The fact that one of his first official acts was to recommend the passage of the Dyer Bill, which has just been passed by the House of Representatives, shows that he is deeply interested in the interests of the American organizations operating in foreign fields.

The American Chamber of Commerce Journal feels sure that in congratulating Mr. Hoover on his appointment and in wishing him every success in his new undertaking it is reflecting the sentiment of all the Americans in the Philippine Islands.

Chamber Activities

The largest job the American Chamber of Commerce has on its hands is the co-ordination and compromising of human ideas and ideals affecting the life of the American community in the Philippines. The ideals have been brought from the homeland and are in constant conflict with political and business questions arising here. Politics should be the hand maiden of business but unfortunately in the Philippines business is the hand maiden of politics and, as political questions come and go, so comes and goes business and with the coming and going of business the health, happiness, comfort and prosperity of the community varies. There is no stability and in the effort to obtain stability comes the necessity for the co-ordination of ideals and ideas. Futile idealism seems to be the predominating characteristic of the country and with it comes a wealth of ills to be remedied.

Some considerable criticism has been directed against the Chamber for its apparent interest in political questions but careful thought on the part of the reader will no doubt convince him that almost every business question is affected by the political state of the country and that anything that is done to remedy business conditions will find its way into political offices.

The passage by the chamber of the territorial resolution asking for "a territorial government under the sovereignty of the United States of America" is its effort to create a stable political system upon which stable business can be built up.

The resolution requesting the fortification of Guam and its establishment as a strong naval base had for its object the protection of the territorial government and the security of the flag in the East. The resolution covering the removal of the dry dock Dewey to a place in the rear of the protecting guns of Corregidor was another effort for security and the economic functioning of the dock in the repair of the new merchant marine of the United States.

The resolution covering the actions of shipping board sailors in this port and other ports of the Far East had for its object the betterment of the merchant fleet and the preservation of the prestige of the United States in all the ports of the world.

The resolutions and efforts of the Chamber in the matters of exchange, interest, finances and currency were for curing impossible conditions slowly sapping the lifeblood of the community.

The effort made to settle the newspaper strike had for its object the preservation of the right of free speech and opinion.

The installation of Judge Williams in Washington as the representative of the Chamber was for the purpose of correcting unfair discrimination, directed without proper thought, against Americans resident in the Philippines.

The appointment of a representative Committee of business men for the purpose of devising proper statements of what the American Community wanted is an effort to help the Commissioners now here to get the American position in matters affecting their future in the Philippines.

The resolution of the Chamber on the dilatory tactics of the Philippine government in meeting its current obligations to business men and the consequent executive order by Governor Yeater was for the purpose of healing a very stringent necessity of the business community to cover its obligations as quickly as possible.

The resolution of the Chamber advocating the consolidation of the charitable efforts of the community insofar as they affect Americans is for the purpose of economy and fairness to those of us who fall by the wayside in this acute period of depression.

The resolution covering the deplorable condition in hemp and the suggestion of a remedy was an effort to cure a situation which is affecting every business in the islands, as hemp is the basic article

of export and any disturbance in its steady movement is reflected immediately in our credits abroad.

The provision of a centrally located meeting place for the membership is for the purpose of exchanging views and the elimination of radical thought on the many perplexing questions up for the community to solve.

The institution of weekly addresses is for the purpose of disseminating useful information and the contact of the community with worth while outside ideas.

There has been so much done during the weekly sessions of the Board of Directors that space forbids its publication but a knowledge of what has been done can be obtained by any member in looking over the minutes of the meetings on file with the secretary, a copy having been provided for this special purpose.

-H. L. HEATH.

THE AMERICAN COMMUNITY

(Continued from Page 8)

The political and business slogan of the American Chamber of Commerce: "A territorial form of government under the Sovereignty of the United States," is the end of the fourth phase of Americanism in the East.

The fifth phase of the American Community is in the future, and its future is definitely dependent upon the American Merchant Marine, as was its first phase. Our trade will either rise or fall and it will depend entirely upon the implements of movement. As these implements increase, American business and the number of individuals of the community will increase, and as the implements of movement-the merchant fleet-decrease, so will business and the number of individuals decrease. The future commenced with the arrival of Governor Forbes and General Wood, both of whom are now busy writing the future of the American Community in the Philippines. We hope they will recognize that the seat of American prestige, the entering wedge of American Commerce in Asia, is the Philippines; that the Governor-General must not be secondary in importance to the Ambassador of Japan and the Minister of China, that he is the keystone to the arch of American prestige in the entire Orient; that the Philippines are a business proposition, not a political one; that the health, wealth, happiness and comfort of the Filipino people depend upon years of proper schooling and that government is safe in their hands only when they are truly Anglo-Saxonized; that political Governors-General have been proven inadequate, the business administration of Governor Forbes and the political administration of Governor Harrison proving this; that the best men in the United States are not too good for Governors; that the American Community wants and prays for such men as Wood, Forbes, and Hoover to be sent here.

Men smaller than these are impossible.

MEMBERSHIP IN THE AMERICAN CHAMBER OF COMMERCE

At the present time there are one hundred and twelve active members, six hundred and fifteen associate members and two hundred and eighty-one affiliate members in the American Chamber of Commerce of the Philippine Islands.

The initiation fee for active members is P1,000.00; for associate members it is P25.00 and for affiliate members P2.00. The dues for active membership are P10.00 per month; for associate membership P5.00 per month and affiliate members pay no dues.

OUR NEXT NUMBER

The next issue will be published June 25th. Among the feature articles will be "The Present Piece Goods Situation" by R. A, McCrory, President of the Insular Commercial Company, Ltd., and "Pearl Button Manufacture in the Philippines" by John R. Wagner, of the Pacific Commercial Company.

The July issue will contain a new photographic section under the heading "Interesting Activities in the Philippines," which will feature the visiting delegation from the Pacific Northwest.

A

COMPLETE analysis of the needs of the Philippine Islands for the development of her commerce is entirely too long for the purposes of this article. In dealing with this subject, it is necessary to take into consideration the entire commercial situation, as well as the future possibilities of commercial development. This, because of the tremendous latent possibilities of the great virgin lands of the Philippine Islands, is a difficult task, requiring extended experience and detailed observation. Owing to my being a comparative stranger, I am not as well informed as are many of the readers, but I may be able to present a few facts of interest which have escaped observation, because a new eye may see that which an accustomed eye may overlook because of long association.

As these Islands are dependent to a great extent upon the United States for machinery, textiles, canned goods, and manufactured articles, one can readily see the great importance that is attached to the efficient and economic handling and re-handling of these commodities. Not only is Manila at a decided disadvantage in the handling of these commodities, because of her inadequate facilities, but the outside territories, which are dependent upon Manila as their transhipping point, are a great deal more handicapped, since they must put up with the conditions at Manila, and Inter-Island transportation situation as well as with their own local lack of facilities. This unsatisfactory situation places an unnecessary tax on all imported articles sold to residents of the Islands; and not only this, but the freight for transportation on Inter-Islands vessels is entirely too high, caused primarily by the lack of proper shipping facilities at the port of Manila and at the out ports of the Islands. These conditions place the consumer at a tremendous disadvantage, as he is required to pay proportionately his share of the excessive and inefficient handling costs and insurIt also imposes an unnecessary tax upon production, the cost of which must, of necessity, be very much higher than it should be. The products of the Islands, for example, hemp, sugar, and copra, must be sold in the world's markets in competition with corresponding products of other lands. Granting that this is the case, it must be readily seen that both the handling of incoming cargo and of outgoing cargo play a tremendous part in the marketing of the unlimited products of these Islands. The producer is shipping at a decided disadvantage, because the prices of his commodity are established by the world's markets, a condition over which he has absolutely no control. Ás a result, therefore, the producer, in order to sell his products, must sell at the market

ance.

price and absorb all costs of handling, freight, insurance, and bear all risks. This being the case, too much stress cannot be laid on the importance of educating the entire populace of the Islands in the importance of efficient port facilities.

As

No matter how many vessels are operated in the local trade, or how many ocean-going ships call at the ports of the Philippine Islands, the situation will not be improved unless the port facilities are such as to allow freight to be loaded and discharged in the best, most economical and expeditious manner. It has been proven by past experience that, unless proper termini are available, it is impossible to operate vessels economically, and the vessels and trade will go to those places, which, in addition to their commer cial resources and economical wealth, also have the proper port facilities for the loading and discharging of their cargoes. an example, it may be cited that plans are now being considered by the States of New York and New Jersey for the expenditure of millions of dollars in providing New York City with a unified, modern terminal system, so that cargo can be transferred from ship to ship or rail to water with the least possible confusion, delay, and expense. These plans, if carried out, will create a terminal that is amply sufficient to care for all the needs of the port of New York, and will be capable of indefinite expansion without further alterations of the main terminal system and plan of operation. No better example than this can be given of the truth of the maxim that a transportation system is only as strong as its termini. It is an economic blunder to operate a port with inadequate or antiquated machinery and facilities.

In discussing the development of Philippine ports to meet their present requirements and further needs, I wish to make it plain that I do not believe in expending a great amount of money at one time, far in advance of the actual necessities of the moment. The proper method is, to first lay out a plan to be followed which will meet the present requirements, and which will be capable of expansion to meet the demands of future commercial development and growth; and to build the only necessary docks, wareIn houses, and other facilities as needed. this way the port will always be modern, this being the most important feature in port development, and the determining factor in holding its position in the commercial world.

We must bear in mind that, no matter whether the Philippine Islands remain an American possession or obtain their independence, because of the present relationship between the United States and the Philippine Islands, and the influence of American

ideals and ideas, Manila will always be regarded as the American port of the Far East, and the Philippine Islands will always be one of our primary sources of those supplies which are so badly needed by the United States in its industrial and commercial development. Because of these things, it is the duty of the United States to further the development of the Philippine Islands, and particularly that of Manila, for their own best interests, and Americans in these Islands, or interested in them, must take a more active interest in improving this situation, and take the initiative in the installing of improvements.

The port of Manila, in addition to its preeminence in the Philippine Islands, has now the opportunity of becoming one of the most important ports in the Far East. This is the result of the present economical situation, the recreation of the American Merchant Marine, and of what is the greatest importance, the fact that Manila will not be held back in its future development by past con struction, which must be scrapped at a great expense in order to create a modern and efficient port. When considering the necessity for, and the proper development of, the port of Manila, one must take into consideration that the leading ports of the world are International Termini, and are considered in no other way. Of course terminals and port facilities must be developed, in order that the greatest good can be derived therefrom, to the benefit of local conditions; however, we must not lose sight of the fact that the termini that are accommodating deep water vessels, carrying freight to and from the world's markets, are of International interest and importance. In developing the port of Manila, which, because of its geographical situation its own wonderful productive possibilities, its untouched hinterland, and its relationship to the other the other wonderful productive countries immediately adjacent, such as China, Cochin-China, Java, Celebes, etc. the problem of internationalizing the port of Manila must be seriously taken into consideration. At the present time there is practically no Philippine deep water shipping, and therefore Manila is, in the strict sense of the word, an International port, because only vessels of other nations ply back and forth, from and to the outside world. The problem is one of tremendous proportions, and therefore is one that requires a great amount of serious thought, The study, and research by capable men. study of the development of the port of Manila should be made from the basis of standardizing its facilities, as nearly as possible with a view of meeting the most modern requirements of today. The port facilities must of necessity keep abreast of the tremendous advancement in ship construction.

In this connection it may be mentioned that shipping authorities prophesy the use of the 30,000 ton vessel on the Pacific. No better example of this can be brought to the attention of the readers, than to ask them to visualize the situation of a very old vessel handling cargo, in comparison with the handling by latest and modern ships of today. If we are to expend huge amounts of money for the developing and keeping abreast of the times in ship construction, it is quite evident that these vessels must, because of their modern appliances, etc., do business with modern ports. Therefore, if Manila is to expect its trade to be developed to the highest point of efficiency, it must meet the requirements of the modern vessels. In the United States, England, Japan, etc., in the past few years, vast improvements have been made, and are still going on today. One may visit various shipyards, and in comparing the shipyards, take cognizance of the wonderful changes. The art of building ships is of course one that will continue its advancement in keeping with the progressive strides of other engineering sciences and, therefore, in planning for Manila's future development, I reiterate it as my opinion, that the plan only should be accepted for the future, and that we should never jeopardize our position by building too far in advance, or at the wrong time, in trying to keep abreast of the times.

International

izing the port also means that it will draw through the Feeder Services from the adjacent countries, and the future of Manila will be determined by its drawing power as an assembling, distributing and transhipping point. My belief is that it is extremely feasible to expect, that Manila will be developed as the greatest transhipping point in the Orient, and I see no reason why it should not be; however, unless the port is internationalized to the extent of being capable of expeditiously and economically handling vessels from all nations of the world, and unless it is always kept up to modern standards, this feat will never be accomplished. If Manila is to take and hold the position to which she is justly entitled as a premier port, by reasons of her geographical situation with reference to the continent of Asia, to Japan, and to the Malayan Islands, and to the enormous natural resources of the Philippine Islands themselves, her port facilities must be modernized, and the operation, regularegulation, and management must conform with international customs and requirements. In recent years many of the large steamship companies of several nations have taken great interest in the Islands and have made tentative proposals for improving the port of Manila for their mutual benefit, but that interest was apparently not reciprocated on the part of Manila. This attitude is wrong. Under the present strenuous competition, if a steamship company cannot obtain efficient facilities at a port, that port, of necessity, may be eliminated as a major port, and not be relied upon as a base of operation.

The recent proposed law creating a Board of Harbor Commissioners for the port of

Manila was an effort in the right direction. Efforts of this sort should receive the hearty support of everyone, as all are in a position to aid in some manner, and can, at least, indicate their desire for the improvements of the port. It is of no avail to build the most modern port facilities, if, after they are constructed, the management is not efficient, and it is not possible to economically operate a port which has not the proper facilities. These two features are inseparable.

With regard to the outlying ports, the Philippine Islands have been most fortunate in the fact that nature has constructed a number of fine natural harbors; but, no matter how perfectly nature has done its work, without the proper facilities, the most natural harbor in the world is of but little value. The efforts made to improve the smaller ports in the Philippines have not been successful, since, as a rule, insufficient funds have been appropriated to start them in the right direction, and such funds as have been appropriated were in driblets, so that improvements have been made erratically, and apparently not based on a comprehensive plan. This has resulted in an expenditure of public funds without commensurate results. It appears to me that if the Philippine Government desires to develop the latent resources of her unoccupied lands, as is indicated by her activities in advising young men to establish homesteads, it is necessary in the first place that she stand the initial expense of building suitable ports, and installing facilities, which will enable these pioneers to market their products after they have improved the land and have something to sell. They must be encouraged. If they are not, stagnation will set in to the decided disadvantage of all concerned. No matter how earnest his efforts are, a man's work will be wasted because of the lack of facilities, and the excessive cost of placing his products on the market in competition with other districts and countries. After the ports are developed the district should be charged with the duty of maintaining the facilities and improving them from time to time. I am sure that this can be done, because, from my own observation, I find, in many instances, that money is wasted by the shippers in paying excessive and unnecessary handling charges, that could be utilized in maintaining modern and efficient terminals. A portion of this money, if collected in port charges at an efficient terminal, could pay for its operation and even ultimately refund the initial cost with interest. The excessive The excessive freight charges and delays are a tremendous handicap on products shipped from the smaller ports, and many of these are unable to compete in the world's markets, except during periods of excessively high prices. This situation also affects the Philippine Government by reducing its income, since its income tax is based on net profit. If modern methods had been applied, this would not be the case, and, even at this date, the situation can be saved by prompt and efficient action which would benefit everyone in the Islands, increase the financial resources, and

stimulate trade, to such an extent that the government income therefrom will ultimately be on a firm foundation.

By the proper development of the outlying ports, the Inter-Island steamship service will be improved to the benefit of the shipper and to the shipping companies. At present the freight rates are extremely high, because of the excessive delays and cost of handling the cargoes. Many of the ports are so geographically situated that, if modernized, it would only be a small diversion for large oceangoing vessels to call for freight; but, under the existing conditions, this is impossible, except in the cases of one or two ports, and the situation at those ports is such that the delays incident to loading and discharging freight is so great, that an additional charge is made, or else vessels refuse to call except for very large quantities of cargoes. By enabling ocean-going vessels to call at the smaller ports, the opportunities of the adjacent territory will be greatly improved and their development insured, as their products will not suffer from the present handicap of high freights and handling charges, and the cost of imported articles will not be so excessive.

It has been my purpose to set forth some of the features that appear to me to be of the most vital importance, before the Philippine Islands can ever hope to acquire a real and lasting prosperity, as well as economic commercial independence. This situation has existed for many years, and, because of this fact, it may have ceased to appear of such vital importance to those who have

long resided here. As a result of my recent trip to the Southern Islands, the necessity of improvements has been most forcibly impressed upon me, together with the firm belief that the importance of this matter should be firmly impressed upon everyone of the necessity of combining their efforts; and that we, as Americans, and particularly the American Chamber of Commerce, should put forth every effort to assist in improving and in remedying this situation.

English Attempts to Revive Vegetable Oil Industry.-Measures are under consideration in England to resume their vegetable oil industry, which was temporarily suspended as a war necessity. During the war, oil mills sprang up at the sources of raw material, and in India, the crushing of seeds and copra for their oil has developed into an industry. The English want to take back the industry by either of two methods, namely, a preferential duty on export of oil seeds and copra from other members of the British Empire especially India, a source of vast supplies of oil seeds or the adoption of a system of rationing and licensing for exports of seeds from India with duties on importation of oils and fats into the United Kingdom. Of oil seeds alone, in normal years, India produces over 5,000,000 tons, worth about £50,000,000. About one-third is usually exported.

ment of American enterprise abroad, for the inevitable loss to our producers and manufacturers at home, and for the diminution and possible elimination of American influence as a factor in world trade and commerce? The logical effect of this tax, if continued, must be to drive our citizens out of foreign communities where they cannot compete on even terms, or to give them a substantial inducement to acquire a citizenship less burdensome than ours. These consequences, through the law of diminishing returns, would eventually defeat the purposes of the Act,-without, however, repairing the damage already accomplished. On the other hand, the suggested exemption will not only tend to greatly stimulate our foreign trade, but will, through the increased revenue derived from profits realized by domestic concerns interested in such trade, much more than compensate the government for any loss suffered from the other source.

A patent illustration of the injustice and harm worked by this Revenue Act of 1918 will be found in its application to Americans residing and doing business in the Philippine Islands. Upon this phase of the subject your speaker pretends to speak with authority, having lived and done business in the Islands for twenty years.

To properly appreciate the disaster which now threatens American business men in the Philippines, and through them the trade and prestige of the United States throughout the entire Orient, a brief survey of what has thus far been accomplished in the Islands, and what they promise for the future, is desirable.

Upon American occupation the import and export business of the Philippines was almost entirely in the hands of foreign houses, who had every advantage of experience and trade connections in their favor. In the years between, however, American business interests have not only fought their way to a leading position in such trade and largely increased its volume, but have diverted the bulk of it to our markets. In 1899 the total imports and exports of the Philippines amounted to $34,034,568, of which but $5,388,341 was with the United States. In 1920 the total trade of the Islands amounted to $300,567,139, of which $197,567,139, or over 65%, was with the United States.

Given their strategic location and potential resources, the Philippine Islands have been pronounced by experts to be the richest and most favored tropical dependency in the world. It was Captain Robert Dollar, the far-sighted pioneer in Oriental trade expansion, who recently said: "The greatest field in the whole world for commercial development is China, with its population of a third of the earth's total inhabitants." The Philippines front directly upon this great territory, with opportunity to share in its tremendous commercial possibilities. They lie on the direct trade route between British India on the West, Australia, Oceania, and the Dutch Indies to the South, and China, Japan, and Siberia to the North,-being at the crossroads of one of the greatest trade routes of

the world. They are assured abundant water transportation and reasonable freights by direct steamers to the United States and Europe, whether plying trans-Pacific or via the Panama and Suez canals. Manila has a deep-water, protected harbor, where ships of any draught can load and unload at substantial docks. One half the population of the globe lives within a radius of three thousand miles of the Islands. Hong Kong, Amoy, Shanghai, Nagasaki, Kobe, Yokohama, Saigon, Bangkok, Singapore, Batavia, Surabaya, and other important centers of population, all lie within a radius of fifteen hundred milesor five days' sail of Manila.

The Islands now produce or can produce practically every tropical product known to commerce. Sugar, copra, hemp, maguey, rubber, tobacco, rice, cacao, rattan, resins, tan-bark, spices, etc., are all successfully grown. There are also immense stands of the finest hard-woods, the demand for which in the world's markets is steadily increasing. In 1919 the United States imported tropical products aggregating in value over a billion and a half dollars, for practically all of which we were and still are dependent upon the goodwill and tariff regulations of foreign countries. In the one item of rubber alone, which enters so largely into our commercial life, the United States consumes about seventy-five per cent of the world's production, and controls less than five per cent of the sources of supply,a situation extending to many other essential tropical products. Of the tropical domains of the earth European powers now own fiftynine per cent; some 40.38 per cent are independent, while the United States controls less than one per cent. In the Philippines, however, the United States now has a latent source of domestic supply for tropical products sufficient to satisfy the wants of our people and liberate us from dependence upon foreign countries. Not only this, but such Islands furnish us an incomparable trade base for reaching and supplying the increasing needs of the teeming millions of the Orient and South Seas.

The United States Bureau of Foreign and Domestic Commerce, through its trade commissioner Paul Page Whitham, has already made a comprehensive survey of the harbor facilities and possibilities of Manila Bay, with the idea of creating at that point a great commercial and shipping center for American products. An inter-departmental committee, composed of representatives of the Shipping Board and the War, Navy, and Commerce Departments, has also made, or is now making, a detailed study of the project of making Manila an outpost for America's developing interests in the Pacific. The Wood-Forbes mission, recently sent to the Philippines to investigate local conditions, will also study investigate local conditions, will also study and report upon the wider phases of the situation as they affect the security and welfare of the American and Filipino peoples. Now that the pendulum of world interest, commercial and political, is steadily swinging to the Far East, it is becoming increasingly apparent that the Philippines are the keystone of Amer

ica's Oriental policy, and furnish a vantage point from which our country can play a leading rôle in the tremendous drama now unfolding in this new theatre of events.

What then of this Revenue Act of 1918 in its application to American business men in the Philippines, and to the plans and hope indulged for making of such Islands a base for our commercial expansion in the Orient? We state advisedly that unless the discrimination now worked by such Act to our Philippine interests is promptly and effectually relieved, the inevitable consequence will be to paralyze and destroy existing accomplishment, and render abortive every project formulated or in prospect for the future. What has transpired and is now transpiring is this:

The income tax rates of the 1918 Revenue Act were not extended to the Philippines, it being specifically provided that the rates of the 1916 Act, or such others as might be substituted therefor by the Philippine Legislature, should apply. Inasmuch as all taxes collected in the Islands accrue to the Insular Treasury, to have applied the excessive rates of the 1918 Act would simply have compelled Philippine business interests to contribute to their own treasury an amount in excess of their needs or their ability to pay. In consequence of this the normal income tax rate in the Philippines for 1918 and 1919 continued at two per cent, with a maximum surtax of thirteen per cent, while at present the normal rate is three per cent and the maximum surtax twenty per cent. As against this the normal rate in the United States for 1918 was twelve per cent, and thereafter eight per cent, with a maximum surtax throughout of sixty-five

per cent.

The Philippines tax being general in its application, no discrimination is worked against Americans when considered simply as residents of the Philippines; in that regard they are on an equality with others doing business in competition with them. As citizens of the United States, however, their equality ceases. This Revenue Act of 1918, applying as it does to American citizens wherever resident, reaches around and seizes them in that capacity to the exclusion of their competitors of other nationalities. In other words, Americans are held liable for the exorbitant rates of the United States Act, while Filipinos, Britishers, Germans, Japanese, and trade rivals of every race and color, go their way unmolested. As these latter pay no tax to their home governments upon their Philippine income, it results that in our own dependency, and under our own flag, we penalize our own countrymen in favor of foreigners--to whom we owe no special obligation whatsoever. Certainly this injustice is not based upon any theory of special protection afforded our citizens in the Islands. The Philippines are domestic territory of the United States, and Americans enjoy no benefits and receive no protection from American sovereignty in the Islands which are not shared equally by Filipinos and resident aliens. The enforcement of this tax against one element of the community, therefore, to the exclusion of others engaged in the