Yulo, Chairman), for the purpose of "making recommendations on measures which will induce private investors to embark on enterprises that will contribute to the national welfare.” In a letter to Secretary of Finance Aurelio Montinola, Chairman of the Council, the President states that "equal emphasis should be placed on industrialization as well as on the expansion of agriculture.” Banking and Finance By W. M. Simmons Manager The National City Bank of New York COMPARATIVE statement of condition of the Central Bank: As of Feb. 27, As of. As of Mar. 31, Apr. 30, As of Dec. 31, 1949 1953 1953 1953 AsSets (In thousands of Pesos) International Reserve... P460.689 P472.540 P476.907 P479.042 Contribution to Interna tional Monetary Fund. 30,000 30,000 30,000 30,000 Account to Secure Coinage..................................... 113,306 106,940 106,940 106,940 Loans and Advances.... 77,047 54,140 48,140 44,380 Trust Account-Securities Stabilization Fund.... — — __ __ Domestic Securities......... 92,197 235,142 234,825 234,515 Other Assets...................... 20,390 41,902 42,842 46,712 P793.629 P940.664 P939.654 P941.589 Liabilities Currency — Notes........... P555.576 P571.418 P576.465 P579.629 Coins........... 74,384 89,041 88,618 88,255 Demand Deposits—Pesos 117,682 229,299 223,939 221,649 Securities Stabilization Fund................................. 2,000 20,543 18,923 18,828 Due to International Monetary Fund........... 22,498 496 496 496 Due to International Bank for Reconstruc tion and Development 2,389 2,380 2,380 2,379 Other Liabilities............... 2,636 4,840 5,056 5,337 Deferred Credits............... — 1,769 2,397 3,002 Capital................................. 10,000 10,000 10,000 10,000 Undivided Profits............ 6,464 745 1,247 1,881 Surplus................................. — 10,133 10,133 10,133 P793.629 P940.664 P939.654 P941.589 The international reserves as of April 30 were as fol lows: Central Bank International Reserves.................. $ 239,520,819.02 Japan Open Account (Due from)......................... 10,314,925.82 Net FX Holdings of Other Banks....................... 66,293,984.80 $ 316,129,729.64 This is an increase of $6,196,789 from March 31. Currency and coins issued totalled P667,884,041. Tight money conditions continue, aggravated to some extent by the first installment for income taxes due May 15. Merchants report business slow, with collections more difficult. Note: The information contained herein has been derived from responsible sources, but the National City Bank of New York assumes no respon sibility for its accuracy. Manila Stock Exchange By A. C. Hall Hall, Picornell, Ortigas & Co. April 17 to May 29 GOLD mining shares have continued to follow the line of lbast resistance during the period under review. There was a slight temporary recovery following Congressional passage of a tax relief law, but, in spite of the fact that Presidential approval of the measure is con sidered certain, the rally petered out quickly. Under the above-mentioned legislation, the gross pro duction tax is reduced to a flat 1-1/2%, while the industry is also granted exemption for three years from the 17% exchange tax and the 7% compensating tax on the value of all supplies imported from abroad. The lack of more positive resporise market-wise among gold-producers’ shares, in the face of this satisfactory development, reflects investor uncertainty regarding pos sible future action by the Central Bank. The latter has indicated that, with tax relief, the industry can now afford to sell a portion of its output to the Bank at the fixed price of P70 per ounce. Until this matter is resolved, market sentiment toward gold shares appears unlikely to change for the better. t*ase-metal issues have given a mixed performance. Chrome producers continue to do well in the market in view of the strong long-term demand for the metal. Philippine Iron Mines has ruled very steady, with invest ment-buying attracted by the low price-to-eamings ratio on this stock, but Lepanto has eased as a result of the confusing copper price outlook. An item of pronounced interest in this group is the coming merger of three former gold mining companies, the Antamok Goldfields, IXL Mining Company, and Masbate Consolidated Mining, into the Atlas Consolidated Mining and Development Company. The proposed conditions of merger are based on current book values of the companies with shareholders scheduled to receive .75 shares of Atlas for each share of Antamok, .825 shares Atlas for each share of IXL, and 237 one for one in the case of Masbate. The new company will actively develop and bring into production the Toledo group of copper claims in Cebu and the Mati iron property in Mindanao. among commercial and industrial equities, there is little of interest to report, the trading being generally quiet and featureless. Fixed-interest securities have eased slightly. oney conditions are tight, with no signs of easing. In the local free-gold market, a further small decline has occurred since our last review and current quotations are P102 per ounce for bullion, equivalent approximately to P103.25 per fine ounce. Company Demonstration Gold Mines............. Eastern Development Co................. General Base Metals......................... Jai Alai Corp, of the Philippines. . Marinduque Iron................................ Pampanga Bus Co............................. Tabacalera, 6% bonds (1962)......... OVER THE COUNTER Credit By R. A. Callahan Accountant and Office Manager Philippine Refining Company, Inc. MINING SHARES Total Sales r 4,ooo 300,000 69,250 400 10,000 P 3,000 1953-53 Range High Low 131.53 92.09 0.315 0.16 0.065 0.038 6.20 1.80 0.13 0.06 2.65 1.60 0.0035 .0013 4.80 3.50 0.07 0.02 0.048 0.028 0.29 0.16 0.155 0.0625 0.P7S 0.038 0.95 0.73 0.0875 0.028 0.30 0.08 0.1275 0.095 3.26 2.15 0.32 0.17 0.285 0.205 0.027 0.01 0.12 0.032 M.S.E. Mining Share Acoje Mining Co........ Antamok Goldfields. . Atok Big Wedge Min ing Co....................... Baguio Gold Mining Balatoc Mining Co... Batong Buhay Gold Benguet Consolidated. Coco Grove, Inc......... Consolidated Mines, Inc.............................. Hixbar Gold Mining Co............................... Itogon Mining Co.. . . IXL Mining Co.......... Lepanto Consolidated. Masbate Consolidated. Mindanao Mother p Lode. • Philippine Iron Mines, Inc.............................. San Mauricio Mining Co.............................. Surigao Consolidated.. Suyoc Consolidated... United Paracale MinHigh Low Close Change Total Sales 100.45 .25 .065 96.62 .23 .04 96.62 Off4.25 11 .25 Up .015 .0575 Up .0175 ,773,547 690,000 570,000 2 0975 10 002 40 031 048 1 09 0016 20 03 04 17 07 05 77 065 80 09 80 Off .20 002 Up . 0002. 25a Off .15 029a Off .001 17 Off 0775 Off 0625 Up 77 Off 0775 Up 500 207,000 5,700 3,214,000 .02 .0075 .0145 .06 .005 3,000 250,000 390,000 480,875 2,376,000 Gumaui 095 08 08 Off .02 575,000 45 28 225 .032 2 10 10 Up .005 20,000 35 26 205 .032 • COMMERCIAL SHARES 1953-53 Range High Low 155.00 120.00 22.00 22.00 20.00 15.00 90.00 75.00 150.00 100.00 110.00 100.00 50.00 36.00 325.00 320.00 12.00 10.00 27.50 24.00 12.00 8.30 0.30 0.25 4.90 3.00 0.30 0.30 107.00 100.00 23.00. 20.50 7.00 5.00 0.0925 0.024 1.10 0.90100.00 99.50 36.00 28.00 101.00 93.00 108.00 102.00 13.00 13.00 13.50 13.50 8.70 6.00 2 40 28 215 .01b Off Off .01 .01 .032 Off .023 66,180 20,000 Bank of the Philippine 155.00 145.00 155.00 Up 20.00 36 Binalbagan-Isabela 20.00b Bogo^Medellin Mil ling x 20.00a Central Azucarera de 75.00 75.00 75.00 40 Central Azucarera de la Cariota................. 106.00 105.00 106.00 Up 1.00 235 Central Azucarera de Filar........................... 100.00b Central Azucarera de Tarlac....................... 37.00a China Banking Cor poration .................... 280.00b Cia. de Celulosa de Filipinaa................... 11.00 10.75 10.75 Up .25 4,700 Filipinas Cia. de Se24.50a Industrial Textiles Mfg. Co. P.I............ 8.70 8.60 8.60 Up . 10 6,350 Manila Broadcasting Co............................... .27 .27 .27 Off- .03 7,400 Manila Wine Mer3.35 3.30 3.35 Up .35 800 Marsman 6s Co., pref. . Meralco, 6-1/2%........ 102.00 102.00 102.00 T 1,560 Metropolitan In surance Co. x 150.00b Pasudeco....................... 23.00 23.00 23.00 Up 2.00 125 Philippine Air Lines, Incj,........................... 5.00b Philippine Oil Dev. .032 .024* ,031a Up .006 1,481,000 Philippine Racing Club, Inc.................. .90 .90 .90 Off- .08 4,000 R 6a D 4% Bonds, 1959........................... 100.00 100.00 100.00 Up .50 500 San Miguel Brewery, 31.00 30.00 30.00 30,386 San Miguel Brewery, San^kliguel Brewery, 8% pref................... 95.00b 106.00 105.00 105.00 Off 1.00 2,425 Talisay Silay Milling.. . 13.00b Universal Insurance 8c Indemnity Co......... 12.00b Williams Equipmen 8.30b THE Association of Credit Men, Inc. (P.I.) is presently arranging for the printing of a detailed alphabetical index for the “Credit Manual of Commercial Laws • and Practices” which was distributed last year to all mem bers. The index, which soon will be sent to all members, will be of considerable value and assistance in using the Manual. Members of the Association are using a gold member ship sticker on collection letters. Increased orders of mem bers for stickers suggest that the use of them is proving advantageous. The Association has informed members of a new ser vice looking to the obtaining of ledger and credit informa tion from non-members. This service has not previously been attempted in the Philippines but the arrangements were approved by the Association directors on May 19. It is hoped that this effort will prove helpful to members. In the May meeting the directors discussed the generally expensive and complicated collection systems in use in the Philippines. The directors feel that the Associa tion can help members reduce collection expenses. It is considered unnecessary to use collectors to obtain payment of accounts from member firms. This matter is under study and a consolidation will be made of recommendations and suggestions. Inquiry through various credit and collection exe cutives suggests that, although money is short, slight improvements were noted during the second half of May. Most of the local banks are continuing to advertise for deposits. Inventories began to move a little better, collec tions improved slightly, and some money deposit improve ments were noted. The improvement was not marked but was fairly general through various trades. Some credit men believe that the improvement is due at least in part to the ending of the speculation on the activities of the Import Control Commission. It is expected that during June details of arrangements for handling imports will be worked out. The recent announcement of the extension of the Japanese trade agreement clarifies the status of Philippine-Japanese trading. Sugar exports are finishing and should be completed during July. This will contribute to more activity in do mestic loans which are already beginning to increase. • Most credit executives interviewed suggest that the improvements noted in the latter half of May may well be expected to continue during June. Electric Power Production (Manila Electric Company System) By J. F. Cotton Treasurer, Manila Electric Company 1941 Average—16,316,000 KWH x—Ex-Dividend T—Bond sales reported in units of P100 Kilowatt Hours 1953 1953 January..................................................... 50,107,000 45,152,000 February................................................... 45,501,000 42,450,000 March........................................................ 50,789,000 45,128,000 April........................................................... 49,159,000* 42,798,000 May............................................................ 52,200,000** 45,580,000 238 June............................................................ July............................................................. August........................................................ September................................................. October...................................................... November................................................. December.................................................. 45,223,000 47,542,000 47,988,000 47,216,000 50,073,000 47,652,000 50,656,000 Total.......................................... 557,458,000 •Revised ••Partially estimated ■poR many years the electric utility industry in the United States as well as in the Philippines has re ported continuous increases in the use of electricity. Greater industrial activity and far more use of electrical appliances, as well as the development of new electrical devices explain this phenomenon. Vast sums have been expended to increase electric utility capacity. One utility in the United States (Pacific Gas and Electric Company) has spent over $1,000,000,000 on new construction since World War II; Meralco’s investment in new construction since Liberation has exceeded P60,000,000. The local trend is demonstrated by the May output which again sets a new monthly record, about 1,400,000 KWH in excess of the previous record set in March, 1953. This is particularly notable since there is normally a sea sonal down-trend at this time of year because of the longer days. The May, 1953, output exceeded May, 1952, by 6,620,000 KWH, or 14.3%. A new peak output of 125,800 KW was registered on May 14. New lower residential rates were made effective May 1st. It is estimated that the new rates will effect a saving of Pl,250,Q00 annually for residential customers. The decrease is of greatest benefit to the small users. Real Estate By Antonio Varias Vice-President, C. M. Hoskins fir* Co., Inc., Realtors REAL ESTATE sales registered in the Greater Manila area during the month of May, 1953, numbered 639, with a total value of P6,056,977, as compared with 650, with a total value of P6,965,917, registered during the preceding month of April. Of the May sales, 165, with a total value of P2.980,713, represented deals within Manila proper, and 474, with a total value of P3,076,264, were sales in Quezon City, Pasay City, and in the suburban towns of Makati, Caloocan, Malabon-Navotas, Mandaluyong, Paranaque, and San Juan. A number of the bigger sales registered during the month were: CITY OF MANILA Binondo Juan Luna St. 1519 (L-40 8s 53, B-2007). Area: 102.4 sq.m, with improve ments. Sold by Ernesto Oppen to Maria Vda. de Lim for P40.000. Reina Regente St. (L-l & 2, B-2054). Area: 254.4 sq.m, with improvements, Sold by Froilan Lopez to Metropolitan Investments Corporation for P60.000. San Luis St. #686 (L-l, 4, 11 6s 12, B-333). Area: 3,145.2 sq.m. Two-story apartment building. Sold by Teodorica R. de Arastia to Trinidad de Leon Roxas for P280.000. Intnmuros Arzobispo St. #134 (L-3, B-23). Areas: 847 sq.m, with improvements. Sold by Edward J. Nell & Co. to Diesel Injection Magneto Service Co. for P45,000. San Miguel San Rafael St. near Legarda St. (L-3, 4 & 5, B-2630). Area: 420 sq.m. Sold by Manuel Casas to Arsenio de Guzman for P28.300 or, P67 a square meter. Uli-Uli St. # 1 (L-4 6s 5, B— ). Area: 1,036.1 sq.m. Sold by Fermin Aquino to Luisi’ta C. Villarino for ’ P30.000. Sari Nicolas Asuncion St. #314 & Caballeros St. S317 L-6, B-1865). Area: 406. sq.m. Sold by Joaquin Alvarez to Yu Yek Huy for P45.000. Folgueras St. $727-33 (L-8, B-1895). Area: 166.4 sq.m, with improvements. Sold by Guillerma Dy Garza to Concepcion Lim for P36.000. Sta. Ana Paco Roman St. (L-17, B-5). Area: 216 so.m. with improvements. Sold by Enrique Rodriguez to Philippine Net 6s Braid Manufacturing Company for Sta ' Cruz Misericordia St. #1342 (L-7D, B-2232). Area: 135 sq.m. Sold by Narciso Mendoza to Engracia Bautista for P28,184. Rizal Avenue #2522 (L-7, B-50). Area: 252 sq.m. Sold by Jose F. Oreta to Roman E. Ignacio for P37.000. QUEZON CITY Marikina Road corner Imperial St. (L-l, B-6). Area: 1,000 sq.m. Sold by Melitona Estate, Inc. to Delfin E. Argao for P 16,500. Diliman Cebu Ave. corner South *'C" and South 10th Sts. (Block S-53). Area: 3,724.3 sq.m. Sold by Isidore Falck to Vicente B. Llanes for the reported sum of of P30.000. South "I” corner South 6th Avenues (L-20, B-S28). Area: 784.7 sq.m, with improvements. Sold by Ruperto Gopez to Damiana Garcia for P35.000. Manila Heights Santolan Road, between Mariposa St. and First Avenue (L-7, B-l). Area: 12,035 sq.m. Sold by Simeon B. Castro to Antonio U. Miranda for P35.000, or, P3.90 a sq.m. Rosario Heights Balete Drive corner Acacia St. (L-l, 2 8s 14, B-6). Area: 2,961 sq.m. Sold by Andrea M. de Abreau to Ephraim Gochangco for P41.454, or, P14 a sq.m. SUBURBAN TOWNS NEAR MANILA Maka ti Forbes Park Subdivision—A parcel of 2,339 sq.m. Sold by Ayala Securities Corporation to James H. Baldwin for P31.576. Malabon Tinajeros—A parcel of 1,734 sq.m. Sold by Carlos Moran Sison to Narciso Marifias for P13.872. Mandaluyong A property with a lot of 742 sq.m. Sold by Gregorio Nicasio to Serafin Cheng for P19.518. to Pedro Pasig Capitol site—A property with a lot of 239 sq.m. Florentino Calabia for P18.470. Sold by Jose A. Santos to Tambo—A parcel of 798 sq.m. Sold by Vicente Arias to Blandina Gatnboa for P19.9S0. A parcel of 2,651 sq.m. Sold by Procopio Valte to Victor Tibay for P18.000. PASAY CITY Dominga St. (L-2239A, Psd-31207). Area: 486 sq.m. Sold by Agripino Yturalde to Jose E. Pablo for P30 a sq.m. F. B. Harrison St. (L-285B, Bsd-258). Area: 1,197 sq.m. Sold by Vicente Gotamco Hermanos to Antonio S. Arnaiz for P42.590. ■p eal estate mortgages registered in the Greater Manila area during the month of May numbered 657, with a total value of P10,853,885, as compared with 575, with a total value of P9,204,844, registered during the preceding month of April. Of the May totals, 251, with a total value of P4,962,183 represented deals within Manila proper, while 406, with a total value P5,891,682, were mortgages regis tered in Quezon City, Pasay City, and in the suburban towns mentioned above. Carolina St. #1166 (L-18, B-571). Area: 846.9 sq.m, with improvements. Sold by. Amado Martelino to Cham Ay Chia for P 125,000. REAL ESTATE SALES, 1953 Figueroa St. (L-1F, B-853). Area: 265.9 sq.m. Sold by Ramon Crespo to Telesforo Mendoza for P35 a sq.m. Sampaloc Dapitan #1211-17 & Kundiman Sts. (L-60, B-22). Area: 255 sq.m, with improvements. Sold by Ernesto D. Bohol to Jovino S. Lorenzo for P36.000. V. Mapa St. $148 (L-4 VC 1 8s 5, B—). Area: 3,651.7 sq.m. Sold by Consuelo Tuason de Casas to Rosario Caballero Vda. de Monserrat for P73.034, or P20 January.......... February........ March............. April................ May................. Manila 1,499,139 3,460,932 3,775,675 3,481,727 2,980,713 Quezon City 1,477,332 1,286,414 1,643,140 1,322,975 1,657,605 Pasay City 213,490 341,023 680,593 213,465 200,299 Suburban Towns Total 4,141,742 1,710,106 1,649,801 1,947,750 1,218,360 7,331,703 6,798,475 7,759,209 6,965,917 6,056,977 239 REAL ESTATE MORTGAGES, 1953 January.......... 3,691,913 1,377,690 February. . . . 5,560,707 2,196,329 March............. 7,586,190 2,419,165 April............... 5,069,966 1,973,705 May................. 4,962,183 2,026,850 245,200 2,016,917 7,331,720 718,300 2,924,480 11,399,816 553,800 1,503,942 12,063,097 184,500 1,976,673 9,204,844 1,219,800 2,645,032 10,853,865 Building Construction By Juan J. Carlos President, United Construction Co., Inc. DURING the month of April, the Office of the City Engineer approved building permits for construc tion work amounting to P4,123,120. For the same period in 1952, the volume of work authorized amounted to P3,502,260 in comparison with ?4,857,025 in 1951 and P3,748,100 in 1950. Some of the big projects that were started during the month of April were: A 1-story steel warehouse on Otis Street, Pandacan, for the San Miguel Brewery, costing Pl60,000; On Azcarraga Street, a 3-story office building for the Gregg Busi ness School, estimated at P80.000; For the Philippine Medical Center, a 2-story building on Taft Avenue, estimated at P70.000. A s has been the case every summer, shortages of various A essential materials have been felt in the local market. Plumbing fixtures, especially water-closets, are all but unavailable in the stores, and prices have increased from P105-P110 to Pl50-Pl60 per set. The shortage was due to the fact that water-closets were classified by the Import Control Commission as “Non-Essential” and that conse quently, importation was reduced to a minimum during the past 10 months. Fortunately, through the represen tations made by the Philippine Contractors Association, the classification was changed recently to “Controlled Essential” and shipments will arrive in the near future. Cement continued to be very scarce and there have been sales at as high as P7.00 per bag in the “grey” market, against the producers’ price of P3.60 per bag. Even reinforcing steel bars were in short supply and there are sizes, like the 3 /4 and 7/8 inch bars, which are unavailable. The local steel producers are having great difficulty in filling orders. A P2,000,000 project was started by the Armed Forces of the Philippine at Camp Murphy. Funds for this work are coming from the $10,000,000 grant of the United States Government handled by JUSMAG. Port of Manila By L. R. Wbntholt Vice-President, Luxon Brokerage Company DURING the month of May, 76,000 tons of general cargo were discharged on Manila piers and lighters. Pilferage is still going on, and although this matter has received some publicity in the newspapers, the results so far are negative. It is incredible that old news papers could be substituted for such goods as leather and textiles and even menthol, in quantities of from 7 up to 14 large cases, without anybody being able to shed any light on the subject. The importers blame either the arrastre contractors or the brokers, and they, in turn, blame the shippers or the shipping companies. The pilferage has gone on now for seven months, with no arrests made! Some congestion was experienced due to the simul taneous arrival of a number of ships With large quantities of merchandise to unload; however, the situation was speedily rectified and deliveries were reasonably prompt. Ocean Shipping and Exports By B. B. Tunold Secretary-Manager Associated Steamship Lines TOTAL exports during the month of April of this year showed practically the same tonnage as during April last year. 137 vessels lifted 434,325 tons of exports during the month, as compared to 434,891 tons lifted by 74 vessels during the same month last year. \ Commodities which have registered sharp increases over last year’s figures for the same month are: logs from 8,866,684 bd.ft. to 29,822,776 bd.ft.; chrome ore from 20,924 to 41,303 tons, and canned pineapples from 2,820 to 12,444 tons. Exports during April, 1953, as compared with exports during April, 1952, were as follows: Commodity Beer................................................ Cigars and cigarettes.............. Coconut, desiccated................. Coconut oil................................. Concentrates, copper............... Concentrates, lead.................... Copra............................................ Copra cake and meal............. Embroideries............................... Empty cylinders....................... Fish, salted................................. Foodstuffs.................................... Fruits, fresh................................ Furniture, rattan...................... Gums, copal............................... Hemp............................................ Hemp, knotted.......................... Household goods and personal effects........................................ Junk metal.................................. Logs............................................... Lumber, sawn............................ Molasses....................................... Plywood and plywood pro ducts.......................................... Ores, chrome.............................. Ores, iron.................................... Ores, manganese....................... Pineapples, canned................... Rattan, round (palasan)........ Rope.............................................. Shells, shell waste.................... Skins, hides................................. Sugar, cent./raw........................ Tobacco........................................ Vegetable oil............................... Transit cargo............................. Merchandise, general.............. 1953 1952 169 tons 446 tons 17 ” 17 ” 4,125 ” 3,612 ” 4,234 ” 5,974 ” 1,078 ” 10,000 ” 163 " — 41,256 ” 45,049 ” 4,079 ” 7,663 ” 227 ” 250 ” 327 ” 298 ” 19 ” 37 ’’ 16 ” 26 ” 468 ” 201 ” 1,234 ” 1,036 ” 100 ” 28 ” 95,032 bales 81,851 bales 28 tons * — 188 ” 320 tons 265 ” 3,846 ” 29,822,776 bd.ft. 8,866,684 bd.ft. 5,091,293 ” ” 4,835,380 ” ” 15,202 tons 51,681 tons 15 ” 41,303 ” 20,924 ” 92,121 ” 128,762 ” 984 ” 12,444 ” 2,820 ” 254 ” 242 ” 447 ” 376 ” 39 ” 57 ” 78 ” 61 ” 124,703 ” 107,545 ” 1,624 ” 1,585 ” 101 ” 106 ” 30 ” 2,360 ” 1,036 ” Freight Car Loadings By Jose B. Libunao Traffic Manager, Manila Railroad Company LOADINGS of revenue freight during the month of April, 1953, totaled 2,734 cars. This was a decrease of 754 cars, or 21.62% less than the loadings during April of 1952 which ran to 3,488 cars. Revenue Carloadings by Classes Revenue freight carloadings by general classes of com modities for the month of April are shown below: Tonnage April Commodity 1953 1952 Products of agriculture.................................... 23,640 16,200 Animal products................................................. 487 912 Mineral products................................................ 2,110 1,271 Forest products................................................... 13,917 15,044 Products of manufacture................................. 24,182 30,619 Merchandise less than by carload............. 8,699 7,190 Total............................................................... 73,035 71,236 240 June, 1953 AMERICAN CHAMBER OF COMMERCE JOURNAL 241 While there are 43 items under consideration with 25 items showing decreases totalling 14,223 tons, 18 items registered increases totalling 16,022 tons, making an aggre gate increase of 1,799 tons. The important items which suffered declines were—rice, 1,079 tons; palay, 433 tons; cattle and calves, 655 tons; logs and lumber, 1,337 tons; other products of the forest, 501 tons; petroleum, 838 tons; centrifugal sugar, 4,659 tons; molasses, 2,135 tons; and other manufactures, 718 tons, or a total decline of 12,354 tons. On the other hand, among the items which registered increases were—sugar cane, 9,204 tons; crushed rock, 596 tons; wood fuel, 697 tons; gasoline, 491 tons; fuel oil, 2,048 tons; and miscellaneous by less than carloads, 1,509 tons, or a total of 14,545 tons. The decrease in tonnage for the month was caused by the total absence of shipments of com, other mill pro ducts, tobacco, pigs, coconut oil, other oils, and alcohol for the month of April, 1953. During April, 1952, there was a total absence of shipments of “other animal pro ducts,” other products of the mines, almaciga, refined sugar, and mangoes. In other words, there were fewer items of commodities shipped during April, 1953, than during the same month in 1952. Carloadings for the month under review would have shown a larger total were it not for the fact that there was less service due to lack of power and other essential equip ment, such as box-cars for loading rice and palay; tank-cars for loading molasses and oils and other liquid products; and flat-cars for loading logs, lumber, etc. It may be as sumed, therefore, that delayed shipments, specially of molasses, and some other products may help augment the carloadings during the following month. The over-all situation for the coming months cannot, however, be im proved because of the general decline in business. Lumber By Pacifico de Ocampo Secretary-Treas urer Philippine Lumber Producers’ Association, Inc. DURING the month under review, April, 1953, the Philippines exported 48,135,271 bd. ft. of logs and lumber, 9,816,111 bd. ft. more than during the pre ceding month. This increase was mainly due to the larger shipment of logs to Japan—from 28,918,979 bd. ft. in March to 40,145,515 bd. ft. in April, 1953, or an increase of 11,226,536 bd. ft. Export to United States and Canada decreased by 1,165,900 bd. ft. from 6,149,073 bd. ft. in March to 4,983,173 bd. ft. in April. Export to all other countries, likewise, decreased by 244,525 bd. ft. from 3,251,108 bd. ft. in March to 3,006,583 bd. ft. in April. The following are the figures for the logs and lumber inspected for export during Bureau of Forestry: Shipper Agusan Timber Corp.................. Aguinaldo Development Corpo-i ration........................................ Alberto Llorente............................ American Rubber Co................ Anakan Lumber Co..................... Arturo Say...................................... A. Soriano y Cia.......................... Basilan Lum ber Company, Inc..................................... Bislig Bay Lumber Co., Inc.................................... Brigido R. Valencio..................... Central Sawmill, Inc.................... April, 1953, as released by the Volume in Board Feet Destination Lumber Logs Japan 1,350,000 U. S. A. 231,655 Hongkong 100,000 Japan 1,778,091 Japan 462,330 Japan 550,658 Japan 2,525,000 Guam 400,341 Japan 572,231 U. S. A. 1,106,580 200,242 Hongkong 77,061 Holland 99,140 Hawaii 95,575 1,201,108 U. S. A. 178,940 Hongkong 168,000 Japan 3,381,986 Japan 1,227,303 Formosa 526,220 242 AMERICAN CHAMBER OF COMMERCE JOURNAL June, 1953 Cipriano Luna Lumber Enter prises ............................................. D. C. Chuan fis Sons, Inc......... Dolores de la Rosa...................... F. E. Zuellig, Inc......................... Findlay Millar Timber Co................................... General Enterprises, Inc.............................................. General Lumber Co., Inc........... Gonzalo Puyat fit Sons, Inc.... G. S. Manalac............................... Hercules Lumber Co., Inc........ Iligan Lumber Co., Inc............. Insular Lumber Company................................. Johnston Lumber Co., Inc. . . . Jorge J. Tirador............................ Jose G. de Castro........................ Martha Lumber Mill................................................ Mindanao Lumber Develop ment Co...................................... Misamis Lumber Co., Inc......... M. R. Lacson................................. Nasipit Lumber Co. Inc..................................... Otto Gum, Inc............................... Pan Asiatic Commercial Co., Inc.................................................. P. P. Gocheco & Co., Inc........ Sanchez Logging Co..................... Hongkong Japan Japan Japan............. 641,196 Japan 450,202 Japan 96,980 U. S. A. 189,779 U. S. A. 190,003 Hongkong 35,000 U. S. A. 79,552 199,998 Hongkong 80,946 Japan 1,888,408 Formosa 399,970 U. S. A. 250,048 Japan 1,353,740 Japan 583,015 Japan 500,016 U. S. A. 815,957 Hawaii 68,047 South Africa 252,912 Japan 5,746,544 Japan 801,794 Japan 490,279 Formosa 236,975 Japan 3,000,000 Japan 393,228 Japan 200,000 Japan 500,159 U. S. A. 49,919 459,648 8,320 4,360,000 400,000 Japan 279,264 Africa 18,648 Japan 499,998 Sta. Clara Lumber Co., Inc....................... Serra & Co...................................... Taggat Sawmill Co., Inc........................................ Talagiman Lumber Co., Inc. . . . T. H. Valderrama fis Sons........ Valeriano C. Bueno..................... Visayan Sawmill Co., Ltd......... West Basilan Timber Co., Inc......................................... Western Mindanao Lumber Co., Inc......................................... Woodcraft Works, Ltd.................................. Woodworks, Incorporated............................... U. S. A. 399,987 Japan 700.000 Japan 529,383 U. S. A. 271,252 Hawaii 183,187 Japan 913,033 Japan 1,149,081 Japan 820,562 Japan 500,508 U. S. A. 46,733 Japan 300,000 Japan 1,168,716 Netherlands 6,883 Japan 830,702 U. S. A. 312,880 Hongkong 249,358 Trend of Exports to: Totals...................................................................... 4,556,993 43,578,278 R&SUM& of Exports to: Lumber (Bd.Ft.) Logs (Bd.Ft.) Total (Bd.Ft.) Japan........................................... — 40,145,515 40,145,515 United States............................. 3,194,862 1,788,311 4,983,173 Other countries......................... 1,362,131 1,644,452 3,006,583 Totals................................... 4,556,993 43.578,278 48,135,271 This Month Month Ago Year Ago Japan.............. — 40,145,513 — 28,918,979 — 9,392,152 United States and Canada. 3,194,862 1,788,311 4,082,944 2,066,129 4,623,518 1,155,742 Other countries 1,362,131 1,644,452 1,425,977 1,825,131 964,274 999,645 Totals.. . . 4,556,993 43,578,278 5.508,921 32,810,239 5,587,792 11,547,539 COMPARATIVE STATEMENT OF EXPORTS MADE TO DIFFERENT REGIONS OF THE UNITED STATES DURING THE MONTHS OF MARCH AND APRIL, 1953 March, 1953....................................... April, 1953......................................... Lumber in Board Feet Logs in Board Feet Western Eastern Gulf All States States States Others Total Western ' Eastern Gulf All Grand States States States Others Total Total 2,526,649 1,018,700 212,038 254,998 4,012,385 2,500,230 447,234 149,513 97,885 3,194,862 1,166,054 399,996 — 500,079 2,066,129 6,078,514 1,341,591 46,733 399,987 — 1,788,311 4,983,173 Difference (Increase+; 26,419— 571,466— 62,525— 157,113— 817,523— 155,537+ 353,263— 399,987+ 500,079— 277.778— 1,095 341 ENGINEERING EQUIPMENT rk & SUPPLY COMPANY, Inc. MACHINERY • MECHANICAL SUPPLIES • ENGINEERS • CONTRACTORS AIR CONDITIONING For Offices, Theatres, Hospitals, Stores, Restaurants, Hotels, Clubs and Homes ★ ★ ★ Suppliers of MACHINERY, EQUIPMENT and INDUSTRIAL SUPPLIES For Sugar Centrals, Mines, Sawmills, Power Plants, Machine Shops and All Industrial Plants ★ ★ ★ ENGINEERING — DESIGN — APPLICATION - ESTIMATES INSTALLATION — MAINTENANCE — SERVICE — REPAIRS General & Sales Office 174 M. de Comillas Manila Tel. 3-29-21 ★ ★ ★ Operating: MACHINE SHOPS • STEEL PLATE SHOPS STRUCTURAL STEEL SHOPS • WELDING SHOPS • BLACKSMITH SHOPS • SHEET METAL SHOPS • MARINE RAILWAY Engineering Shops No. 1 Calle L. Segura & Pasig River Mandaluyong, Rizal Tel. 6-65-68 June, 1953 AMERICAN CHAMBER OF COMMERCE JOURNAL 243 SUMMARY OF EXPORTS DURING APRIL, 1953, ARRANGED BY COUNTRIES OF DESTINATION IN THE ORDER OF VO LUME OF SHIPMENT TO EACH COUNTRY Countries of Destination Japan............................................. United States............................. Formosa........................................ Hongkong..................................... Guam............................................. Hawaii........................................... South Africa............................... Holland......................................... Netherlands............................... Lumber Logs Total (Bd.Ft. (Bd.Ft.) (Bd-Ft.) 40,145,515 40,145,515 3,194,862 1,788,311 4,983,173 — 1,163,165 1,163,165 637,739 80,946 718,685 — 400,341 400,341 346,809 — 346,809 271,560 — 271,560 99,140 — 99,140 6,883 — 6,883 Totals................................... 4,556,993 43,578,278 48,135,271 Arrivals of logs and lumber at Manila during the ** month under review, aggregating 12,849,279 bd. ft., increased by 1,832,122 bd. ft. as compared to arrivals during the previous month of 11,017,157 bd. ft. The increase in the Manila lumber supply caused price decreases in the wholesale trade of from the P175F180 per 1000 bd.ft. for white lauan and the F195-P205 for red lauan, paid the month before, to P165-P170 and P185-F195, respectively; the price of apitong remained unchanged at P170-P175 per 1000 bd.ft. hthe Philippine Lumber Producers’ Association, Inc. -*■ will start a movement in conjunction with the Bureau of Forestry for the conservation of our forest areas. This may initiate a much-needed reform in the present practices which have prevented proper reforestation of denuded areas. 't'he impending expiration of the Philippines trade agreement with Japan on May 31, 1953, has again caused anxiety among lumber shippers to that country. In view of the Senate’s failure to ratify the peace treaty, the Government should take immediate steps to renew the trade agreement lest we lose the Japanese market. Mining By Henry A. Brimo President Philippine Gold Producers Association, Inc. ON the evening of May 21, 1953, the Philippine Con gress, during its final session, passed the Tax Relief Bill (House Bill No. 3761) which will give the gold producing industry in the Philippines its first tax relief. The satisfaction at its passage is increased by the realiza tion that it required Herculean last-minute efforts to secure final passage. Without the direct aid of Secretary of Finance Aurelio Montinola, who screened the plea of the gold pro ducers for Presidential certification of this Bill, and the desire of President Quirino himself to protect the industry and its 100,000 workers and dependents, even the best efforts of a sympathetic Congress would not have availed as time ran out while the measure was undergoing a series of amendments. The final Bill passed by both Houses gives the fol lowing relief to the gold producers: (1) The permanent elimination of the graduated scale clause in the ad valorem (mines products) tax. Hence forth gold producers will pay a flat 1-1/2% tax on their production. (2) Elimination of the 17% excise tax for direct imports concerned in the operations of gold producers for a period of three years only. (3) Elimination of the 7% compensating tax as well, also for a period of three years only. In addition, the Bill suspends the corporate income tax for a period df three years for new mines or old mines resuming operation. The approximate savings expected to result from House Bill No. 3761 follow: INSULAR LUMBER COMPANY FABRICA, OCC. NEGROS --------- ¥---------SPECIALISTS IN KILN-DRIED LUMBER and MANUFACTURERS OF BOXES OF ALL DESCRIPTIONS MANILA DISTRIBUTORS: Philippine Lumber Manufacturing Norton & Harrison Company Company 814 Echague 14-30 Soler St. Manila Manila Insular Saw Mill, Inc. 340 Canonigo, Paco Manila MANILA OFFICE-. 603 FILIPINAS BUILDING 244 AMERICAN CHAMBER OF COMMERCE JOURNAL June, 1953 1. Ad Valorem Tax............................................. Pl.600,000 2. 17% Excise Tax.............................................. 1,500,000 3. 7% Compensating Tax.................................. 800,000 Total.................................................................. ?3,900,000 The above total, divided by the total gold production for 1952 (10 companies) of 433,360 ounces, means a cost saving per ounce of gold produced of approximately P9 per ounce. However, since a large amount of these tax savings will go back to the Government through corporate income tax payments, it can reasonably be stated that the actual benefit to the gold producers will probably not amount to more than P7.50 to P8.00 per ounce. The importance of this saving cannot be overestimated. The proof that without this relief the gold producers would not have been able to continue, is best shown by the per formance of the gold shares on the boards of the Manila Stock Exchange the day following final passage. On that day, not a single gold share advanced while three companies actually declined fractionally! Nor can it be argued that the market had already discounted the news because for the past few months the prices, of all gold shares, without exception, have been declining slowly but steadily. The reason, of course, is the persisting decline in the gold price, with indications of still lower prices to come. About the time the gold producers began asking for relief during the first half of 1952 the price of gold stood at around 5*110 per ounce (April, 1952). Today gold is selling at P101 per ounce. Thus the full measure of tax relief has already been dissipated through the decline in the gold price. Actually, therefore, the passage of House Bill No. 3761, which was intended to provide a good measure of relief to the gold producers so as to enable expansion or at least the prolongation of the life of each property, will fall far short of its mark. And while it can safely be stated that this tax relief staved off the disaster which had been freely predicted by almost every entity and adviser, a big ques tion remains: Will the industry be able to survive even with the tax relief just granted? The Stock Market has indicated its doubt. If gold prices continue to decline and the downward trend is not only unarrested but gives evidence of accelerating, a situa tion even more critical than that which faced the gold producers earlier in the year will soon be at hand. The present studies of the Philippine Gold Producers Associa tion are designed to meet the next coming emergency, which in truth, is practically upon us now. From the standpoint of the gold producers, and indeed of general industry, the paramount fact is that the last Congress did pass an important relief measure designed to help the gold industry. That such a measure was passed at a sacrifice to the Government, reveals an enlightened attitude that augurs well for future business. It is not easy to secure tax relief from the Government but it has now been demonstrated that it 7s possible and that Government will not turn a deaf ear when good faith is shown and the need is actually urgent. It may be asked what the gold producers can now do to stave off the disaster that persists in rearing its ugly dome. Well, they could ask for a direct government sub sidy, such as a guarantee to hold the price of gold at a certain level or to purchase all gold at a fixed level which would make it possible for the industry to survive. Or they could ask for a subsidy based on cost, such as is avail able in Canada to its gold producers. Again, a sort of mul tiple exchange-rate system, based on an exchange of gold for import licenses, could be a solution. Of these three, the last mentioned appears to be the most practical. In fact, there are indications that such a plan would be entirely feasible and would benefit the gold producers without a proportional sacrifice on the part of the Government, if not with actual benefit to the Government as well. MARFAK, tba tough, longer-lasting chassis lubri cant, withstands severe operating conditions, stays put, avoids metal friction thus reducing wear to a minimum. Save money on repairs and ride on that c’’sh‘ony filing always. Ask for MARFAK lubrication today at the nearest CALTEX dealer. “Better Roads Mean Better Living.’’ Join the PHIBRA (Philippine Better Roads Association) June, 1953 AMERICAN CHAMBER OF COMMERCE JOURNAL 245 It is certain that a large amount of gold is still under ground in the Philippines and the time to get it out is now, while the gold mining companies are still operating, with their staffs intact, mills active, mines in workable condition, and capital already committed. In the dilemma that faces the industry, our Government has as large a stake as the stockholders of the various companies and the 100,000 people who live from the fruits of gold production. But while the Government has already shown its genuine in terest and can therefore be expected to pursue its policy of help when help is needed, time is the arch enemy. The gold industry, however, having had concrete proof of the desire of Government to help, will not allow itself to be defeated for want of time; the time to prove its needs and the time that must always elapse before help can be secured. The future contains many problems, but both Government and industry have shown that coopera tion can overcome all problems, in time. Copra and Coconut Oil By Edward F. Underwood Manager, Copra Buying Department, Philippine Manufacturing Company COPRA and coconut oil prices exhibited unusual sta bility during the month of May in anti-climatic contrast to the violent swings in the preceding two months. Copra and coconut oil prices moved higher early in the month but, at the peak of the rally, prices were up less than 10% from the lows of April. The copra market reacted in the latter part of the month and closed with net gains of only $2.50 to $10.00 per ton. Coconut oil prices lost all of their early gain and closed unchanged. A surprising and completely unexpected drop in pro duction in Mindanao bolstered the market, offsetting the very limited demand and an almost complete absence of short covering. Consumers continued to operate on a hand-to-mouth basis and there was some evidence that coconut oil con sumption in the United States was declining due to increas ing substitution of lower priced oils. European buyers were inactive until late in May when prices eased. On the decline Indonesia sold 7,600 tons of copra for May-June shipment and resellers sold several thousand tons of Philippine copra for June-July and JulyAugust shipment. Copra Prices. Copra prices during May advanced to as high as $210 per short ton c.i.f. Pacific Coast for nearby shipment. The Pacific Coast market closed at $200 nominal. Buyers for Europe, after paying as high as $211.00 per long ton f.o.b. landed weights for second half June shipment, $192.50 f.o.b. for July shipment, and $187.50 f.o.b. for August shipment, reduced their ideas to $200.00 f.o.b. for early June shipment, $187.50 f.o.b. for July ship ment, and $185.00 f.o.b. for August shipment. Coconut Oil Prices. Coconut oil prices closed the month unchanged at 14-3/4/ per pound f.o.b. tank cars Pacific Coast for immediate shipment. Coconut oil for immediate shipment to the East Coast was quoted at 143/4/ nominal, down 1/4/ per pound from April 30. Copra Cake and Meal Prices. Copra cake and meal prices were steady and unchanged. At the end of May cake and meal prices were $72 to $75 per short ton c.i.f. West Coast. Copra Statistics Philippine Copra and Coconut Oil Exports (Zn Long Tons) Copra March April United States. . ........................ 26,187 21,950 Europe................ ........................ 6,100 6,250 Other countries. ........................ 12,342 13,056 Total..................................... 44,629 41,256 Engineers ★ Contractors ir Executive Offices—Engineering Div. Structural a Machine Shops Barrio Punta, Santa Ana, Manila Phones: 6-75-31 — 6-75-32 — 6-75-33 Are these Your Business Problems? A G & P—through its complete and integrated facilities—brings you the highest standard of per formance in the fields of engineering and con struction. . . manufacturing and merchandising. Singly, or in combination, these facilities arc available to Philippine industry. ENGINEERING & CONSTRUCTION FACILITIES Design, fabrication, erection and construction of Steel Bridges and Buildings; Light, Medium and Heavy Structures; Penstocks, Tanks, Bins and Mine Structures; Industrial Equipment; Reinforced Concrete Structures, Foundations, Piling, Wharves, Piers, Tunnels, Marine Works, etc. MANUFACTURING FACILITIES Machine Shops for Construction and Repair Jobs; Structural Steel Fabricating Plant; Foundry for Cast Iron, Brass and Bronze; Marine Repair Shops, Welding Shop. WOOD PRESERVING PLANT Pressure Creosoting of Structural Timber, Poles, Piles, X’Arms, Posts. (Member, American Wood Preservers Association). MERCHANDISING FACILITIES Representing over 30 major U.S. Manufacturers of Industrial, Agricultural and Engineering Equipment and Snpplies... including Air Conditioning, Refrigeration and Ventilation; Power and Light Plants; Irrigation, Sewage, Drainage and Flood Control Systems; Indus trial Machinery Equipment, etc. -KNOW-HOW" BACKED BY EXPERIENCE SINCE 1905 ATLANTIC, GULF & PACIFIC CO. OF MANILA Manufacturers ★ Distributors Merchandise Sales Division Robert Dollar Bldg., Port Area Phone: 3-36-61 (All Depts.) 246 AMERICAN CHAMBER OF COMMERCE JOURNAL June, 1953 PICIFII HCHMDIK C HR I' 0 RAT I m 449 Dasmarinas Manila AMERICAN RADIATOR & STANDARD SANITARY CORPORATION AMERICAN VALVE COMPANY AMES BALDWIN WYOMING COMPANY BADGER METER MANUFACTURING CO. BADGER FIRE EXTINGUISHER CO. BALL BROS. MASON JARS BOMMER SPRING HINGE COMPANY CAPEWELL MANUFACTURING CO. CARBORUNDUM COMPANY COLUMBUS COATED PRODUCTS CO. COLUMBIAN VICE & MFG. CO. COLEBROOKDALE IRON COMPANY CORBIN LOCK COMPANY DICK BROTHERS MANUFACTURING CO. EKCO PRODUCTS CO. FAIRBURY WINDMILL CO. GREAT NECK SAW CO. JACOBS MANUFACTURING CO. KAISER ALUMINUM & CHEMICAL CORP. KEENEY MANUFACTURING COMPANY MALLEABLE IRON FITTINGS CO. NORTH WAYNE TOOL COMPANY PABCO PRODUCTS, INC. “Pabco” Products RUDI SELL FOUNDRY COMPANY SLOAN VALVE COMPANY SOLARINE COMPANY TEMPLETON KENLY JACK CO. UNION CARBIDE & CARBON CORP. National Carbon Division “Eveready” flashlights & batteries Linde Air Products Division “Union” Carbide UNITED. STATES STEEL EXPORT CORP. ♦ STEEL PRODUCTS HOUSE FURNISHINGS GENERAL HARDWARE PLUMBING Coconut Oil United States............................. 2,992 4,234 Other countries......................... — — Total... . Philippin ............................. 2,992 4,234 e and Indonesian Coptra Export Philippinre Copra .Exports* Indonesian Copra Exports Metric Tons Percentage Metric Tons Pei■centage 1953 1952 1953/1952 1953 1952 1953. 52 January. . . . 41,025 77,050 53.2% 14,230 32,657 43.6% February... 38,672 84,884 45.6% 18,884 24,931 75.5% March......... 50,168 55,549 90.3% 19,559 34,518 56.7% April............ 48,745 55,405 88.0% 17,258 33,771 51.1% Total. . 178,610 272,888 65.5% 69,929 125,877 55.6% Manila and Cebu Copra Arrivals' ____________(In Metric Tons') Manila___________ Cebu Manila & Cebu Percentage 1953 1952 1953 1952 1953 1952 1953/52 January. . February. 8,448 14,775 12,682 16,303 21,130 31,078 68.0% 7,741 6,897** 16,570 13,029 11,705 20,770 28,275 73.5% March. . . 14,233 17,991 10,092 24,888 24,325 102.3% April........ 8,305 12,411 13,380 9,587 21,685 21,998 98.6% May........ 9,202 15,523 10,140*** 14,018 19,342 29,541 65.5% Total. . 40,593 73,512 67,222 61,705 107,815 135,217 79.7% * Manifested arrivals only. Unmanifested arrivals are usually estimated at 10% of manifested. *• Does not include 1,800 tons of damaged copra from the S.S. Anthony. *** Preliminary Production and Future Prospects. A phenomenal drop in Mindanao production during May more than offset the steadily improving situation on Luzon. Copra pro duction in the Philippines for May, 1953, was the lowest since 1949. Low production was the principal sustaining factor in the market. Arrivals in Cebu improved con siderably during the last week of May, indicating that production was picking up again. The sharp drop in production in Mindanao confounded the trade, since the most pessimistic estimates had been for a slight improvement. The best reason given for the surprising decline was the picking of unripe nuts in March when high prices prevailed. Production in Luzon improved moderately. The rate of increase was sharpest in the Bicol where there had been almost no production to speak of during the first four months of the year. One exporter estimated that Bicol production in July, 1953, would be at least 40% of July, 1952. This is the highest estimate given for this typhoonstricken area. Copra production should improve moderately through out the Philippines during the month of June. It is generally expected that production will continue to increase in July, reaching a peak in early August. There are some traders who believe that peak production this year may be delayed till September or early October, but the question is when and how much, rather than whether or not, the production trend is upward. Prices at the end of June should be lower than they are today. The questions again seem to be when and how much, rather than whether, prices will go higher or lower. Bearish factors are preponderant. Increasing production, a bearish longer-term picture for world fats and oils, the excellent chances for a settlement in Korea, a probability that the U. S. Department of Agriculture cottonseed-oil support program will be much weaker in 1953-1954 crop year—these are but a few of the considerations which can be advanced for expecting lower prices. To make things worse, copra and coconut oil prices are completely out of line with other fats and oils and have been out of line for many months. Consumers have had time to ex periment with substitutes and there are indications that further substitution is being made. • Against this array of price depressants, the bulls have only the hope of an increase in international tension or a possible temporary condition of shorts caught in a squeeze. An analysis of the situation clearly points to lower prices. It is extremely unlikely that present levels can be maintained for very long. June, 1953 AMERICAN CHAMBER OF COMMERCE JOURNAL 247 Desiccated Coconut By Howard R. Hick President and General Manager Peter Paul Philippine Corporation THIS report covers the period from April 15 to May 15, 1953. During the period copra prices receded about 25% and nut prices followed accordingly. Nut sup plies increased considerably and made procurement quite easy. Nut supplies, however, are not back to normal for this time of the year, and it looks as if it will be July be fore they are normal in the desiccated-coconut factory areas in Luzon. Most factories are on a reduced operation basis be cause of large inventories in the United States and to wait out the extremely high raw material prices that were pre valent during the first quarter of the year. One factory, Peter Paul Philippine Corporation, has entered into a production arrangement with the owners of “Mandalay Coconut Syrup,” better known locally as “Coco-Honee.” Peter Paul will ship its first large order to the United States this month and will continue .to further exploit the American market as well as build up domestic sales in the Philippines. This looks like a “natural,” to sell at much lower prices when the production has been stream lined. The following are the shipping statistics for the month of April: Shippers Pounds Franklin Baker Co...................................................... 2,917,500 Blue Bar Coconut Co................................................ 895,650 Peter Paul Philippine Corp..................................... — Red V Coconut Products, Ltd............................... 2,411,125 Sun Ripe Coconut Products, Inc.......................... 171,500 Cooperative Coconut Products, Inc..................... 49,800 6,445,575. Manila Hemp By T. W. Jurika Acting General Manager Columbian Rope Company of Philippines, Inc. THE month of May opened with renewed demand in most overseas markets, though consumers were still generally disposed to pick and choose among avail able offerings, with most interest being shown in the higher grades. As the percentage of balings in higher grades has been declining over recent months, this ready market for parcels of Davao E and F and Non-Davao CD, E, F, I, and S2 was not entirely unexpected. If prices continue to decline, however, producers will probably revert to more careful stripping of raw fiber in an endeavour to raise the grade of their product. Buying-prices in Davao remained generally unchanged. While dealers attempted several times to create artificial support for higher prices by freezing stocks for a period of a week, production was adequate to effect a more or less regular supply throughout the month. The figure on total Philippine balings for May was not available from official sources at this writing, but indi cations are that they are in the neighborhood of 68,000 bales, compared with 77,000 for April. It is anticipated in some quarters that June figures will show an even further decline. Although a drop in production of this proportion would ordinarily create a firmer tendency in the market, the recent availability of increased supplies of Central American abaca to United States manufacturers has ba lanced the shortage in the Philippines. are best in the long run B. F. Goodrich Silvertown tires will give you a long run for your money. These are the tires built with special cords in the tire body that increase tire life because they absorb shock and road impact. And the Silvertown tread wears evenly because all of it contacts the road. This is why value-wise drivers prefer B. F. Goodrich Silvertowns For long-run tire economy, get these tires that cost you no more, yet give you more miles, more wear. See your favorite dealer for money saving B. F. Goodrich Silvertown tires. ¥ Watch for the friendly Goodrich sign MORE THAN 200 DEALERS THROUGHOUT THE PHILIPPINES 248 AMERICAN CHAMBER OF COMMERCE JOURNAL June, 1953 Now! One Brushing with COLGATE DENTAL CREAM Removes Germs Causing Bad Breath and Tooth Decay! Oives You a Cleaner, Fresher Mouth All Day Long! African and Brazilian sisal still retain a favorable position price-wise when compared with even the lowest grades of abaca, but no further decline in this competitive fiber is anticipated in the face of concerted resistance among producers and recent disturbances in Kenya which may adversely affect the crop there. The Philippines-Japan Trade Agreement has again been extended to September 30, 1953, under substantially the same terms and conditions, thus permitting a continua tion of trade with the Philippines’ second-best customer in fiber. We attached hereto baling and export figures for the period January April, inclusive: BALINGS—JANUARY APRIL INCLUSIVE 1953 1952 1951 1950 1949 Davao................................... 160,267 170,505 164,709 102,318 73,154 Albay, Camarines, and Sorsogon............................. 96,248 67,597 114,731 66,294 48,055 Leyte and Samar............. 45,505 64,123 69,529 39,531 42,751 All other non-Davao 35,610 27,069 38,940 25,806 30,660 Total............................ 337,630 329,294 387,909 233,949 194,620 EXPORTS—JANUARY. APRIL INCLUSIVE 1953 1952 1951 1950 1949 United States and Ca nada.................................. 118,588 115,588 239,596 91,967 64,935 Continental Europe. . 68,204 63,407 71,046 30,414 38,995 United Kingdom.............. 42,962 41,602 60,808 26,052 9,742 Japan................................. 86,672 36,039 48,943 35,841 61,487 South Africa.................... 3,170 4,100 3,420 1,310 1,746 China.................................... 745 4,075 2,005 5,315 4,468 India..................................... 2,250 1,630 3,202 3,200 526 Korea................................... _ _ _ 950 — Australia and New Zea land.............................. 1,200 550 700 625 — All other countries.......... 370 160 — — 80 Total............................ 324,161 267,151 429,720 195,674 181,979 Sugar By J. H. d’Authreau Theo. H. Davies &• Co., Far East, Ltd. THIS review covers the period May 1 to May 31, 1953. New York Market. On May 1 a leading New York house wrote as follows: “Continued adverse weather coupled with uncertainty regarding economic trends in the light of peace negotiations, have been factors in limiting sugar inventories. On the other hand, consumer stocks are running low. The raw market appears to be on a sound basis with values recently edging up. Consumption should shortly be on the in crease, followed by a broader and more active market.” Such, however, has been the effect of the Secretary of Agri culture’s quota increase in April that no advance or increas ed activity has in fact developed and this despite better weather, sound basis, low inventories, poor peace prospects, and the rest of it. Refiners seem to be able to keep their heads above water without going into the market openly, and the low volume of business in actuals, contrasted with regular volume on the exchange, can only indicate private deals, off-stage, in sufficient volume to satisfy needs. As at the same time last year, refiners this month have trained their guns on afloat Philippines held by operators and business in these parcels, totalling approximately 20,000 tons, was done from 6.38/ down to 6.35/ for May and June arrivals. At the end of the month another lot of some 20,000 tons, was revealed in a similar position. Holders asked 6.45/ but there are no buyers above 6.35/. These lots are still unsold. The more distant arrival positions maintained the 6.45/ level, small business in Philippines being done thereat for July and August shipment. The undertone at the close was firm but there was no positive indication of volume developing in the early future. Reported sales of actuals totalled approximately 85,000 long tons, of which approximately 62,000 long tons June, 1953 AMERICAN CHAMBER OF COMMERCE JOURNAL 249 were Philippines. Exchange operations for the period approximated 176,000 tons. Deliveries of refined for the month totalled 607,375 tons as compared with 528,980 tons for April, 1953, and 681,982 tons for May, 1952. Dis tribution for the year to May 23 was 3,058,730 tons against 3,049,819 tons for the same period last year. Refiners’ stocks again showed a significant increase from 169,558 tons, as last reported, to 235,550 tons on May 16, high for the year. This figure compared with 256,520 tons for the same date in 1952. On May 16 Cuba had milled 4,900,000 tons of its restricted crop of 5,000,000 tons, and, by May 22, 115 mills had completed grinding, leaving 46 still in operation. As we write, grinding must have terminated. Opening and closing quotations on the No. 6 Contract were as follows: July September November March, 1954 May 1.................................. 5.95(< 5.98^ 5.98^ 5.58^ May 29................................ 5.93 5.97 5.96 5.58 Average spot price for the period was 5.846190/. ’ Average spot price from January 1 to May 29 was 5.753786/. Local Market, (a) Domestic Sugar. The market continued steady at the prices last reported on the basis of P15 per picul ex warehouse for 97° sugar, with a steady turn-over and no apparent shortage. (b) Export Sugar. Prices have stayed in line with New York quotations at P15.50/55 with only moderate volume reported due to holders’ persistent belief in an eventual advance in New York. This belief is hard to justify and no doubt June will see their hopes and doubts resolved. Storage charges now become a factor as well as interest and insurance. Total export shipments for the month are estimated at 107,402 long tons, making a total of 550,402 long tons against the 1952-53 crop and a total of 430,402 long tons from January 1. New York reports show Philippine arrivals for the period, January 1 to May 16, at 285,582 long tons as against 257,740 long tons to the same date in 1952. 1952-53 Milling.—Eighteen of the 25 centrals have finished milling for the 1952-53 crop with a total production of 799,543 short tons. The remaining 7 centrals still milling are expected to produce 340,148 short tons, or a total estimated production for the 1952-53 crop of 1,139,691 short tons, representing a further reduction of the crop estimate and an estimated shortage of 92,309 short tons. The average of juice purities to date is 84.32. Japan.—On May 28, Reuter reported tnat the Japan Sugar Manufacturers’ Association had said that the Cuban Government is seeking a 3-year contract to supply 400,000 tons of sugar to Japan annually, but that the Japanese sugar refineries were not interested in imports in the im mediate future, because the outstanding contracts, totalling 800,000 tons, would be sufficient to cover most of their requirements for the rest df the year. Prices of refined sugar in Japan have declined so much recently due to over-production, that the Ministry of Agriculture and Forestry intends to recommend sugar refineries to restrict output. Tobacco By Luis A. Pujalte Exporter, Importer, and Wholesale Dealer in Leaf Tobacco THE 1953 tobacco crop has been harvested and most of the farmers are now in the process of drying it except in Pangasinan, La Union, and the Visayas where quite a large part of the crop has already passed into the hands of dealers. The crop is slightly larger than was expected, perhaps up to 10%, but not more. If Doesn 't COST to AtR-AMRT/SI If PAYS iBZHH “ I------------ ~l The, B/wwltartMfig ^otnfoantf DZMB Bzn The y^Mcuo(£Mtu<$ fyqjoutibn' The Marion b Educational Aids for Children from Crib to College Today, as yesterday, the road to complete school shopping leads to 250 AMERICAN CHAMBER OF COMMERCE JOURNAL June, 1953 PASIG RIVER BODEGAS GENERAL BONDED WAREHOUSES * SOUTHWESTERN SUGAR & MOLASSES.CO. (FAR EAST), INC. MOLASSES BUYER 145 Muelle de Binondo Tel. 2-63-10 It is gratifying to note that the law restricting the importation of Virginia leaf tobacco was so modified as to permit the importation of the amount needed which the local production can not supply. It was realized what a loss of revenue the bill as originally introduced would have brought about. Imports By S. Schmelkes Mercantile, Inc. LL figures are in kilos with the exception of those for foodstuffs which are given in package units: Commodities: April, 1953 April, 1952 Automotive (Total)............................... ........... 2,403,354 2,064,846 Automobiles...................................................... 221,501 280,600 Auto Accessories................................. ........... 4,456 — Auto Parts......................................................... 257,855 356,694 Bicycles.............................................................. 473 4,791 Trucks................................................... ............. 243,015 159,917 Truck Chassis..................................... ............. 738,896 615,189 Truck Parts......................................... ............. 130,554 231,076 Building Materials (Total)................. ............. 3,769,599 4,315,998 Board, Fibre........................................ ........... 7,144 30,085 Cement.................................................. ........... 30,062 735,522 Glass, Window............................. ........... 275,489 1,345,163 Gypsum................................................. ........... — 45,359 Chemicals (Total).................................. ........... 6,145,640 6,781,160 Caustic Soda........................................ ........... 60,025 482,198 Explosives (Total)................................. ........... 29,554 61,825 Firearms (Total)..................................... ........... 2,159 12,640 Ammunition......................................... ........... 1,608 8,369 Hardware (Total)................................... ........... 4,436,086 2,757,162 Household (Total).................................. ........... 959,682 1,052,834 Machinery (Total).................................. ........... 1,685,065 3,689,384 Metals (Total)......................................... ......... 12,534,750 10,113,068 Petroleum Products (Total)............... ........... 47,379,176 56,389,905 Radios (Total)......................................... ........... 19,630 93,042 Rubber Goods (Total).......................... ........... 785,247 975,718 Of Imponderables How much does purity weigh? Where is the scale to measure Quality? In tegrity? Beverages, Misc. Alcoholic............................... Foodstuffs, (Total Kilos).................................. Foodstuffs, Fresh (Total)................................. Apples................................................................. Oranges............................................................... Onions................................................................. Potatoes............................................................. Foodstuffs, Dry Packaged (Total)................. Foodstuffs, Canned (Total).............................. Sardines v............................................................ Milk, Evaporated............................................ Milk, Condensed............................................. Foodstuffs, Bulk (Total)................................... Rice..................................................................... Wheat Flour..................................................... Foodstuffs, Preserved (Total)......................... 4,704 21,049,188 41,411 2,792 26,110 30,669 347,625 9,322 152,222 34,000 417,589 1 372,424 1,674 4,934 16,422,303 66,028 21,667 19,555 9,105 14,524 200,756 45,288 61,913 37,602 . 345,952 300,694 113 These are the imponderables which both bind and guide the pharmaceutical craftsman. Here in our Prescription Department we take pride in the thought that there is more in the things we mix and measure and weigh than can be expressed in grams and drams. This pride, and a stern adherence to guiding principle, is our guarantee of safet y when you hand your doctor’s prescription to our pharmacists for compounding. Bottling, Misc. (Total)...................................... Cleansing and Laundry (Total)...................... Entertainment Equipment (Total)................ Livestock-Bulbs-Seeds (Total)........................ Medical (Total).................................................... Musical (Total)........................................... Office Equipment (Total)................................. Office Supplies (Total)....................................... Paper (Total)........................................................ Photographic (Total)......................................... Raw Materials (Total)................... ................... Sporting Goods (Total)..................................... Stationery (Total)............................................... Tobacco (Total)................................................... 837,105 71,258 3,676 8,815 786,397 17,701 29,625 28,881 5,414,427 24,644 2,424,521 7,597 212,769 727,251 722,121 66,038 4,057 71,018 308,990 59,519 52,528 69,466 5,812,434 97,369 1,499,195 30,476 295,229 1,254,697 OVER ONE HUNDRED YEARS OF PRESCRIPTION COMPOUNDING Philippine American Drug Co. (BOTICA BOIE) 102-101 Escolta, Manila CEBU — ILOILO — LEGASPI — DAVAO Chucheria (Total)............................................... Clothing and Apparel (Total).......................... Cosmetics (Total)................................................ Fabrics (Total)..................................................... Jewelry (Total).................................................... Leather (Total).................................................... Textiles (Total).................................................... Twine (Total)....................................................... Toys (Total)......................................................... General Merchandise (Total).......................... Non-Commercial Shipments (Total)............. Advertising Materials, Etc. (Total)............... 44,140 501,423 51,988 534,791 5 114,352 2,709,313 50,364 4,199 479,687 71,672 7,971 63,326 313,817 15,444 696,545 54 177,829 2,663,437 30,450 3,298 955,055 55,879 11,084 June, 1953 AMERICAN CHAMBER OF COMMERCE JOURNAL 251 Food Products By W. E. M. Saul Manager, Food Products Department Marsman & Company, Inc. Trading Division THE Philippine Congress adjourned on May 21, 1953, without extending the present Import Control Law or acting on the Puyat Bill. If no special session of the Congress will be called, the Central Bank of the Philippines will probably take over the licensing of im ports on July 1, since the Import Control Law expires on June 30, 1953. 'The proposed new International Wheat Agreement has been signed by 45 to 46 member countries, as of the close of April 27, 1953, the final day for the affixa tion of signatures. The United Kingdom, with the largest quota of 177,067,939 bushels, did not sign the new Agree ment. Since countries accounting for more than 50% of the total of 595,542,052 bushels of wheat that would move under the proposed new International Wheat Agreement have signed, the pact will be open for approval by ratifi cation or otherwise, of the Council member-governments. If governments representing at least 50% of both export and import quantities record their approval by July 15, the new Agreement can become effective August 1, 1953. The Philippine Senate ratified the proposed new Inter national Wheat Agreement during the last day of its ses sion on May 21, 1953. During the latter part of May, the Import Control Commission decided to license some 700,000/50-lb. bags of flour at non-lWA prices for shipment during JunezJuly and some 3,500,000 '50-lb. bags at 1WA prices for ship ment from August to January, 1954, in six equal monthly shipments. Quantities expected to be licensed by the I.C.C. are the absolute minimum to cover requirements. Flour remains in short supply and it is reported that all grades of flour are being offered at prices that are above government ceilings. The distribution of flour is still ad ministered by PRISCO and bakeries are on an allocation basis. However, if the 700,000/50 lb. bags of non-IWA flour will be licensed promptly, flour should be in sufficient supply during July and August. p vaporated and powdered milks are in sufficient supply because of heavy arrivals during May. Local prices show a downward trend due to a price decline in the United States, coupled with the recent large arrivals. Panned fish. The poor catch in anchovies which was experienced during the past few months, bettered somewhat toward the latter part of this month; consequently, prices eased. On the East Coast, the so-called sardine catch is expected soon to begin off the coast of Maine, and the season in Maryland has just ended. Fairly large quantities of sardines (pilchards) from South Africa are scheduled to arrive toward the end of June or early July; these arrivals will materially ease the short situation in the 15 oz. packs of “tails” and “ovals.” The rainy season seems to have definitely started and there will be the usual extra demand for imported canned fish. Textiles By W. V. Saussotte General Manager Neuss, Hesslein Co., Inc. THE price structure in the New York market did not conform to any rigid pattern during May. The principal cotton textile items, including print cloths and colored woven goods, remained steady but there were some reductions in drills and twills and a slight decline in THE ROUTE OF THE BEARS Serving THE PHILIPPINES JAPAN HONGKONG U S. WEST COAST PORTS FAST - REGULAR - DEPENDABLE UNITED STATES LINES, INC. GENERAL AGENTS 133601 33602 33603 33604 PORT AREA MANILA PARED J. P. HEILBRONN CO.BW ESTABLISHED 1909 ■ W PAPER and Paper Products of All Kinds Office and School Supplies Printing and Lithographic Machinery and Supplies Surveying and Drafting Material Genuine DU PONT Cellophane, Cellulose Sponges, Cellulose Bands (Bottle Caps), Cellulose Yarn Esterbrook Fountain Pens, Push Pencils and Desk Sets FIR-TEX Building Board and Insulating Board Bodega Equipment—Barrett Lift Trucks and Portable Elevators Office and Sales Room: 3-36-17 575 Atlanta, Port Area, Manila e 8‘ 3-36-18 252 AMERICAN CHAMBER OF COMMERCE JOURNAL June, 1953 NEUSS, IIESSLEIN & CO., K 75 WORTH ST., NEW YORK, N.Y. FOREMOST SUPPLIERS OF TEXTILE FABRICS THROUGHOUT THE WORLD for 86 years and FOREMOST SUPPLIERS OF TEXTILES TO THE PHILIPPINES FOR 51 YEARS. ♦ FAUST SUITINGS FLATTERY PRINTS WALDORF PERCALES SEINE TWINE & YARNS AGUILA DENIMS • CARABELA CHAMBRAYS •COMMANDER BROADCLOTH • COTTON & RAYON POUND-GOODS -------------------------- MANILA OFFICE:---------------------------304 NUEVA STREET CORNER dasmariNas manila PHONE 3-99-71 Cable Address “NEHESCO” FAST WORKER! AIR-COOLED CABLE KING HOIST • Does more work per day. • Lifts faster. • Exclusive Air-Cooling design. • Only hoist equipped with a load brake with positive lubrication. • Rugged power. Simple, easy to operate. J4 to 12 tons capacities. • Speeds handling. Cuts cost. Find out how the Yale Cable King can save you money. Phone or come in today. THE EDWARD J. NELL CO. Anda corner Arzobispo, Intramuros, Manila P. O. Box 612 — Tel. 3-21-21 all types of finished rayons. However, the prices of raw cotton and other natural fibers and synthetics remained virtually unchanged. The Manila market, however, remained steady during May. There were some slight declines in lightweight fabrics now that the end of the hot season is approaching, but these were offset by slight increases in heavier goods. Arrivals from the United States during May totalled 17,007 packages. Included were 5,424 packages of cotton piece goods, 4,719 packages of rayon piece goods, 1,127 packages of cotton remnants, 2,341 packages of rayon remnants, and 915 packages of cotton knitting yams. Included also were 1,484 packages of sewing thread, 275 packages of cotton twine, 335 packages of oil-cloth, and 60 packages of cotton duck. Arrivals of textiles from countries other than the ' United States totalled 3,016 packages. Included were 627 packages from China, consisting mainly of cotton piece goods, and 910 packages from Japan, including 619 packages of cotton piece goods and 194 packages of cotton twine. There were 819 packages from Europe consisting almost entirely of sewing thread, and 660 packages from India consisting entirely of jute cloth and jute sugar bags. Legislation, Executive Orders, and Court Decisions By E. E. Selph Ross, Selph, Carrascoso & Janda THERE is still some delay in the compilation of the measures adopted by Congress. It is reported that 130 bills were passed by the last Congress. Some of these bills relate to increases or adjustments in salaries of government officials or employees or other matters of governmental practice which are not of special I interest to the business community. Many relate to change of names of barrios; some to change of administration of trade and agricultural schools. A considerable number relate to radio or electric and television rights. I House Bill 299 requires use of Philippine products under certain conditions on all government projects whether done directly or through contract awards. House Bill 433 prohibits export of abaca se eds or derivatives. House Bill 825 was combined with Senate Bill 423 to constitute the “Labor Peace Bill”. House Bill 1698 gives tenants working lands, preference in case owner desires to sell or lease his land. House Bill 1784 relates to disposition of income-tax returns and for publication of a list of income tax payers and amount paid by each and allows the House Ways and Means Committee and the Senate Com mittee on Finance to examine any returns and give to the respective house relevant and useful information. House Bill 1918 amends the percentage-tax section of the Revenue Code covering operators of factories, sugar centrals, etc., and specifies that rope, twine, coconut oil and by-products of copra, exported, shall not be subject to the tax. House Bill 2014 implements Executive Order of April 20, 1946, regarding deduction of impairment of capital of prewar domestic in surance companies from year to year until total amount has been de ducted from gains. House Bill 2482 authorizes the Government to sell fertilizer at less than cost, to rice and com producers. House Bill 2761 transfers the Sugar Quota Administration from the Department of Commerce to the Philippine Sugar Institute. House Bill 2741 amends the business-name law to provide for renewal of registration of such names every 5 years. House Bill 2758 amends the Patent Law to provide for registration of designs and utility models. House Bill 2765 amends the Trademark Law so as to provide for registration by foreigners whose countries grant substantially similar privileges to Philippine citizens, and if there is officially certified to the Philippine Government by the foreign government a copy of the foreign law translated into English. House Bill 2798 authorizes squatters on public lands and public places to continue to occupy same for 1 year from date of approval of this Act. House Bill 2855 prohibits labor on Sunday, Christmas, New Year, Holy Thursday, and Good Friday. There are a number of exceptions covering essential services and activities. June, 1953 AMERICAN CHAMBER OF COMMERCE JOURNAL 253 House Bill 2922 amends the definition of vessels eligible for coast wise trade by restricting the distance that non-self-propelled vessels may be allowed to navigate, not more than 60 miles along the coast or more than 30 miles to another island. House Bill 3122 amends the definition of “prohibited drugs” by adding a list of synthetic drug preparations supposed to be habit-forming and adds a blanket clause by which the Secretary of Finance and the Secretary of Health may add other substance to the list. It also pena lizes any druggist or doctor who negligently loses any such drug. House Bill 3128 extends the increased corporation income tax. House Bill 3210 evidently did not pass. This was the extension of the individual income tax which expired December 31, 1952. With holding will be at old rate for the year 1953. House Bill 3204 prohibits off-stadium betting activities (“bookies”) on horse races and jai alai. House Bill 3227 creates a Fiber Board to take charge of inspection and grading of fiber and gives it considerable power for regulation of local trading and export of fiber. House Bill 3333 extends until Congress shall provide otherwise, the increased documentary stamp tax. House Bill 3335 extends to June 30, 1954, the 17% exchange tax, which had previously been reduced to 12-1/2% by Repubic Act 814. House Bill 3336 extends until Congress shall provide otherwise, the increased tax on distilled spirits and cigarettes. House Bill 3355 provides for expropriation of landed estates in Manila and limits the rental to 12% of the assessed value. House Bill 3482 extends until Congress shall provide otherwise, the increased sales and percentage taxes. House Bill 3521 amends the Workmen’s Compensation Law so as to provide for increased fees from insurance carriers and uninsured employers and adds a provision for registration of employers with name of insurance carrier, and penalties for violation of the Compensa tion Act. House Bill 3532 nationalizes pharmacies and drug stores and defines a pharmacy or drug store as “any establishment wherein medi cines'are dispensed, prescriptions filled, or drugs, and chemicals sold at, retail or wholesale basis.” House Bill 3761 amends and reduces the mining taxes. House Bill 3856 amends Motor-vehicle Law so as to provide for registration of agricultural vehicles monthly for such months as actually House Bills 3857 and 3931 amend percentage tax on sales covered by section 186 of the Revenue Code. House Bill 3858 amends Act 671 and condones interest on certain obligations of prewar debtors to the Government or government-con trolled corporations, but does not affect transactions with others. Senate Bill 318 provides for a procedure for arbitration. Senate Bill 350 makes the Walled City and its walls national his torical monuments, and walls are to be reconstructed except where interrupted by existing streets. Senate Bill 409 regulates the practice of nursing and prohibits the practice of nursing without a certificate from the Board of Examiners which is created by this law. Senate Bill 423 combined with House Bill 825 is the Labor Peace Bill. Senate Bill 458 defines the term “lease” or “charter” in relation to contracts giving non-citizens the use or control of Philippine vessels. Senate Bill 464 amends the Sugar Quota Allocation Law by giving the Sugar Quota Administration power to allocate B and C sugar under certain conditions and confirming right of a planter to transfer his allotment from one milling district to another. Senate Bill 493 authorizes concessions for the playing of bingo for prizes in goods or commodities other than money. This requires a building costing not less than Pl00,000 and the payment to the Philip pine Government for each such establishment the sum of P50.000 per annum for a cancer fund to be administered by the Secretary of Health for the study, research, detection, and cure of cancer. MOTOR SEIlVHIi CO., ft AUTOMOTIVE PARTS • ACCESSORIES GARAGE & SHOP EQUIPMENT BATTERIES • TIRES • TUBES 230 13th St., Port Area — Tel. 3-36-21 found wherever fine cars travel *•« "IM OF FHOTFCTlO* veedol MOTOR “the film of protection” TIDE WATER ASSOCIATED OIL COMPANY t Wedding to Remember... YES, it will be “a wedding to remember” with your WEDDING and RECEP- | TION INVITATIONS j ANNOUNCEMENTS | ACKNOWLEDGMENTS i and AT-HOME CARDS printed correctly and in the best of taste . . . here! I Only quality printing materials arc used, meticulous care | goes into the execution of proportion, color, and design, and I the skill and experience of master printing craftsmen ! combine to produ.-e the type of fine printing by which we've been known for 54 years. McCullough printing co. > Printing Headquarters Since 1899 (A DIVISION OF PHILIPPINE EDUCATION CO.) I 1101 Cnstillejos, Manila Telephone 3-21-70 i 254 AMERICAN CHAMBER OF COMMERCE JOURNAL June, 1953 ★ LUZON STEVEDORING COMPANY, INC. Manila ★ MACLEOD and Wffl of PHILIPPINES Hemp Exporters Steamship Agents Philippine Safety Council By Frank S. Tenny Founder and Executive Director SEVERAL significant events took place in the safety field this last month, some of them to have imme diate effect, others being more in connection ^with the “big picture”. The Council’s board of directors has authorized Jthe ac quisition of the services of a Filipino safety technician for the technical staff. The new engineer has been employed by the U.S. Navy as a safety inspector for several years and will be especially valuable in training workers through the vernacular. He will be available to the Council within 30 days. The Council’s “Safety Education Booth” at the Inter national Fair was closed on May 31 after a highly successful operation. Pictures of the booth exhibits have been taken and will be distributed here and abroad. The Fair Board has informed the Council that a gold medal has been awarded the P.S.C. for “exemplary public service” inAthe booth’s operation and for services rendered the Fair in connection with public safety. Plans progress for the second annual observation of National Safety Week next month. Mr. P. G. Maliuanag, Chief of the Safety Engineering Division of the Department of Labor, has been invited to coordinate with the Council in this matter and a meeting was held on June 17 to for mulate further plans. The Council continues to devote increased attention to security matters, although steering clear of being “in the guard business”. Several large firms are utilizing the services of the technical staff as security consultants. This work, although not normally a function of a community safety council, is in demand here at this time. The preliminary planning for the organization and operation of the Security Delivery Service is about com plete. This is a combination armored-car and air-delivery service for cash, bullion, and other valuables. Inquiries may be sent to the Safety Council office until further notice. Close safety liaison with the taxicab industry con tinues, several lectures to drivers having been given during the past month. Attempts are now being made to make contact with appreciable numbers of jeepney drivers so as to begin an educational campaign among them. The Council has begun an active cooperation with Colonel C. V. Lucero, new Manila police chief. Already certain changes and improvements in local traffic matters have been discussed and remedial measures formulated. The Chief has invited the Council Executive Director to be a guest instructor at the newly reconstituted Manila Police Training School. The Fire Prevention Board continues to function, the latest project being that of urging provincial governments to create local “volunteer fire department” units. The Council will furnish technical assistance. There are many other items of interest to report in this column this month, but lack of space limits them to the above. 207 Myers Building Port Area, Manila AGENTS TELEPHONES BROKERS 3-34-20 CHARTERERS 3-34-29 American Steamship Agencies, Inc. Manila and Tokyo 212 Myers Bldg. Port Area Manila Cable Address: “AMERSIIIP ” June, 1953 AMERICAN CHAMBER OF COMMERCE JOURNAL 255 COST OF LIVING PRICE INDEX FOR WAGE EARNER’S FAMILY1 IN MANILA BY MONTH, 1948 TO 1952’ (1941 = 100) Bureau of the Census and Statistics, Manila 1948 1 1 1 House | cloth- Ifuel, Light:|Miscel-IPurchas(63.43) Rent 1 nd Watet' laneous ing Power 1 (ioo) 1 Ul.96) | (L04) 1° (7.73) | (14.84) |of a Peso January.......... . 390.7 427.6 453.9 224.5 304.6 249.9 .2560 February. . . . . 369.8 394.0 453.9 223.8 301.1 254.4 .2708 March............. . 349.4 361.0 453.9 214.6 308.1 255.9 .2862 April................ . 354.6 374.1 453.9 209.4 289.7 254.8 .2820 May................ . 349.8 360.2 453.9 214.2 289.7 271.6 .2859 June................ . 354.3 370.4 453.9 205.2 283.2 262.9 .2823 July................. . 356.4 374.2 453.9 201.3 281.6 262.4 .2806 August............ . 363.6 385.7 453.9 199.8 281.6 261.7 .2751 September. . . . 370.6 397.2 453.9 199.2 279.6 260.6 .2698 October.......... . 374.9 404.0 453.9 204.8 283.2 257.9 .2668 November... . . 368.7 394.4 453.9 202.0 281.6 258.7 .2712 December. ... . 365.9 389.9 453.9 202.0 282.4 258.9 .2732 1949 343.7 357 9 453.9 198 4 272.9 251.1 .2910 January.......... . 363.8 386.8 453.9 202.0 279.0 258.9 .2757 February.... . 343.8 355.5 453.9 203.0 277.5 258.9 .2900 March............ . 345.3 358.2 453.9 202.0 276.3 258.5 .2896 April............... .. 348.7 362.6 453.9 197.6 287.5 257.1 .2868 May.............. . . . 348.8 362.8 453.9 197.2 287.5 257.1 .2869 June.................. 349.0 362.9 453.9 203.9 287.5 257.2 .2865 July................... 351.7 374.0 453.9 194.2 265.8 240.5 .2844 August........... .. 337.5 351.2 453.9 196.3 266.6 241.2 .2963 September. . . . 333.6 345.1 453.9 190.3 264.8 243.1 .2998 October............ 332.9 343.3 453.9 199.9 264.8 245.0 .3004 November. . . . 339.6 356.1 453.9 191.1 258.4 239.8 .2945 December. ... . 329.6 335.9 453.9 202.9 259.5 256.2 .3035 1950 337.5 333.7 453 9 270.7 252.0 313 8 .’2963 January......... .. 332.3 336.8 453.9 238.0 253.1 269.3 .3010 February. . . . . 336.9 340.2 453.9 233.3 257.8 284.1 .2969 Match............ .. 339.0 341.4 453.9 236.7 257.8 292.6 .2950 April............... . 331.8 328.6 453.9 237.7 252.9 301.2 .3015 May................. . 320.2 308.6 453.9 244.7 249.7 309.1 .3123 June.................. 323.1 310.9 453.9 243.5 249.7 319.1 .3095 July................... 332.0 322.4 453.9 252.6 249.7 328.7 .3012 August........... .. 334.4 325.9 453.9 258.7 251.1 328.4 .2990 September. . ,.. 341.3 335.0 453.9 317.4 252.5 327.5 .2930 October............ 352.8 351.1 453.9 337.3 249.7 334.5 .2835 November. . . . 354.1 353.2 453.9 322.8 249.7 335.9 .2825 December. ..... 352.2 350.5 453.9 325.2 249.7 334.8 .^836 1951 • 359 4 361.5 453 9 365.3 248.0 331.5 .2782 January. . . . ... 355.2 355.0 453.9 331.5 249.7 334.6 .2819 February. . . ,.. 358.4 359.8 453.9 342.8 249.7 334.4 .2790 March............ .. 352.4 349.3 453.9 379.4 248.8 334.3 .2838 April............... .. 361.2 362.6 453.9 398.6 247.5 334.7 .2769 May.................. 365.0 367.0 453.9 410.4 247.5 339.5 .2740 June.............. .. 367.8 372.0 453.9 399.5 247.5 337.7 .2719 July............... .. 366.3 370.1 453.9 382.0 247.5 339.0 .2730 August......... .. 365.1 371.4 453.9 354.0 247.5 329.1 .2739 September. . ... 363.0 369.0 453.9 356.4 247.5 325.4 .2755 October........ .. 358.1 361.1 453.9 350.4 247.5 326.7 .2793 November. . . . 351.1 351.1 453.9 343.8 247.5 323.3 .2848 December. .. .. 349.0 348.9 453.9 335.2 247.5 319.4 .2865 1952 346.4 347.4 453 9 280.6 244.1 317.7 .2887 1953 January.... .. 355.1 357.8 453.9 323.0 247.5 324.6 .2816 February. . . .. 348.0 349.8 453.9 282.9 243.4 318.3 .2874 March.......... .. 344.3 345.1 453.9 273.7 243.4 315.0 .2904 April............. ..342.7 342.7 453.9 276.1 243.4 313.8 .2918 May. ......... .. 342.2 341.8 453.9 279.9 243.4 313.8 .2922 June.............. .. 345.4 346.3 453.9 277.1 243.4 316.3 .2895 July............... .. 347.6 349.5 453.9 273.6 243.4 318.3 .2877 Aug................ .■. 347.9 349.4 453.9 276.1 243.4 320.4 .2874 September. . .. 348.3 350.0 453.9 274.8 243.4 320.5 .2871 October.. .. .. 344.5 344.6 453.9 276.2 243.4 317.8 .2903 November.. ... 347.5 349.3 453.9 274.7 243.4 318.3 .2878 December. .. . 347.9 348.9 453.9 271.5 247 5 321.2 .2874 Jtfhuary........... 344.3 343.2 453.9 February.......... 330.1 321.1 453.9 March............... 325.7 314.3 453 9 April.................. 324.7 312.8 453.9 May................. 321.3 307 8 453.9 1 Average number of persons in a family = 4.9 members. ♦For explanatory note, see the August, 1951, Journal. 271.0 247.5 321.4 .2904 268.8 243.4 322.3 .3029 268 8 243.4 321.6 .3070 268.4 243.4 321.3 .3080 268.2 243.4 320.0 .3112 Subscribe To This Journal To Keep Your Files Complete COLUMBIAN ROPE COMPANY OF PHILIPPINES, INC. HEMP AND COPRA EXPORTERS STEAMSHIP AGENTS ¥ 206 Myers Building Port Area, Manila, P. I. ¥ BRANCHESi Davao • Tacloban • Cebu • Tabaco THE WORLD’S MARCHANT CALCULATOR Wherever speed and accuracy are required, you can always count on a MARCHANT to help you do the job right. Capable of operating at speeds ranging up to twice those of any other calculator, it’s the only Amer ican calculator with dials for verifying keyboard entry. ERLANGER 4 GALINGER, INC. 123 T. Pinpin off Escolta Tel. 3-21-61 256 AMERICAN CHAMBER OF COMMERCE JOURNAL June, 1953 “LET YOUR HAIR DOWN” iiT st°P here,” said the editor, tos 1 sing down the typescript of this month’s Journal instalment of his “Short History” in front of us to read over if we wanted to. “I’m tired,” he said, “and I have a good excuse,—with the elections coming. Anything I would write about the Quirino Administration could be interpreted as an unlawful attempt on my part as an ‘alien’ ALLIS <g>CHALMERS Basic Machinery for the World's Principal Industries UNIT PUMP CONSTRUCTION CUTS YOUR PUMPING COSTS THE CAST-IRON yoke and bracket on the Electrifugal pump is made as a single piece— eliminating a separate adapter. Motor and pump are mounted on a single shaft, assuring perfect and permanent alignment. Installation is easier and quicker. Maintenance is less. The Electrifugal pump, ranging from 10 to 1600 gpm, with heads to 525 feet, is just one of n complete line of A-C pumps for every industrial use. Electrifugal and Texrope are Allis-Chalmers Trademarks Exclusive Distributors MOTOR CONTROLS TEXROPE V-BELT DRIVES POWER EQUIPMENT THE EARNSHAWS DOCKS & HONOLULU IRON WORKS Main Office: Cor. Tacoma & 2nd Streets Port Area, Manila to influence the elections, and you know what the law says about that!” “No,” said we. “What?” “I thought you wouldn’t know,” said the editor tactfully, “and I have written it down here. . . Sec tion 56 of the Revised Election Code (Republic Act No. 180). It reads: “ ‘No foreigner shall aid any candidate, directly or indirectly, or take part in or in fluence in any manner any election.’ Telephone 3-35-11 P. 0. Box 282 Branch Offices al: Bacolod City Cebu City “This was one of the early postindependence enactments, but don’t make too much of that. There was a similar provision in the Election Law, Chapter 18, of the Revised Administrative Code of 1917, for instance. In my opinion, this is an entirely natural, proper, and neces sary provision of law. Foreign in fluence in an election is intolerable in any country and could seriously endanger the national interest...” “But, certainly,” said we, “no thing that you would write in the way of history. . . And after half a life time in the country. . . for many years connected with the Philippine Gov ernment itself. . . could you still be considered an ‘alien’?” “Well,” said the editor, “I don’t feel like one, but, of course, I am not a Philippine citizen, either. I do not have the right to vote. . . I did have that right once, though, but, like most Americans here, I never exercised it. Under the Jones Act of 1916, ‘every male person. . . not a citizen or subject of a foreign power’ and possessing certain quali fications as to age, residence, literacy, property, etc., could vote. Some Americans here did vote and a few were even elected to municipal office in some of the provinces. “It was, sadly enough, the Com monwealth Constitution, adopted in 1936, which formally disenfranchised the Americans here by restricting tne suffrage to ‘male citizens of the Philippines not otherwise disquali fied.’ The ‘Ordinance appended to the Constitution’ gave the Americans only equal ‘civil’ rights which, pre sumably, did not include the right to vote, although I believe this disen franchisement of Americans in a country under the American flag could have been successfully chal lenged. But most Americans here, realizing what a small minority they constituted, were indifferent to voting rights. Also, there was a feeling even in the days of American sover eignty, that the Filipinos should have the right to elect their own leaders without their interference: the Amer ican Governor-General, and later the High Commissioner, were more or less looked upon as embodying suffi cient American participation and representation in the Government. “The local Americans, however, did feel that as they lived in a country under the American flag, they had every right to express themselves in other ways and thus influence the course of the Government, and that right, which was essentially the right of free speech and press, was never questioned by the Filipinos. Local American opinion, in fact, was gen erally given consideration by them and its expression was often invited. June, 1953 AMERICAN CHAMBER OF COMMERCE JOURNAL 257 ‘‘I am sure that the exercise of the right of free speech and press by the Americans here, even in the independent Philippines of today, would be insisted upon by them if that right were ever challenged,— which, in my opinion, is not likely. The American press here has re mained quite outspoken on public affairs during the past few years, and that is as it should be. In so far as that press represents the local Americans, it has, in my opinion, not only the right, but the obligation and the duty, not only toward the Americans, but toward the country itself, to speak out. As among the residents, the inhabitants, the people of the Philippines, they have the right and the duty to make them selves heard in public affairs.” ‘‘That’s all very interesting,” said we, “but why, then, don’t you finish your business history, bring it down to date?” The editor answered: “It isn’t because I think I do not have the right. I have the right to say or to write anything I want to about the Quirino Administration that would not be libelous. From the point of view I have just expressed, this might even be an obligation. In fact, I wouldn’t be surprised if I received a letter from President Quirino ask ing me to do so, as he might be inEVERETT STEAMSHIP CORPORATION GENERAL AGENTS AMERICAN MAIL LINE To and From Portland Seattle Vancouver Tacoma PACIFIC TRANSPORT LINES To and From California Philippines BARBER-FERN-VILLE LINES Service to U.S. Atlantic Via Straits, Suez, Mediterranean FERN-VILLE FAR EAST LINES To and From North Atlantic Ports Gulf Ports—Philippines EVERETT ORIENT LINE Serving the Orient Philippines to China, Japan, Korea, Straits and India Ports PHILIPPINE STEAM NAVIGATION CO. Serving the Philippine Islands 155 Juan Luna St., Manila Tel. 2-98-46 (Priv. Exch. All Lines) terested in what I would have to say. But I think that in that case, with the presidential election coming on, I should respectfully decline to do so. “Frankly, I undertook the writing of that short history of the industry and commerce of the country not only to bring the facts together for the convenience of Journal readers, but also to influence, if I could, Philippine Government policy in that field. I wanted to point out what I believe have been unwise deviations in that policy. But what I would have to say about the period of the Quirino Administration, might be used in the election campaign, and whether for or against the Pres ident, I would not want that. I think the election of their President in the Filipinos’ own business. “Couldn’t you write in a strictly factual and objective way?” “No, I could not. The facts of history are not neutral, like the facts of a physical science. The his torian deals not only with events, but with human action, motives, and aims, good or bad, right or wrong, wise or unwise. As the British his torian, Arnold Toynbee, wrote re cently : “ ‘He [the historian] could avoid making moral judgments only by closing his mind to the meaning of the story; and, if making history ‘scientific* were to be equated with treating human action as if it were non-moral, the result would be in fact to make history meaningless.’ “I hope I am not boring you,” continued the editor, “but Toynbee said another good thing (I ran across this only last night, after I had finish ed my Roxas instalment and had a little time for general reading, but he voiced a caution which I tried to observe): “ ‘But what kind of moral judgments ought the reader to find—and find frankly disclosed—in the historian’s published work? If history can not be written ‘scientifically’ in the sense of eliminating the element of moral judgment in dealing with human acts, it can and should be written fairly. The inescapable necessity of making moral judg ments carries with it an inescapable moral obligation to judge as justly as human nature can; and this means doing one’s best to live up to several universally recognized rules. One must try to detect one’s own malice and passion (if one is in any degree moved by malice or passion) and must do one’s best to make oneself rise above them. One must assume that there are likely to be two sides to a case, and one must take particular pains to make sure that one is informing oneself and one’s reader about the side which, in the historian’s personal opinion, is in the wrong or for which short of that, one is conscious of feeling less sympathy than one feels for the other side. One’s duty, in fact, is to make one’s .inevitable judgments as charitably and dispassionately as one can on the widest possible basis of facts and of considerations about them pro and contra, and to communicate the results to the reader in 'parliamentary language’— that is, in words calculated, not to excite passion or prejudice, but to avoid arousing it.’ “I tried to do that,” said the editor. “There were places in the story, believe me, where I had to hold my self in.” A n American Embassy official told us that he “got a great kick” out of the editorial in the April Journal on “The Animadver sion of Mr. Henry R. Luce.” A marked copy of this issue was sent to Mr. Luce at Rockefeller Center, New York, but no response has yet been received by us. *the editor came to us on theA Wednesday morning after the Tuesday of Queen Elizabeth’s coro nation in London and the big party given by the British community here at the Manila Hotel. He had a news paper in his hand, and said, “It says here that the guests had the good old roast beef of England and champagne. Heck, I was there, but I lost out on that because I left after about an hour. I had several drinks of scotch and water and some stuffed hard-boiled eggs and cheese-sticks, but I missed the famous roast beef and the champagne.” “Well, what did you have to leave for? Why didn’t you stick around?” “I wanted to get home and turn on my Hallicrafter and listen in on •DUMP YOUR TRAVEL WORRIES OVERBOARD! for carefree travel at its best. . . consult Uy Yet Bldg., Dasmarifias Manila Tels. 2-69-56—2-69-59—2-69-50 258 AMERICAN CHAMBER OF COMMERCE JOURNAL June, 1953 the real thing. I was in time to get the actual crowning, the prayers, the choir singing, the trumpet fanfares, etc. It was a moving thing, even over the radio. There was a reson ance that suggested the vastness of the Abbey and a background of sound that could only come from a great assemblage of people. It was not difficult to envisage the whole splendid scene. I am glad I heard what of the whole thing I did hear, even if I was not in the Fiesta Pa vilion at the Hotel to join in the toast to the Queen. I owe my British hosts an apology for that, but I am sure they will forgive me if they under stand why I left early.” An American Army officer wrote in to say, referring to the “History”— “I found your May instalment in the Jour nal most interesting. ^Having been on the staff at Malacanan for nearly three years, 1946-49,1 naturally look forward to your next article.” This “next article” is that published in this issue. We hope that it meets expectations. As has already been stated else where in this column, the “Short History of Industry and Trade in the Philippines” ends with the instal ment on the Roxas Administration published in this issue of the Journal. Many readers during the past months have expressed an interest in a pos sible reprint of the series in book form. Such a book would run to around 300 pages and the cost of the project has to be taken into consid eration. It would help those who have to make the decision whether or not to reprint, if the Journal Office received a sufficient number of advance orders for the book to in dicate that the cost would be covered. The author himself,—our worthy editor, is not at all eager to have the series reprinted in book form, because, he says, what he did was to write some articles and not a book, which is different. He says a book must be better integrated, must be more of a unit, than a series of articles can be, and that the separate articles of a series are not the same as the different chapters of a book. He also said that in having to meet the printers’ dead-line every month, he was working under pressure and had to write too hastily. Then also, he said, he was up against space restric tions and had to condense too much and leave out too much. “In short,” he said, “though I worked like hell, I am not satisfied with the result.” To which we say that all he said may be true, but that the fact re mains that he has done something no one else had as yet done, that he brought ou. a great wealth of infor mation not readily found elsewhere, that this was all presented in an orderly way to bring out certain historical trends, as well as deviations therefrom, together with a wellpointed moral for the Government, and that in some of his articles, especially those on the Japanese occupation, he did much original work, telling a story that had not been told and which might never have been told but for him. So, folks, let us know whether you would want the book and how many copies. Index to Advertisers American Steamship Agencies............... 254 Atlantic, Gulf 8s Pacific Company of Manila........................................................ 245 Caltex (Philippines) Inc......... 244 Colgate-Palmolive Philippines, Inc......... 248 Columbian Rope Co. of Philippines, Inc................................................................ 255 Earnshaws Docks 8s Honolulu Iron Works.......................................................... 256 Engineering Equipment 8s Supply Co.. . 242 Erlanger 8s Galinger, Inc......................... 255 Everett Steamship Corp.......................... 257 Getz Bros. 8s Co......................................... 258 Goodrich International Rubber Co........ 247 Heilbronn, J. P. Co................................... 251 Insular Lumber Co.................................... 243 International Harvester Co. of Philip pines ....................................Inside Back Cover Luzon Stevedoring Co.............................. 254 Macleod 8s Co. of Philippines.............. 254 Manila Broadcasting Co.......................... 249 Manila Electric Co.................................... 221 McCullough Printing Co......................... 253 Motor Service Co.............................. 253 Nell, Ed. J. Co........................................... 252 Neuss, Hesslein Co..................................... 252 Pacific Far East Lines............................. 251 Pacific Merchandising Corp.................... 246 Pasig River Bodegas................................. 250 Philippine American Drug Co............... 250 Philippine Education Co.......................... 249 Philippine Manufacturing Co................. 241 Sharp, C.F. 8$ Co., Inc............................ 257 Standard Vacuum Oil Co. Inside Front Cover Tide Water Associated Oil Co................... 253 U. S. 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