The Story of the Philippines Part 9

Monopolies:

1st. Opium Contract $ 576,000 2nd. Stamped Paper and Stamps 646,000 ---------- Total $1,222,000

Lottery:

1st. Sale of Tickets, Less Cost of Prizes $ 964,000 2nd. Unclaimed Prizes 30,000 3rd. Sundry Receipts 6,000 ---------- Total $1,000,000

Income of Government Property:

1st. Forestry Privileges $170,000 2nd. Sale and Rent of Public Land and Buildings 85,000 3rd. Mineral Privileges 2,000 -------- Total $257,000

Sundry Receipts:

1st. Mint (Seignorage) $200,000 2nd. Sundries 98,300 -------- Total $298,300

The largest source of income is the Cedala or Poll Tax. Every man and woman above 18 years of age, residing in the Philippines, whether Spanish subject or foreigner, is required to have in his or her possession a paper stating name, age, and occupation, and other facts of personal ident.i.ty. Failure to produce and exhibit this when called upon renders anyone liable to arrest and imprisonment. This paper is obtained from the internal revenue office annually, on payment of a certain sum, varying, according to the occupation and income of the person from $0.75 to $20.00, and averaging about $3.00 for each adult. An extra sum of 2 per cent. is paid for expense of collection. The tax is collected at the Tribunal in each pueble, and 20 per cent. is retained for expenses of local administration, and 80 per cent. paid to the General Treasury. This tax falls heavily on the poor and lightly on the rich. The tax on industry and commerce is similarly graded according to the volume of business transacted by each merchant or merchantile corporation. The tax on real estate is absurdly low and levied only on munic.i.p.al property and on the rent, not the value.

The tax on imports is specific and not ad valorum; it amounts to about 13 per cent. of estimated values. The free list is very small, nearly everything of commercial value which is imported being subject to duty. The revenue from imports has increased from $566,143 in 1865, to $3,695,446 in 1894. It was about the same in 1897. On the other hand the export tax, which was nothing in 1892, the loading tax, which was nothing in 1893, and the unloading tax, which was nothing in 1894, have all been increased in the last few years in order to meet the expenses of suppressing the insurrection. These three items yielded nearly $2,700,000 in 1897.

The monopoly of importing and selling opium is sold, by auction, to the highest bidder for a term of three years. The present contract runs until 1899, and yields $48,000 per month.

Every legal doc.u.ment must be drawn up on paper containing a revenue stamp, engraved and printed in Spain, and every note, check, draft, bill of exchange, receipt or similar doc.u.ment must bear a revenue stamp in order to be valid. These stamps and stamped paper yielded a revenue of $646,000 in 1897.

The lottery is conducted by the Government--the monthly drawings taking place in the Treasury (Hacienda) Department. The sale of tickets yielded $1,000,000 over and above prizes in 1897.

In a report to General Merritt, on August 29th, I recommended that the opium contract be cancelled and the lottery abandoned during our occupation of Manila; and as the poll tax and the tax on industry and commerce had been paid for the most part in the early part of the year, our chief sources of revenue were from the custom house, the sale of stamps and stamped paper, and the sale of such licenses as the law allowed (amus.e.m.e.nts, liquor saloons, etc.), for the benefit of the city of Manila as distinguished from the general revenue. I estimated the total at about $500,000 per month.

The expenses of administering the military government of occupation (apart from the expenses of the army) will consist of the current expenses of the office at the Provost Marshal General's office and its various bureaus--at the custom house, internal revenue office, and other offices--and the salaries of interpreters and minor employes who are anxious to resume work as soon as they dare do so. An estimate of these expenses was being prepared at the time I left, but was not completed. It can hardly exceed $200,000 per month and may be much less. This should leave $300,000 (silver) excess of income per month, to go towards the military expenses of occupation.

As soon as it is decided that we are to retain the islands it will be necessary to make a careful study of the sources of revenue and items of expenses for all the islands, with a view to thoroughly understanding the subject, before introducing the extensive changes which will be necessary.

Currency.

The standard of value has always, until within a few years, been the Mexican milled dollar. The Spanish dollar contains a little less silver and, in order to introduce it and profit by the coinage, the Spaniards prohibited the importation of Mexican dollars a few years since. Large numbers of Mexican dollars remained in that country, however, and others were smuggled in. The two dollars circulate at equal value.

All valuations of goods and labor are based on the silver dollar, and a change to the gold standard would result in great financial distress and many failures among the banks and mercantile houses in Manila. Their argument is that while an American ten-dollar gold piece will bring twenty-one silver dollars at any bank or house having foreign connections, yet it will not buy any more labor or any more hemp and sugar from the original producer than ten silver dollars. The products of the country are almost entirely agricultural, and the agricultural cla.s.s, whether it sells its labor or its products, would refuse to accept any less than the accustomed wages or prices, on account of being paid in the more valuable coin. The result of the change would be that the merchant or employe would have to pay double for what he buys, and would receive no increase for what he sells. While trade would eventually adjust itself to the change, yet many merchants would be ruined in the process and would drag some banks down with them.

The Mexican dollar is the standard also in Hongkong and China, and the whole trade of the Far East has, for generations, been conducted on a silver basis. j.a.pan has, within the last year, broken away from this and established the gold standard, but in doing so the relative value of silver and gold was fixed at 32 1/2 to 1, or about the market rate.

Public Debt.

I was unable to obtain any precise information in regard to the colonial debt. The last book on statistics of imports and exports was for the fiscal year 1894, and the last printed budget was for 1896-7, which was approved by the Queen Regent in August, 1896. Subsequent to this date, according to the statements made to me by foreign bankers, the Cortes authorized two colonial loans of $14,000,000 (silver) each, known as Series A and Series B. The proceeds were to be used in suppressing the insurrection. Both were to be secured by a first lien on the receipts of the Manila custom house.

Series A is said to have been sold in Spain and the proceeds to have been paid into the Colonial Office; but no part of them has ever reached the Philippines. Possibly a portion of it was used in sending out the 25,000 troops which came from Spain to the Philippines in the autumn of 1896.

Series B was offered for sale in Manila, but was not taken. An effort was then made to obtain subscribers in the Provinces, but with little or no success. The Government then notified the depositors in the Public Savings Bank (a branch of the Treasury Department similar to the postal savings bureaus in other countries) that their deposits would no longer be redeemed in cash, but only in Series B bonds. Some depositors were frightened and took bonds, others declined to do so. Then came the blockade of Manila and all business was practically suspended.

No printed report has been made concerning the debt, and I was unable to obtain any satisfactory statement of the matter from the treasury officials.

The exact in regard to the Series A bonds can be learned in Madrid; but it will be difficult to learn how many of Series B were issued and what consideration was received for them.

As already stated, both series of bonds rest for security on the receipts of the Manila custom house.

Spanish Troops.

The Spanish prisoners of war number about 13,000, including about 400 officers. The infantry arms are about 32,000, the greater part Mauser model 1895, caliber 28, and the others Remingtons, model 1889, caliber 43. The ammunition is about 22,000,000 rounds. The field artillery consists of about twelve breech-loading steel guns, caliber 3 5-10 inches, and ten breech-loading mountain guns, caliber 3 2-10 inches. There are six horses (ponies) for each gun, but the harness is in bad order. Ammunition, about sixty rounds per gun, with possibly more in the a.r.s.enals. There are about 500 cavalry ponies, larger than the average of native horses, with saddles and equipments complete. There is also a battalion of engineers. The fortifications of the walled city are a fine sample of the Vauban type, on which military engineers expended so much ingenuity 150 years ago, and of which Spain possessed so many in her Flemish dominions. The first walls of Manila were built about 1590, but the present fortifications date from a short time after the capture and occupation of the place by the English, in 1762-64. They consist of bastions and curtains, deep, wet ditch, covered way, lunettes, demilunes, hornworks, and all the scientific accessories of that day. They are in a good state of preservation, and mount several hundred bronze guns, but they are chiefly of interest to the antiquarian. On the glacis facing the bay, and also on the open s.p.a.ce just south of the walls, are mounted 9-inch breech loaders, four in all, made at Hoatoria, Spain, in 1884. They are well mounted, between high traverses, in which are bomb-proof magazines. These guns are practically uninjured, and Admiral Dewey has the breech blocks. While not as powerful as the guns of the present day of the same caliber, they are capable of effective service. Their location, however, is very faulty, as they are on the sh.o.r.e of the bay, with all the churches, public buildings and most valuable property immediately behind them. On the day after the naval battle Admiral Dewey sent word to the Governor-General that if these guns fired a shot at any of his vessels he would immediately reply with his whole squadron. Owing to their location, this meant a bombardment of the city. This threat was effective; these guns were never afterward fired, not even during the attack of August 13th, and in return the navy did not fire on them, but directed all their sh.e.l.ls at the forts and trenches occupied by the troops outside of the suburbs of the city.

Within the walled city are the cathedral and numerous churches, convents and monasteries, the public offices, civil and military, military workshops and a.r.s.enals, barracks for artillery, cavalry and engineers, storehouses and a few dwellings and shops.

The infantry barracks are outside of the walls, four in number; viz.: Neysing, Fortin, Calzada and Fruita. They are modern and well constructed, and will accommodate about 4,000 men. They are now occupied by the United States troops. Under the terms of the armistice the arms laid down by the Spanish troops on August 14th are to be returned to them whenever they evacuate the city, or the American army evacuates it. All other public property, including horses, artillery, public funds, munitions, etc., is surrendered to the United States unconditionally.

The question of sending back the troops to Spain is left absolutely to the decision of the authorities in Was.h.i.+ngton. They are all within the walled city, but as the public buildings are insufficient to accommodate them, they are quartered in the churches and convents. These buildings are not adapted for this purpose; they have no sinks, lavatories, kitchens or sleeping apartments, and there is great danger of an epidemic of sickness if the troops are not soon removed.

Pending their removal they are being fed with rations furnished by the United States Commissary Department, and the officers receive from the United States sufficient money for their support.

Spanish Navy.

At the outbreak of the war the naval force in the Philippines consisted of

10 Cruisers.

19 Gunboats.

4 Armed Launches.

3 Transports.

1 Survey Boat.

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Of these Admiral Dewey destroyed, on May 1st, ten cruisers and one transport, and he has since captured two gunboats. The Spaniards have sunk one transport and two or three gunboats in the Pasig River. There remain thirteen or fourteen gunboats, which are scattered among the islands. They are of iron, from 140 to 200 tons each, are armed with one breech-loading rifle, caliber 3 6-10 inches, and two to four machine guns, each caliber 44-100 to 1 inch. One of the captured boats, the Callao, under command of Lieutenant Tappan, United States Navy, and a crew of eighteen men, rendered very efficient service in the attack of August 13th. These boats would all be useful in the naval police of the islands. They will, however, probably be scuttled by the Spaniards before the islands are surrendered.

The Navy Yard at Cavite has barracks for about 1,500 men (now occupied by United States troops) and has shops and ways for light work and vessels of less than 1,000 tons. Many of the gunboats above mentioned were built there. The shallow depth of water in Canacoa or Cavite Bay would prevent the enlargement of this naval station to accommodate large vessels, and the plan of the Spaniards was to create a large naval station in Subig Bay, on which considerable money has already been spent.

Spanish Civil Administration.

The Government of the Philippine Islands, including the Ladrones, Carolinas and Palaos, is vested in the Governor-General, who, in the language of the Spanish Official Guide, or Blue Book, "is the sole and legitimate representative in these islands of the supreme power of the Government of the King of Spain, and, as such, is the supreme head of all branches of the public service, and has authority to inspect and supervise the same, not excepting the courts of justice." The office is held by a Lieutenant-General in the Spanish army, and he is also Vice Royal Patron of the Indies, exercising in these islands the ecclesiastical functions conferred on the King of Spain by various Bulls of the Popes of Rome, Captain-General-in-Chief of the Army of the Philippines, Inspector-General of all branches of the service, Commander-in-Chief of the Naval Forces, and President of all corporations and societies which partake of an official character.