JtoagoRNAUNSHEE Foun aig ae NSN EMPS LIBRARY 1929"... for Nationalist Studies ventie'sQuezon CityIntroduction Perhaps it is natural for many to view the forces shaping contemporary Philippine society primarily as “new” or at least recent in origin. True, the twentieth century has been the most traumatic in the Islands’ history, marked by occupation, war, independence, rebellion, political crisis and unprecedented population growth and technological prograss From the perspective of @ naw nation, full of self-confidence and pro jecting itself towards the future, events of a century ago can often seem remote of irrelevant. The Spanish era, in this negative view, merely saw an archaic, decadent colonialism hold sway over a somnambulent colony. time stood still. This work endeavors to show that nothing could be farther from the truth. ‘The revolutionary changes in the country’s economic structure that occurred during the nineteenth century, we would argue, were the critical formative in fluence in the prelude to nationhood. Their social and political consequences are still very much in evidence today. ‘The ambivalent nature of Spain's own response to the commercial forces sweeping the nineteenth century world in fact exercised a profound restestrt ‘on Philippine development. ‘This had Its significance, nonetheless, because as the Syuls of world commerce penetrates the Islands they enabled the mantle of economic change m the colonialists to indigenous groups who ‘embraced the Western spirit of modemity without prevarication. The emergence of @ Filipino bourgeoisie generated in tum certain political deriands, the momentum of which gathered relentlessly os the con: fury drew to a close. The later chapters of this work analyze these demands from a class perspective and examine how they influenced, and in effect limited, the revolutionary nationalism of the Katipunan and the outlook of ‘Aguinaido's Government. Fearful always of an armed, radicalized peasantry which might ultimately refuse to take direction, Katipunaros were fatally com promised In their nationalist endeavor. = Who then, were the real heroes of the revolution? We maintain that the common people, unsung, unremembered, and cruelly betrayed, emerged a= the true defenders of national honor. It would be charitable to suggest thst their role in the anti-colonial struggle has been largely neglected. A more cynical but perhaps more accurate. view is that the role of the common people v~ who sgl aginst American agamony oF many years afer the officer and gentiemon of Malolos had made, their peace ns and Filipinos alike tan out of the history of the nation by people — Amaricar 1d. The concludir who had raason to be anxious that the story not bo told. The Foncluding chapter is an account of the short-lived "'Nogros Republic’, 1 pay n dorlines soveral of the points wa boliove boar making. ese points in particular, We aro wall aware that our interpretations, on th f are likely to provoke controversy. Tho leading Katipuneros, guia aha Fevered 98 national heroes, and we have ng desire whatsoever to deniat their mamory or decry thoir achievement. But we feel most strongly ae must be viewed in thoir proper historical context. that their actions and at- titudes should be measured against, tho age and onvironment in which they lived. The Katipunan's ideologues worg not utopian socialists but, at most, Uiberals whose egalitarianism was circumscribed by the legal and ethical Perspectives. of tho European enlightenment. Even more emphatically, they Were not socialists in. any modern sense, nor could they have been. for the Philippines had been completely sealed off from coherent ideologies of radical Social change by the clerically-imposed censorship. This isolation, even with the censorship removed, would not be fully broken for another three decades. In-some respects the contemporary-struggle for a truly independent and democratic Philippines finds legitimate continuity with the struggle launched in 1896. But pride in this historical lineage and tradition should not, we feel, give way to the impression that present-day problems can be solved by the applica- tion, iowever creatively, of the ideals of eighty years ago. The bogus, cosmetic nationalism. which has plagued Philippine pol since independence moreover, has found it relatively easy to channal celebrations of Bonifacio and the Katipunan for its own cynical ends, sanitizing their true anti-imperialist legacy. If the Katipuneros had besn radical socialists such cooptation would have been difficult, to say the least. To dispel popular confusion between cosmetic and genuine nationalism, the Katipuneros, in our opinion, must now be viewed more critically, a8 pioneers in a liberation struggle which has long since advanced and found higher forms. Readers will note that the term “feudalism” is not used here to describe Philippine economic conditions during the 19th century. We have avoided this term and the equally confusing and more ambiguous “semi-feudal’) in full knowledge that it has commonly been employed to describe Philippine ‘economic conditions, not only under Spanish rule, but (according to some commentators) a8 they exist even today. In our view, such use of the term fundamentally misrepresents the tru nature of the forces at work In the Philippines during the last coneury. “The term feudalism represents 8 spécific, pre-capitalist mode of production, best typified by the economies of vatjous European states during the Middie Ages, Our analysis of the Philippings during the last century leads us to the firm view thar the dominant forcps at work were not.feudal but Most decidedly cepitalist. The most advanced sectors, of the economy, the sugar industry “for example, were clearly responding t6 factors of capital accumulation seal world markat forces whieh bore no relationship to any definition m \. Even the most backward sectors of the Philippine econom can. in our view, bo described a8 feudal only by stretching that term boyord ‘fulness. Pert of the problem, it seems to us, is 3 tondancy on the part of a number of commentators to label as feudal the regressive, exploitative, indoed often brutish socia/ relations of production which existed in evary sector of the economy and which were a marked feature of the advanced sectors. But such semantic imprecision raises a host of problems, causing confusion about the true nature of the productive forces at work in the society and, ultimately, about the true nature of the society as a whole. @ gonuingrinderstanding of the revolutionary changes which occurred in the Philippines can only be gained by considering those changes as a response to the penetration of the forces of capitalism, and we see no advantage in employing the pejorative “feudal” in attempting to convey our understanding of the (often extremely exploitative) productive rela- tions which emerged in capit Readers will sppraciate that in presenting the sweep of a.century in the of 8 short volume we have necessarily had to bring a thematic approach is work. This,.Gf course, does not allow for discussion of many of the Political events familiar to Filipino readers. In discussions on economic mat ters, we have. similarly made only passing reference to sectors other than ‘sugar, not because they were unimportant or uninteresting in their own right, but because the suger industry by Its nature dominated the export sector and most clearly illustrates the various points we wish to draw. We ourselves are only too painfully aware of the need for further in vestigation into many of the topics brought under discussion here: we offer this, work therefore in hopes that we may contribute to a growing spirit of interest and inquiry into such questions. We tum to the pleasurable task of acknowledging thosé whose kind as- sistance made this project a reality. Luzviminda Francisco, Lenora Fast and Margie Richardson tolerated our eccentricities with amazmg forebearance. Renato and Letizia Constantino also overindulged us in many ways; their kindly encouragement always reinforced the Inspiration their own work has provided ‘over the years. Thanks too ta Cirilo S. Honorio for valuable assistance. Finally, 25 we write we are saddened to learn of the tragic death of Malcolm Caldwell in Cambodia. Malcolm, was a warm friend and colleague of many years’ standing and we will sbrely miss his good company and challenging ideas. ‘ > \ 2 London . Quezon City ‘ January 1979 LowChapter | Ww vi vi vin xt xu xu PHILIPPINES FOr res oy, RM, 329 SCHOOL OF Table of Contents Introduction The Sotting: Colonialism in the Galleon Era Anglo-American Morchonts and the Early Development of Commercial Crops Ethnic and Trade Patterns Sweot Profit in Sugar Changes on the Land Sugar Turns Sour Economic and Trade Patterns on the Eve of Revolution The lu: Bourgeoisie idos: Spokesmen for the New The Katipuneros. Revolutionary Leadership in City and Province Katipunero Ideology: A Product of the Times. Revolution and the Dilemma of the Rich Revolution and the Dilemma of the Poor, The Negros Republic: Exemplar of Betrayal Notes 7 Oy uP DILIMAN at 19 31 37, $5 67 75 85 93 103 113 |The Setting: Colonialism in the Galleon Era Prior to Magellan's arrival,in' the Philippines in 1521 Manila was already known as an-ccasional trade ontrepct. Vessels came from India, Japan, anc China In order to barter, the most active traders being the Chinese.’ Few in- digenous Philippine products competed in this trade, foodstutts, fabrics, gold, Pearl and Ironware being the major Philippine contributions to the market. The main function of the Philippiné ports was one of trans-shipment and barter of goods brought from _ Spsnish penetration of the Philippine archipelago ant Legaspi’s capture of Manila In 1571 did little, at first, to after the nature of the previously es- tablished trade patterns. For a period of twenty-two years after 1571) Spain encouraged trepot role Manila hed established by al ing’ tribute levied on merchants,.By establishing free trade et Manila, Spain created what was then the dnily free port in the Far East. At the time Spanish trade was con- fined to the Acapuico-Manila route. No Spanish ships sailed around Africa and there was no direct fink between Spain and the Philippine colony. All contact was via Mexico, Manila developed into a major trans-shipment point in 2 flourishing: trade between China, Mexico, and Peru. For several decades, between thirty to forty junks a year came from China to Manila to trade for Mexican silver bullion and Peruvian gold. The profitability of this trade was such that overseas Spaniards in both Manila ‘snd Mexico were eager to en- courage it, but thayifound themselves faced with the increasing opposition of Sevilla merchants: who were themselves anxious to develop trade with Mexico but who found’themselves et a disadvantage in competition with trade across the Pacific. . The Seville rierchants attempted to defend their interests by arguing that the Acapulco-Manila,.trade was in no way--“developing” the Philippine economy, and that Manila was being used merely,as.a port of trans-shipment for Chinese goods. Spaimfitself, they claimed, would.soon become bankrupt for the sake of a handful of Spanish and Chinesé manufacturers and traders in the Far Enst. Accordingly, the Seville merchants pressured Madrid for cessation of the ‘and even demanded thet the Philippines be abandoned as a colony. In {685yhe merchants got thelr way and King Philip ordered the termination4 Roots of Dependency understandably Spanierds in Mani Chinn waa. However. Sparirds im MT aly ignored the ‘of tho Manil reluctant to lose thelr lucrative trado in cl " docres. Th rapid development of a black market forced the Madrid authorities to ralent somewhat, and in 1693 a new decreo was Le a number of rulos for regulating the Manila-Acepulco trade: Phiiph re, Seve trade was not to excoed $260,000 (Moxican) per yoor and goods ipaies into Mexico could not be sold for more than $600,000 (Moxican) py ssielld two ships yearly, of 300 tons ach, could ado with Acapulco. penis merchants In Manila protested vigorously and circumvented the new decrea whenever possible. The decree had to be repeated in 1604 and the Manila tra were nar brought to hoe! until further stern ‘warnings camo from Madrid Thus began the remarkable Manila-Acspulco galloon trade which lasted for over two centuries. ont revenue from So severe did the trade limitations thar become that governm: ‘or with other sources of income, to cover the enterprise was insufficient, togeth the cost of colonial administration, and until the late eightoonth century the Philippines was financially ndent on an annual subsidy from Mexico. That Spain was prepared to tolerate this doficit;for more than two hundred years suggests that the overriding motives for ratention of the archipelago were non economic. Pre-eminent among these motives was the propagation of sm and, when-proposals to abandon the costly Philippine possession Circulated In Madrid, it was spokesman of the religious orders who argued most persistently that the Spanish presence be maintainod.* "I. am an instru- ment of Divine Providence,” King Philip II reportedly declared in accepting thelr counsel, “I shall hoid the islands of Luzon even though by so doing | ex- haust my treasury.”* During the years of the galleon trade, a duty of two per cent was imposed ‘on Philippine exports, This revenue, coupled with a ten per cent levy on the ‘same goods in Acapulco and returned to the Manila Government, was all that was available for the maintenance of the colonial regime. Deficits, which we chronic, were made up by an annual contribution from Spain. But the disrup- tion of the galleon trade forced. Spanish officials to consider what alternative sources:of wealth could be tapped to mest the needs of the colony. The y of the galleon trade involved the annual trans-shipment of no more than a cou- ple of, hundred tons of goods annually from China to Mexico. Bacause of the weight and'size restrictions, space on the galleons was at apremium and there was great emphasis on items of high value. Accordingly, the galleons were laden with such Items as silks, spices, jewelry and other forms of handicrafts, Bulk agricultural commodities such as sugar and rice were not considered for the journey simply because of thelr space requirements. * Because of the limitations of the galleon trade and because the cultive- tion of traditional staples for domestic Mmption did not attract'an influx of Spanish fortune-seekers, the numerical and political dominance of the religious orders within the colonial community was assured, The restricted and entrepot character of thé Manila-Acapuico trade, in particular, Isolated the Philippines from the cosmopolitan Influences of a more direct or liberal commerce and left the clergy’s spiritual mission undisturbed.pvmeuneereeerrmar es Fo0ts of Dependency 6 While curtailing its own merchants, Spain also prohibited other Euro- peans from engaging In commerca in the Philippines. Aside from minor trade with the Chinese and the annual arrival of the gallon, Manila settled into @ somnolence broken only by periodic and unsuccessful attarnpts by the British Esst India Company to secure trade rights and to extend its operations to Manila Ouring the eighteenth century approximately eighteen to twonty junks a year entered Manila, Occasionally European vessels would arrive carrying Chinese as their ostensible captains and fiying an Asiatic flag in hopes of evading the proscriptions against European traders.’ Spanish attitudes toward the Chinese traders wore ambivalent and official policy vacillated. Spanish merchants welcomed the trade brought to Manila by the Chinese and wished to encourage it, but feared losing control of wholesale and retail trade to the Chinese altogether. In 1755 a trade depression provided the Spanish authorities with an ex- cuse to attempt the expulsion of all non-Christian Chinese, a move supported by the clerics who were being repulsed in their attempts to penetrate China itself at the time. Chinese collaboration with the British, who invaded and oc- cupied Manila from 1762 to 1764 during the Seven Years’ War, resulted in renewed Spanish efforts to oust them from the Islands — again. Christian Chinese excepted. Although few permanent converts were made, some Chinese merchants were not averse to adopting the outward trappings of the Christian faith to satisfy the Spanish.‘ Typically, the Spanish soon regretted the oss of trade resulting from the expulsions and in 1778 the expulsion order was revoked? Spain's indifference to the economic:development of her farthest posses- sion extended well into the eighteenth century. The accession of Philip V'to the Spanish throne in 1700, however, can be seen es the first in a complex se- quence of domestic and international events which by the century's close had at last significantly brosdened colonial objectives. Philip, the grandson of Louis XIV, was the first Spanish Bourbon brought to Madrid, and his advisers were in- fluenced by the renowned French finance minister, Jean Baptiste Colbert. Their encounter with Spanish society inevitably reminded them of many of the ob- stacies faced by Colbert in his efforts to stimulate economic activity in France: the aristocratic disdain for work; superstition; non-productive expenditure on religious obligations and feasts; and not least the vast wastage of manpower represented by the holy orders." Opposition to such deeply-ingrained habits and traditions was nawrally deeply divisive and the materialist ideas of Philip's advisers in effect gave birth to the classic schism within Spanish society between clerical conservatism and modemity, Throughout the reigns of Philip (1700-1746) and his two sons, Ferdinand VI (1746-1795) and Charles UI (1795-1788), the new ideas gradually geined momentum and Spain om- berked on an era of economic progress. Through their efforts to expend the Peninsuler economy, the reformers of eighteenth century Spaln came to view the question of commerce with the ter- Mories overseas in 8 new light. Colonia! policy, they argued, had become archaic. While the Philippines continued to be drain on the royal exchequer,8 Roots of Dependency jontributed to metropolitan th an rivals c © possessions of Spain's Europe and raw materials ang Prosperity and power. Thay wera a source of foodstutfs Drovided's market for domestic manufactures. As other a esa wwere dominating Asian commerce, Spain found herself faced wit an outflow of silver abroad to pay for goods of Asian origin such as cottons 3nd silks. By making the Philippines productive and establishing Manila ae ie direct trade between Spain and the Far East, consumer prices in the Peninsula it was thought, could be lowored, the loss of currency stemmod, and the growing 8 domestic textile industry founded on a more secure basis. In the Philippines the proposals for change were not received with enthusiasm. Even by the mid-sighteenth century, the number of individual Spanish agriculturists who might welcome the opportunity of production fur the European market was so small as to be politically insignificant. and reac- tion in the colony was instead mainly one of fear that the direct shipment of goods to Spain would ultimately break Manila’s monopoly of the AsiaMexico trade. Betwee: d 1790, however, several developments served to tr ‘ional veciniancs The aforementioned British occupation of the Manila area in 1762-1764 disrupted the colonial equilibrium: in @ number of ways. The invasion was “organized and directed largely by British East India Company personnel,’ and the expeditionary force leaders wasted no time in ‘seizing,the economic opportunity that their victory presented and opening Manila to foreign trade. After the’ British occupation certain indicators pointed to the demise of the increasingly anachronistic galleon trade. In 1765 the Spanish frigate Buen Consejo landed at Manila, the first ship to sail there directly trom Spain. The voyage was viewed with alarm by Manila merchants who actually boycotted the ship, seeing it as a threat to the Manila-Acapulco trade.’ Although the Spanish Government tried for fifteen years thereafter to establish the Cadiz- Manila route on a permanent basis, the hostility of the Manila merchants even- tually doomed the project.'? Nevertheless, the new trade routes opened the door to further ventures of this kind and in 1774 voyages between Manila and the (then Spanish) coast of California commenced, based on the fur trade. In the same yaar authorities permitted the sestoration of trade between ‘Manila and Peru, after a lapse of almost two hundred years.'* - Both of the new trade routes weakened the galleon’s monopoly, as did the creation in Madrid of the Compania de Libre Comercio in 1778 to engage in direct trade between S; ‘and Manila. Although the company failed a few years later, it was superseded by the Rea/‘Compenia de Filipinas which was given a twenty-year monopoly on all direct trade between the Philippines and Spain via South Amerié A further blow to the galleon trade-came with the decline of the galleon textile market in Mexico. By the. 17505 b.growing market for India cotton goods was being developed in Maxico and Indi textiles, trans-shipped at ‘Manila, beceme the second most important commodity in galleon trading."* By the early nineteenth century however, the competition of English cottons in the Mexican market as well as $hé destruction of the Indian textile trade left the Manila merchants with only Chinese silks to trade in a dwindling market.7 The ,Roots of Dependency 7 de facto opening of Manila to European tra monopoly conditions of the gelieon trade, ly opened to foreign trade until/1834 In this 08 In many similar circumstances Spanish policy decisions taken in Madrid often mat with only token compliance in Manila, the result being that technicelly illegal commercial activity was often carried out quite openly. For example, although European commercial houses ware officially prohibited from operating in the Philippines until 1809, there is evidence to suggest the aniston of @ French mercantile house in Manila dating from as early as in the 1790's finally onded tha ven though Manila was not official- Preoccupation with trade militeted against Spanish involvement in Philippine agricultural production, although even prior to 1700 small amounts of sugar were exported the Philippines to China, along with other agricultural products and ruftive handicraft items.'* Minor trade in sugar, cot- ton, indigo, rattan and papper was conducted betwaen the Philippines and Chine, Persia and India ‘by mid-century. °° The first serious effort to develop the indigenous agricultural rasources of the islands awaited the governorship’of Don. Jose Basco. y.-Vargas, who served in Manila from 1776: untll,1787. Governor Basco founded the Socieded Economica de’Flipigas (Royal Economic Society of the Philip in 1781 for the purpose of pfcouraging agricultural production in the colony. Prizes and awards were esteblished by the Society for those who were “con- spicuous in, their success In agriculture.”*" Several state monopolies for tha production of various agricultural products were also created at the same time. Monopoly licenses were granted for the cultivation of such products as cotton, indigo, spices, coffee, cocoa snd tobacco in an effort to make the ad- ministration of the colony financially self-sufficient in the wake of lost revenue from the galleon trade. Of all the monopolies created, the lest named was by far the most highly organized and the most successful. indeed, revenue from the tobacco monopoly was sufficient to erase the chronic colorial deficit? The tobacco monopoly Initially involved only internal production and consumption as tobacco did not figure in the Philippine export trade until the early nineteenth century. Monopoly licansés on tobacco ‘and other consumer goods thus served as a Kind of hidden surtax on-the indigenous population Not all crops came’ under monopoly control, however. Sugar production, for example, was not licensed as such but responded to the generally favorable conditions created by the encouragement of agriculture. Sugar exports rose from 100 tons in 1788, to 4,500 tons in 1796, reflection of the increased number of European ships calling at Manila. Although small by Jatter day standards, this represented a fairly substantial proportion of total world sugar ‘trade, and in this period Manila wes probably the largest exporter of sugar in Asia . 4 Production of indigo, used in dye making, was also spurred by the Basco reforms. Indigo was Originally produced under a private monopoly even before: Basco's tenure but production lagged until the monopoly contract expired inof Dependency oar to more ” ara than a few tons pe Year 10 more th, {rom mo ae an indication of Manila's incroasey moat important agriculs, y Attar sugar, indigo was the mos 4 Arte art hteanth cantury. Absce, another imporrang ‘ mercially significant quay. Exports rose swiftly four hundred tone per annum after 171 importance in trade export in the Inst decade of the ne nth century crop, was not exported in hiner tities until the early 1820's no! ty, Four years after the creation of tha Royal Eco or narra cee Compenia ve Filipinas was tounded. Modetled after the be c if official int i C further reflection o oreat pany, the Royal Philippine Company was # “in 7 ‘nos. In order not to 4 in the development of commercial exports in 1 on ed wo on n terfere with the gelleons, the Royal Company was ao ewocing pkg od 2 the Manila-Acapulco trade, but cone in between Manila and Spain. _ But the successes of the late eighteenth century disguised stor ion, Despite bitiou Bourbon reformers in Madrid and the Fear at tate meeenatees it was countries other than dogged efforts ntatives in Manila t pertculty Bt wand the United States. that found themselves in the Jarance of Philippine products in inter- rational trade, This wes SToporent” immediately after the first significant harvests of export crops. Between 1786 and 1802 foreign traders exported roughly four times as much indigo from the Islands as the Royal Philippine Company, and for sugar there was an even greater imbalance, foreigners purchasing nearly thirty times the quantity bought by the Spanish trading enterprise? Henceforward the extent of foreign commercial domination wes 0 grow almost without a break until the end of Spanish rule. Spain's relegation to a secondary role in the development of Philippine trade and agriculture wes primarily a consequence of metropolitan weakness. The Peninsula, together with the other overseas possessions, simply did Not represent a market large, settied or prosperous enough to absorb Philip pine exports, and such demand as did exist for tropical produce could in the main be satisfied from less distant sources. Nor was Spain capable of supply- ing the islands with competitively priced items of manufacture. Despite rapid population growth and 8 degree of industrial progress in Catalonia and the: Besque provinces, Spain's relative backwardness vis a vis the countries of Northwestern Europe and North America became more accentuated 8s the Rineteenth century wore on. The vast majority of Spaniards remained on the land, illiterate and impoverished. indigenous investment capital was virtually non-existent, and the country was deficient ily worked deposits of cos! ‘nd other minerals." These economic handicaps to development were com- pounded by the disasters of the Napoleonic Wars. which devastated Spanish shipping, the loss, partly in consequence, of the American colonies, and prolonged periode of domestic instability. Far from being the center of a strong mercantile and colonisl empire, indeed, it can be argued that throughout the nineteenth century Spain's own economy possessed a “semi-colonial” status, dominated in its more progressive sectors by capital, expertise and equipment from abroad.” ain, 's inability to play & leading part in the exploitation of Philippine ©Roots of Dependency 9 resources, HOWEVEF, CANNOT bo attributed antirely to the distrassed condition of Pyne Peninsula, Further obsinctes sprang from the nature, attitudes and prac fe icos of colonial sotiety in the archipelago, When agricultural devalapment first jecelved official encouragement in the tate wightaanth cantury the Spanish munity in the Islands was ill-equipped to meat the challenge. Long dependence on the galleon trade and provious neglect of the local economy pi had bred inertia. In 1797 the Royal Economic Society went out of axistence g: through lack of interest and was not raconstituted for more than twanty yaars, Bethe number of forward-looking Spanish agriculturists and ontrapronours being tod small to sustain such 8 body. Credit institutions were correspondingly 0k and suffered from anachronistic logislation, notably a decrae that ruled Fnat no Filipino could be held legally liable for the rapayment of any loan ex ceeding five Mexican dollars. Foreign interests had gained a foothold batora these initial problems of commercial planning were resolved. As the Spanish Secular population increased throughout the ninstoonth century the number of individual Spaniards engaged in agriculture, trade and finance grow, but the red vocation of most was the less demanding and generally more festigious alternative of employment in the government bureaucracy. For this on the colonizers never gained the advantage that their numerical ‘over other foreigners might have allowed. Thus from the very begin- of commercial agricultural development in the Philippines, despite the of- idal support for such organizations es the Royal Philippine Company. export jade was dominated not by the colonizer but by foreign traders. This, of ly portent of trends, which continued for the remainder of The original mercantilist rationale behind Philippine development, the in- to guard the resources and markets of the archipelago as a ‘Spanish eserve, was gradually abandoned in recognition of metropolitan and local kness., Once the decision to encourage commercial agriculture in the ds had been taken, resistance to foreign encroachment was partly tralized by the desire to secure good outlets for Philippine produce, the de- ‘and for imported goods that Spain was unable to provide, and the need for toms revenue.” The gradual lifting of legal prohibitions on foreign commer- is} Involvement coincided with unprecedented advances in communications agricultural technology. Together these stimuli greatly improved the com- Pétitiveness and profitability of certain Philippine cash crops on the: world and the foreign trade of the archipelago rapidly expanded after the turn fof the contury. Progress in the development of export agriculture was uneven, however. fand for many years commercial production was limited to tiny enclaves located ostly In the Immediate environs of Manila, No Philippine export crop can be Hid to have hied anything but minor impact on international trade prior to the Frfficial opening of the port of Manila in, 1834, The influence of the new com. rcial policies on the lives of most of the native Filipinos was ‘equally slight, pting those who lived and worked in the commercial enclaves. In the acco regions of Cagayan and Isabela, provinces In northem Luzon, some of harshest and most rigid forms of labor discipline were employed in con- istlon with the tobacco monopoly, but for the vast majority of Filipinos the10 Roots of Dependency traditional form of eure continu, wnatvactad BY tne MeN conditions of raditional form of agriculture C4 production being introduced: we agrarian polly, and bess. And more for it to ovolve in Ite initia, ariculture represented the begin, found change which had ever occurred in Fhllipnine economic Hife, The changing mode of production from wvcial rons ‘one agriculture and handicrafts to the production of commercial e nenaort tas 2 revolutionary one, tho offects of which wore instru praia form. noarly every aspact of political and econamic life in rv. colonial policy had its roots in the In spite of the mode mp8 ing in mind that it would take @ contury stage, the implemental rings of the most pro! tion of commercial “The departure from previous Spanish t lization on the part o' arch Soto m practisod in Mexico, tatin America and in the Philippines were ine singly impractical and unprofitable, Newer forms of colonial practice, pioneered mainly by the British and stressing commodity production, flee trade ond the theory of comparative advantage, were replacing older theories in- itiated by the Iberian empiras and predicated mainly on the exploration of mineral wealth. From the mid-seventeenth century the British had been at- tempting to gain accass to the markets ond the raw materials of the Philippine ‘of Manila by the British in 1762- colony, but excepting the actual occupation B 64, the Spanish kept the English tradars at bay. The introduction of commer. Gial agriculture resulted, however, in an almost inevitable corollary — the gradual penetration of the Philippine economy by other Western powers, + The century following was marked by the gradual but inexorable penetra- tiorrof the Philippine colony by American and British merchants. By the decade of the’1880's British economic hegemony was so complete that, certainly in an economic sense, the Philippines was 8 de facto British colony: This gradual transformation of the Philippine economy occurred in the face of at times bitter Spanish resistance to foreign penetration. But Spanish policy was always am- bivalent and it Is clear that Spanish afforts to halt foreign encroachment were, after 1782, always compromised. Spain could no longer afford to operate her colonial empire in an economic vacuum and the rise of commercial agriculture brought with it Increasing dependence upon the emerging market areas of the West — Northern and Western Europe and North America. Having decided, in éffect, to produce for this market. in the long run it proved impossible for Spain fo prohibit its representativas from participating in the development. of the Island ‘economy. To paraphrase an-aphorism coined in relation to eighteenth century Latin America, ther ain kept the cow while Britain and the United Stetes drank the milk.” The success of foreign traders and financiers, however, should not obscure the fect that throughout the nineteenth century their penetration of the Philippine economy occurred in the face of discrimination and in- convenience, obstacles that sprang from the ambivalence and erratic applica- tion of Spanish colonial policy. The expansion of Philippine trade, it will be remembered, originated with 8 re-appraisal of imperial objectives in Madrid based on the mercantilist belief thatthe resources and markets of the archipelago could be hamessed to assist economic development in the Penirr 1 Spanish officials that the archale forms of |Anglo-American Merchants and the Development of Commercial Crops ‘Sugar technology and manufacturing skills originally came to the Philip: pines from China, and It was the Chinese who built the first crude sugar mills in the Islands. Although sugar was not always the leading Philippine export ing the nineteenth century, the economics of sugar production, coupled ‘with the technological aspects of plantation development, milling and trading Ansured that this commodity would play a key role — the cutting edge, so to {Speak of the commercialization of Philippine agriculture. There were several greasons for this: first, until the fall in sugst prices in 1884, profits in suger production were of such a mag ‘88 to justify the capital requirements necessary to davelop the industry on 8 wide scale: secondly; because tropical ‘cane production demanded levels of capital investment far greater than re- -quired by other tropical crops, Philippine producers were linked with the majo- ‘sources of such capital, the Anglo-American commercial houses, as these ‘proved to be the only major source of such financing. Since Sp: ‘absorb only a fraction of Philippine sugar exports — refnem! [Spain's Cuban colony was the greatest suger producing country in the world — was perfiaps inevitable. that trade and shipping would also come under Anglo-American hegemony. the first British commercial house was founded. At first the British were y permitted to deal in locally produced commodities and engage in local 1. Most of Philippine overseas trade at this time was with China and stil! sisted mainly of the bullion tradg with Mexico.’ By 1814, the year of the «tést galleon from Mexico, permission was nted to Europeans to establish themselves permanently in Manila and soon presence of English, American, German and French merchants was having scribed conditions in the Philip- 38 at the time in the following terms: “Foreigners have been. . . gradually imitted since 1800; and they have supplied the wants of the country by in- ing Europeen articles, and cerrying off the surplus produce, when a suf- It quantity could be procured to employ their capital, which rarely happens 134 Roots of Dependency without much delay, So rapid hon been the sugmantaton Ones that though in 1813 only 16,000 pokula of sugar wore @xPOrr a 1818 t0 200,000 at from 6% to 9 dollars por pokul In the decade attor 1800 suger bagan to be produced ye conte a Pampange and Pangasinan provinces, both located on tho ‘Chine, ut whhte plain. Prior to 18.10 most of Luzon'a sugar exports went 10 °C toe introduction of European merchant houses much of the rele lo shifted to new European markets, Concomitant with the develop Nd export trade was the introduction of European manufactured goods. This hed a par. ticularly disruptive effect on the native toxtle industry which iad virtually destroyed, especially atter 1818 when a now tariff encouraged the Invodue- tion of cotton plece yoods.' By this timo shipping was lergely in British, American and Chinese hands, « situation which continued for the rest of the century." By the ond of the decade sugar was the leading commercial crop in the Islands, accounting for approximately twolve par cent of total exports by value.* The rapid transition in Philippi ine economic life and the advent of @ Euro- pean trading community in Manila was not achieved without some moments of disquiet. Problems came to a head in October 1820 when a French ship ap- ‘peared in Manila with crow members ill with cholera. Fear of an-épidemic was ‘ompounded by rumors thet a French naturalist, taking samptes of the Pasig river, was poisoning the water supply.'Panic spread, culminating in an attack 00:“all'the strangers” living in the European quarter on thi evening of October ' 9d resulting in:the deaths of some .warity-seven whites. Feelings ran Righ for sofne time as many of the merchsfts accused Spanish officials of laxity in their éfforts at protecting the foreign community.’ There was some justification for such,pccusations, having at the root the chronie Spanish ambivalence toward the merchants. A large segment of the Spanish community was dis- pleased at seeing its’position of commercial supremacy usurped in the colony by othér European nationals. Another source of continuing bad feeling was in- splred by dogmatic anti-Protestantism fomented by the Spanish dlerics in the Islands. Concerned’ {est Protestant ideas should follow in the wake of the non- Catholic Europeans, the clerics were not averse to whipping up anti-foreign feeling smiong the Indio population. = Spain's economic weakness gave rise to.endemic prevarications vis a vis ye European merchants and from the beginning provided fuel for a never- nding series of complaints about capricious law enforcement, administrative * sloth, and 8 studied indifference to the needs of the foreign community. For ex- in 1817 commercial and ecclesiastical logic combined to produce a law preventing Protestants from acquiring land fn the Philippines. As with similar legal strictures on Europeans, this provision was haphazardly enforced end easily evaded. But it remained on the books, to be invoked at whim and this | fect alone played an important part In curtailing commercial investment in the land. These largely negative and seemingly petty conditions imposed on the foreigners proved, as we shall see.to be of the most profound importance in shaping the direction of Philippine economic development gnd in creating the conditions which gave rise to an Indigenous ruling cless.*—— ee Roots of Dependency Manish proclaimed that only Chinese artisans cultural production could remain in the ho Philippine commissioner in Madrid was 1980 Grip on Philippine domestic commerce, rather a colony of the Chinese empire than 8 part of the Spanish monarchy.”* The Sponish proposed » nanber of stec, putes against tho Chinoso: that thoy be compollod to cultivate landin Northern Pampanga and Nueva Ecija (thon Folativaly unsottled areas of Central Luzon). B that they bo encouraged to plant “most usotul crops” such as colfes, cacao and coconuts, and that they be prohibited from angaging in trade. Although the recommendations indicate the thinking of the time the plan was never im: plemented because, despite Spanish annoyance at Chinese commercial control B over the colony, the trading functions Performed by the Chinese were simply too important to the overall economy to be sacrificed.” With the rise of sugar the Chinese traders developed a lock-grip on the middleman role. They gathered sugar from the /ndio cultivators and trans- Bi ported it to Manila, where’ they maintained:crude refineries. After refi g, the q sold to the European merchant houses for trans-shipment ‘overseas. The Soup were -keen to preserve this trade function for ‘themselves. and wied. lo prohibit the Chinese from developing the provincial trade. But in spite of numerous restrictions and decrees they were never able to break the Chingsé’ hold. Chinese control grew stronger over the years as sugar developed into.an increasingly important export commodity.’ s ‘Sugar production for export was centered in the Luzon ‘area, mostly in the Manila environs and in Pengasinan on the Lingayen guit ,But even after sugar bad daveloped into the most important Philippine export ‘crop after 1818 it was still produced on a relatively modest scale as compared With cane cultures developing in other parts of the world. Vast plantations similar to the highly developed West Indian sugar estates Were never the rule in the Philippines and sugar production continued for many years as a-native iallholder crop.'? Moreover, there were obstacles in actually establishing an port market during the 1820's and early 1830's. Prica fluctuations and ichangiag market conditions (due in large part to irregular and erratic shipping 9F those engaged in actual agi provinces, but two decados lator t still lamonting the continued Chin commenting that the Islands wor ‘oduction was a major departure from tradition, and one unsuccessful year, ther due to poor prices or through unfavorable weather conditions ould often prove to be an insurmountable obstecle to further commercial Byoduction."* : : The termination of the galleon trade and the founding of a number of im Mant commercial firms in Manila in the decade of the 1820's was the ab- lute turning point of the calony’s economic direction. Philippine foreign18 Roots of Dependency tor at tho beginning of the decade, was dominated by the commercial development of AUTO a oeeuce Commoditian ag the racadie cama to a close. By 1820 the Nozea Tivclition had effectively ended the trade botwoon China, Manila and Acapuleo, which for two centuries had been Manila’s ‘economic mainstay. There were several qualitative indicators ot Tae ee rents Wanna being a trans-shipment point, only a fraction © almort immediately va exported In 1810 for axample. loss than twenty pa Cent of all goods entering the Philippines wore dostinod for local o ption. By 1818 however, trade pattorns had changed considerably. The percentage of imports destined for indigenous consumption grew to over half of total im. Ports. Of equal significance, by 1820 tho Philippine export trade included Much greater share of damesticelly-produced commodities. Significant quan. tities of local products entered the Philippine export trade for the first time and imports from China fell off sharply over the same period. 1 Domestic exports in 1818 stil! consisted to a large degree of forest and sea products, including wax, indigo, dried shrimp, and such exotica as bird's nests, tortoise shells, shark fins and sea slugs (beche-de-mer), all prized ‘Chinese culinary delights. The Philippines maintained @ steady market for such products throughout the nineteenth century but in terms of total trade, Agricultural commodities such as suger, abaca and rice surged to the fore in the ‘decade of the 1820's. Ching declined relatively as a market for Philippine goods, although in absolute terms exports to China continued to rise until after 1850."* Severe food shortages in China in the 1830's and ‘40's led to in- creased rice exports from the Philippines, but no major market developed in China for other major agricultural products such as abaca and sugar. trade, primarily entrepot in charac! By 4820 British, Franch and American shippers had had over thiny years’ experiencé in trading with Manila, Although of growing importance. Philippine trade prior to this date wes usually considered ancillary to the China trade. Often there wes a long wait in Canton due to quayside congestion, and sea captians waiting for cargoes of tea and silk developed the practice of sailing to Manils and back with rice to fill otherwise idle weeks. To service such trade Canton-based British firms such as Forbes & Co. and Perkins & Co. established commission agents in Manila in the early 1820's. Because of the absence of adequate facilities, the early brokerage firms quite soon extended their ac- {ities to a host of related functions such gs foreign exchange, insurance and, ventually, banking. By the Iste 1820's at least seven British and American merchant houses were doing business in Manila."” Because they devoloped in response to the needs of (mainly) Anglo-American shippers, these early firms enjoyed several natural advantages in the Philippines. Their close links with the cargo shippers and their contacts with Chins, New York, Boston and London gave them close ties with the major markets for Philippine produce. Ot crucial Importance, such linkages enabled the Manila merchant houses to introduce bills of exchange and letters of credit, eliminating the need for cumbersome specie shipment.These new forms of business organization in turn led to the accep- tance of funds on deposit, the issuance of stock and, in time, a full range ofeerste Roots of Dependency 7 banking activity.'* The impact of these new developments, the crystallization of Western merchant banking after 1820 and its consequences for the Philippine economy cannot really be overemphasized. The merchant houses served as the starter motor in the next major step in commercial agricultural development in the Philippines and they exerted major influence in the shape and direction that development would take. From the 1820's onward, it can reasonably be argued that Britain and America (rather than Spain), were at the fevers of economic control in the Philippines.'* The decision to accept funds on deposit was 2 critical factor in the process we are describing here, for in so doing the Western merchant houses set in motion a train of events of utmost importance in the process of commer- cial integration. For as soon as cspital began to accumulate on deposit the merchant houses sought investment outlets within the Philippines itself, a new departure not without major significance. At first such investments were con- fined to local ventures, such as cordage manufacturing or to shipbuitting and repairs. New outlets for capital were soon needed, however, and at this junc- ture the merchant houses tumed their attention to commercial agriculture. As we have seen, however, legal impediments weighed against the actual purchase of agricultural land by Europeans. Also Spanish law provided that no/ India could be held fiable for the repayment of any debt exceeding twenty-five Mexican dollars a provision ruling out orthodox crop loans. By the mid-1820's, a few of the merchant houses began to circumvent the $25 limitation by thet simple‘device of paying farmers in advance for the estimated valle of a forthcoming harvest, adjustments being made after completion of the harvest” By negotiating crop loans under this guise, the merchant houses capitalized the early development of sugar, abaca and other cash crops. The merchant houses were thus instrumental In encouraging new modes of production and business organization in the Philippines. They provided the initial capital for commercial crop develonment and they offered facilities for marketing Philippine agricultural products in China and in the West. The merchant houses also promoted the introduction of new products. such as abaca, and encouraged the use of modern machinery in sugar milling and the opening of new lands. Finally, the commercial houses spearheaded the introduction of Western consumer goods such as textiles end manufactured products in the Philippines. The cumulative effect of all this was to bind the Philippines much mora closely to Europe and America and to weaken further the already tenuous economic ties between the Philippines and Spain. ~~ 1n1832, coincident to the decision (implemented two years later) to.for- mally open Manila to foreign trade, a new Spanish tariff was put into effect. The aims of the new tariff were contradictory. It aimed to encourage foreign commerce .and to promote agricultural expansion while at the same time to in- crease customs revenue. The new tariff was & reflection of the decline of the entrepot trade with China and Mexico and the demise of the Royal Philippine Company." {t also reflected shifting trade pattems and the bconomic changes of the 1820's. One important feature of the new tariff was the encouragement It gave to Spenish shipping through preferentis! duties. A graduated tariff scale 218 Roots of Dependency rity of ship registry and the origin pectively.”” As a result, goods im. was imposed, doponding upon the pationa! ippod to Spanish vossels in and dostination of imports and exports, respec ported from Europa were typically tronsst nila, in Hongkong or Singapore for the last log of the journoy in development avoid import duties. This accounted to a large degree ports in subsequent the volume of trade between Manila and these {wo yoars.”? Many of the important development In merchant banking ane commer. cial agriculture production wore furthar encouraged by the official opening of the port of Manila to tho trada of all nations in 1834.7" In the same year, partly in response to these developments, two important American commercial houses were founded, Peele Hubbell & Co. and Russell, Sturgis & Co. The most important trading house in Manila for many years was, however, Russell, Sturgis & Co., largely because the firm represented Baring Bros., one of the largest British commercial houses then active in the Far East.”* Also in 1834 the Royal Company folded, after yaars of mismanagement and financial loss. With the opening of Manila to world trade, the British and the Americans ‘wbegan to dominate Philippine commerce. Thera were certain restrictions on British capital which did not apply to ‘the Americans. For example, although the British were successful in carving out markets for textiles, machinery and other manufactured products, stric- tures against direct competition with the East India Company limited British in vestment in export agriculture until the late 1850's. The Americans of course, did not-at this time have tropical colonies of their own toward which to direct their enesgies and so moved into the commercial vacuum created by British Empi ence and Spanish weakness.a Ethnic and Trade Patterns \n the first year after Manila was finally and permanently opened to foreign shipping, over 11,000 tons of sugar were exported from the Philippines and by the late 1830's fairly regular trade patterns had been established. British and Americen ships calling at Manila took on cargoes of sugar and hemp which found markets in New York and London.’ As the We: merchants appropriated the major trade end credit functions, endemic friction between the Spanish and the foreign firms Increased and Spanish hostility toward the merchant houses grew as their own competitive position deteriorated. The major effect of petty harassment by Spanish officials was ‘simply to slow the rate of foreign capital’ penetration in the Islands. For exam- ple, Spanish refusal to open Philippirie por other then Manila to foreign trade ‘meant thet the products of other islands had to.be transferred to Manila before shipment overseas. Such a policy raised costs and naturally retarded the com- mercial development of the Visayas and the Bicol tegion. For these reasons the Philippines remained somethirig of a commercial backwater in Asia for during this period India, China and Latin America offered greater commercial oppor- tunities and a less hostile investment climate, and consequently attracted the capital which might otherwise have found its way to Manile.” Spanish commercial policy, typically ambivalent, was again subjected to a major review when world trade stagnated In the late 1830's. In a secrot report commissioned by the Madrid authorities in 1841, it was argued that Spenish efforts to control trade and restrict foreign capital in the Philippines retarding the commercial development of the Islands. Drawing a com- parison between Philippine trade and trade with the Spanish colony of Cubs, the report noted that the value of trade in Cuba was more than five times, than in the Philippines, although Cube's populetion was but'a fourth of by this time anyway, be recognized ss such. It also recommended, among other things, that the Spsnish accede to demands for the opening of additional ports to foreign trade and that curbs on Immigrant labor be abolished.” Lack of capital Investment was seen as retarding commercial development and sugar production on Luzon was described to Illustrate backwardness: “How cana planter who produces @ hundred quintals of suger, or perhaps only twenty, in- stall 8 water of steam mill and the corresponding vats? The consequence of 19en MS 20 foots of Dependency produced in senaly QUaTtities witty, irs ia that everything iso 4 The mot primitive machinery, the @0 oduct ty, and serving 26% brie the this state o of the technical wills and wit 1908, costly in price, poor in qual ¥ Into disrepute.”* Mf to the fundamental contradiction of the ‘ded that if full Commercial ey Ploitation of the Philippines wa y, cariain basic changes in edminetrative practices were in order. Typically. ieee the oritias provaricated on the 1841 recommendations. use of Spain's wanknoss as a commercial power any decision to Hberalize comenerctat Dractices, would, parforce, strengthen the hand ot the Anglo-American in. Jerests. For these reasons, tho report's recommendations were NOt accepted 4nd, indead, further restrictions were placed on the Europeans. A new lew Drohibited foreigners,from engaging in retail trade and in 1844 3 decree con. fined ali “strangers” to the port cities." The policy choices taken up by the Spanish at this juncture in Philippine ‘economic history were of tremendous significance, even though the decisions Wore often negatively cast — for example, the decision not to implement the recommendations calling for relaxation on the ban on immigrant labor was im- Portant in preserving the Malay character af the population." Similar strictures imposed upon European merchants. coupled with restrictions on Chinese economic activity created 2 vacuum filled, a3 we shall see, largely by in- digenous groups — the embryo of the Philippine ruling class. The report addressed itse! thy coneslu nish position at this time and correctly 6 Spanish priori Spanish m An Importent corollary 10 the developing relationship between the Western merchants and the mestizos wes the return of the Chinese to a mid- leman trading role, serving ax a link between the Western merchants and the Chinese-mestizo landowners. Contacts between the Chinese and the indigenous Malay population pre- dated the srrival of the Spanish.’ In the early period of Spanish colonialism in the Phitippines, trade links with Manila attracted Chinese immigrants and in the early years of the 17th century an estimated 20,000 Chinese were in residence there, mostly engaged in retail trade, Chinese economic penetration of the Philippines, coupled with Spanish inability to culturally Hispanize the Chinese and convert them to Catholicism led to recurrent violence. In 1603.the Manila Chinese were decimated in an anti-Chinese Pogrom. Effons were made to restrict the number of Chinese in the Philippines but by the late 1630's the Chinese population In Manila had again swollen to 30,000, After. an abortive uprising In 1638 the Chinese were again reduced by massacre to one-third their previous number.’ Further massacres and frequent expulsion orders marked the next cen- tury and 8 half of Spanish-Chinese relations in the Philippines. In 1662 » mas. acre led to renewed efforts to reduce the Manila Chinese population to ax thousand, repeated again In 1686 after an sbonive Chineso revolt. But the | growing economic Importance of the Chinese msde such moves unpopular | with certain factions of the Spenish community. Those Chinese who were |Roots of Dependency 2 converted to Catholicism, fitteen to twenty per cent of the total Chinese population In Monila in the 1680's, were permitted to reside in the rural areas outside of Manila." By the mid-cighteenth century Christian Chinese were living In the Central Luzon provinces and in locos, in Iloilo and Cebu in the Viseyas, and even as far south as Zamboanga. Growing worries about Chinese control over provincial wholesaling and retailing led to Spanish retaliation in the form of an expulsion order in 1756 which left few Chinese in the hinterland and only an estimated five to ten thousand in Manila. This ‘number was further reduced in 1766 when all Chinese who had sided with the British during thelr occupation of Manila were ordered out of the colony. From the end of the British occupation until the middle of the nineteenth contury, the number of Chinese In the Philippines remained small, but by the 1830's the Spanish began to reconsider their policy of Chinese exclusion.'° Im- migration from China was first allowed, then actively encouraged. A Royal Ordor in 1841 decreed that “first class” hacindas (i.e. those which produced more than ‘2,500 Per annum) could employ ap to four hundred Chinese, and “second class” haclendad (producing over 7 1,500 per annum) could émploy, up to two hundred Chinese,"' Because ea:ller decrees had given the Chinese Immigrants the right td engage in any occupation of their choosing, there were chronic difficulties In maintaining the Chinese as field laborers. In any event, these changes were slow to take efféct, and it was not until 1860, when new efforts were made -to encourage Chinese immigration to agricultural areas, that large-scale Immigrationbggan. After 1850 the Chinese population in the Philippines began to grow, augmented by relatively large-scale immigration. The major period of immigration occurred in the decade 1876-86, when the Chinese population rose from/spproximately thirty thousand to over ninety thousand. In the early 1880's over 10,000 Chinese immigrants a year were lending at Manila."? Few Chinese actually worked for long as agricultural laborers as the Spanish had Intended; more commonly the new immigrants either settled in Manile or Involved themselves in the provincial retail trade which they had been forced to relinquish a century earlier. The failure to get the Chinose to set- tle on the land became # growing source of controversy in Spanish govern- ment circles. The sharp rise In the Chinese population aroused some of the traditonal anti-Chinese sentiments of the Spanish, who saw them developing Into Important allies of the British and American merchants. Chinese resistance to Catholicism and cultyral Hispanization contrasted sharply with the behavior of the Chinese-mestizos who had'developed a sycophantic relationship with Spain. Spanish ambivatence to the Chinese was shared in large part by the mestizos, who slways took great pains to emphasize the separateness of thoi! cultural and ethnic heritage. 7 ‘The British espetiaily were Instrumental in developing commercial tie: with the Chinese who served as the agents in rural areas. Chronic in debtedness bonded the Chinese to the merchants, but as trade continued expand, the debt relationship was to mutual edventage. ‘A wholesaling network known ss the cabecilla system was establishe:22 Roots of Dependency sil Western hardware and othe, by Chinese merchants in the provinces to 1 Merchandise, and to act as buyers of local crops for rs brome we ove or arated especially propitious to the Westen re eens which othe On the Chinese middlemen alleviated two major prover Wks Given he threatened to sharply limit thelr commercial role in the Priutppines. Given the ambivalent and ot times aver hostile official attitude of the Spanish authoritigg Grad the patty vagarios of government administration, the Wester merchants were reluctant to involve themselves in retail trade, especially at the provincial level, By employing the Chins for this task, the merchant houses bed their Goods widely distributed at @ minimum of investment or dir Prior to the opening of lloilo to foreign trade, Negros Isignd was sparsely populated, largely afforested, and still subject to periodic raiding from the ‘Muslim areas to the south.‘ The introduction of steam navigation in the period 4852-53 brought the port city of lloilo closer within the Manila trading orbit and helped to make the development ‘of plantation agriculture a more'realistic prospect* The first recorded production of sugar on Negros began in 1856 when 625 tons were milled, as against 36,000 tons produced in Luzon at this time." ° ‘According to Nicholas Loney, British Vice Consul in Iloilo and central figure in the development of the Negros sugar industry, U.S. and British firms were at first hesitant to take adventage of the opening of the port Iloilo, for fear of provoking capricious Spanish authorities. But sharp increased in suger prices soon overceme such hesitation and by 1857 8 number of Manila firms hed established branch offices in Iloilo. The non-Spanish Euro- pean population of the city and environs grew to sixty.’ With the advent of export agriculture in the Visayas, patterns of trade began to emerge similar to those which occurred earliar in Luzon. The,wfestizos heir dominant position in moneylending and trade and . By taking advantage of their contects and their understending of the emerging market economy, the mestizos bagan to move directly into agricultural production, securing title to moines rer rene é 5 i i i i I were soon ousted from ti became adjuncts to the more poworlul Western hou aTP aa —— 32 Roots of Dependency ‘Although @ few scattered European hacienda tation development was almost en, ‘mercial firms confined their activity ‘Thus the early devalopment of cang he same lines as the trade patterns waro establishod in subsequent years, pla tirely in mestizo hands.* The foreign com almost exclusively to financing and wade. culture in Nagros began very much along # previously established on Luzon. With the development of sugar production in Negros, Britain began to as- sort her commercial role in the Philippines even more forcefully. The one man most responsible for this was the British diplomat-entrepreneur, Nichola Loney. Loney first came to Menila in 1866 to join his brother, who had previously established the commercial house, Loney & Co.. Ltd. Realizing the fotential of sugar in Negros, and having been appointed British Vice Consut there in 1857, Loney established a commercial house in connection with the firm, Ker & Co., Ltd, Loney & Ker soon became the most powerful com- | engaging in the usual financing and trade Loney began to see that backward milling tific approach to cane production and operations. More importantly, techniques, and the absence of any scien .. milling was limiting the potential of Negros. Accordingly. Loney & Ker began to import new varieties of sugar cane seeds from Sumatra, where much ex- perimental work had been undertaken by the Dutch, and introduced a new type of furnace, which enabled planters to burn cane waste (bagasse) 3s their source of fuel in place of the large quaniities of wood formerly consumer ‘The mejor technological advance to occur, however, was the jmportation of more efficient milling equipment. Prior to this time, Philippine cane wes crushed in crude hardwood rollers, turned by hand or by carabao, Boiling vats were obtained from China or were locally produced. These mills were small and quite ini 1s much of the sucrose content (sometimes as high 8s sixty per cent) remained in the crushed cane stalks after milling. Loney reasoned that the introduction of more advanced milling equipment then in use in other areas of tropical cane production would transform the Philippine sugar industry, increasing both the quantity and the quality of the sugar produced. In 1857 the first of a number of iron mills was introduced to Negros by the Loney firm. Of U.K. manufacture, the mills represented the first real application of Western technology to the Philippine sugar industry. The iron rollers of the cattle-powored mills crushed the cane much more efficiently than the old wooden rollers. By 1861 more than a dozen iron mills had been imported with many more on order. Loney & Ker also imported modem evaporator pans and other types of hardware from the U.K."® One technological advance quickly lad to another. In 1860 Loney in- troduced the first steam powered mill to his own Matabes estate in Talisay, Negros. Steam mills consisted of steel rollers which crushed the cane stelks even more efficiently than the animal powered iron mills. They also increased the potential scale of production because the daily capacity of the steam mills was considerably greater than that of the earlier types. By 1864 seven stem mills were in operation in Negros, producing seven thousand tons of suga # year." There were several important consequences following from theseRoots of Dependency 33 developments. As the commarcial houses wore the only sources of finance available for the purchase of this new type of equipment, the mestizo plante who bought new machinery became heavily indebted to the European merchants. The bond between the two groups at this stage became all but Ir- revocable. The new capital equipment was useless for enything save its in- f tended purpose and the size of the investment required a long-term commit- ment to sugar production, All of this, of course, made the hacenderos ulti- mately dependent on the marketing resources and the lending facilities of the commercial houses. The greater scale of production dictated by the new types of machinery created a need for larger plantations to take ad- vantage of greater mill capacity, Massive tracts began to be carved out of the Negros forests : High world sugar prices throughout the late 1850's and 60's resulted in sharp increases in sugar exports from Iloilo, from less than @ thousand tons in 1856 to 5,400 tons in 1859, to 17,800 tons in 1863. Negros rapidly . and sugar quickly replaced textiles es the major F export product of the region.'? Land prices increased, in some cases trebled, B but the abundance of fertile, unoccupied land along the Northwest coast of. f Negros encouraged rapid expansion of production.'? By 1860 the Bence Espaiiol-Filipino, Russell Sturgis & Co., Peele Hubbell & Co., and Loney & Ker all began to import milling equipment and to invest heavily in sugar."* Loney predicted that Negros would be the first area in the Philippines to develop along the lines of Eurdpean plantation settlements in the Caribbean p and elsewhere. The British Government was especially persistent in trying to persuade the Spanish to liberalize existing regulations which thwarted greater E foreign participation in plantation development. A few Europeans did manage to overcome the various obstacles set by the Spanish; by 1861 there were f three non-Spanish European planters in Negros and five years later there ware an estimated twenty European plantations on the island," There were even thoughts in the late 1860's of attempting to encourage disaffected former 'slaveholders from the American south to settle in Negros, although there is no “evidence that any of them ever did.'* In the main however, European planters did not materialize and those ‘few who did establish themseives on the pd proved to be exceptions. The ireasons for this had to do largely with the ambiguity of Spanish policy, which as reflected in a host of bureaucratic restrictions. Uncertainty regarding im- E portant legal questions affecting the position of foreigners in the colony con- Elinued as a source of frustration, The 1817 law prohibiting Protestants from {8Cquiring land was still in force and the only way to circumvent this law was to Pitegister property in the name of a Spanish national. European planters were F perhaps understandably chary of employing this ruse as it subjected them to (Preat difficulty in the event of fraud or upon the death of the “dummy” irtner.’? A second hindrance was the,difficulty in securing the necessary labor re- Wired to operate a sugar plantation without violating the intemal passport "equlations governing the migration of labor from one island to another. Some lol these regulations applied — in theory — to all planters of whatever tionality, but if any eradence Is to ba given to the chronic complaints of the34 Roots of Depandency Europeans, Spanish application of these laws was selectively and orraticaly | enforced at best. The European planters charged that thoy were often single out for special mttantion by hostile Spanish authorities and there was evidence of truth in this allegation. By for the most voxing regulation imposed by the Spaniards, and the ong which causod the greatest outcry from the European community in Negros ang Nollo, was the provision that all foreigners had to carry passports for interna) travel betweon the islands. These passports wore obtainable only in Manita, took @ month of moro to obtain, and ware valid for only six months. Since fre. quent travel across the straits of Guimaras botween Negros and lloilo (twenty miles distance) was a requiromont of the sugar business, the Europeans eithe, hod to travel clandastinoly without a passport, or subject themselves to a bi- annual, sixteon-day nuisance journey to Manila to ranew their passports. In spite of continued and vigorous protest on the part of the British and other foreign nationals, the internal passport policy remained in effect until 1884, and proved to be singularly effective in limiting European plantation develop- ‘ment in Negros." Those curbs on European participation-left the field to the mestizos almost by default. Most of the mestizos who had hitherto been largely engaged in the textile trade in Hoilo shifted over to sugar production. As in Luzon, a Chinese trading class emerged in a brokerage role between the European com- mercial houses and the planters thomselves."" In this respect, the Negros sugar industry followed the pattern es- tablished earlier in Luzon, although in Negros growth was more rapid and more concentrated geographically. There were other key differences, the major one concerning the absence of an adequate indigenous Visayan labor force to sus- tain the heavily labor-intensive sugar cultivation. Problems in labor forca were compounded by the seasonal nature of cane cultivation. In sugar production, heavy field labor inputs were demanded during the five and a half month harvest season, but only token labor requirements were needed during the remaining part of the year.’ Moreover, the physically exhausting and onerous nature of cane harvesting — perhaps the most demanding labor task in tropical agriculture — mitigated against attracting large numbers of laborers on other than a coercive basis.** This situation, by no means unique to the Philippine canefields of course, Contributed to the creation of shocking labor conditions and extreme forms of exploitation. Cane-cutting was (and remains) heavy, hot, dangerous and Physically taxing work. Only tha young and the physically strong could survive the work regimens | imposed in the canefields and even the toughest workers were oftan physically burnt out in a few years, especially at a prevailing wage, rate of betwoon six and a half and twelve cents per day, which allowed no provision for an adequate diet.” For the planters, the best solution to the chronic | importation of Chinose coolie labor. The planters conten eee ie Spanish authorities to permit recruitment in Chine, but the Spanish resisted because after long experience they undorstood that imported Chinese lobar aid not stay bound to the canetiolds and would ultimately further strengthen the ee sna NAAN resend| Roots of Dependency 36 Chinese grip on retail trade. The Spanish we: of their periodic campalgns to break the Chine and had no wish to add further to th in tha 1860's, engaged in one $8 control over rural marketing problems in this regard.? A number of the pioneer planters on Negros attempted to solve th labor problems by bringing workers and their families with them from Panay, but this proved impractical for all but the smallest plantations. Most of the Negros planters began to recruit labor from Panay, which. with @ population of over 600,000 in the 1860's was one of the most densely settled islands in the archipelago. But the problem of labor recruitment was made more difficult by the internal passport system. A laborer recruited in Panay for working in Negros wes required to obtain cteerance from his village cabeza or headman. The cabera was responsible to the Spanish authorities for the collection of tax from every laborer in his village. Since all adult males were required to work a certain number of days per year off government projects (roadwork and so forth),permission to leave the village could only be gained by obtaining a recsipt acknowledging fulfillment of this obligation. This had to be signed by the local governing body and by the local priest. After collecting the various signatures, the prospective laborer could then obtain a passport good for thre months. Aside from the complicated bureaucracy of the system, passports were difficult to obtain because priests and cabezes were reluctant to lose tex revenue in the event that the worker did not return to his native village. Workers were often shanghaied or spirited away, and this practice prompted the Spanish to conduct periodic searches on Negros plantations, seeking out il- legal entrants. By the late 1860's many thousands of laborers ware working in Negros canefields illegally, and the whole passport system began to crumble. ‘The pattern of seasonal migration for the cane harvest had itsorigins in the early years of hacienda development and it has been a chronic feature of sugar production there ever since. A highly complex tenancy system evolved in Negros in conjunction with the annual migration of large numbers of workers. Such a system never evolved to the same degree in Luzon.Changes on the Land The decades efter 1850 were witn completely transformed the indigei social and political economy. The inward-looking, village-orlented subsistence economy of the early nineteenth contury was largely replaced by one which responded to national and inter- national market forces. This created a number of secondary effects which wrought hitherto unparalleled changes in village life. An early response to this shift was the development of totally new legal and social attitudes toward the concept of land ownership. With the demonstrable profitability of export agriculture now a factor of some moment, it also became clear that product- ion of this nature was totally incompatible with the traditional pattern of communal ownership of land and autarkic, subsistence production. The new export economy put a premium on good cropland and the relative value of all land increased as commercialization proceeded. As value began to rise, land began to fall under the private control of mestizo planters and entrepre- neurs, who were, in the main, of mestizo origin. The colonial government was not slow in reacting to this changed sitwation and the Spanish implemented legislation supportive of the landlord class. An early concern of Western merchants and commercial producers was the desire to establish the legality of private land ownership and to obtain security of title within a legal framework. Prior to 1870 colonial legislation relative to lend ownership was confused end contradictory. At about this time efforts were made to bring land questions under the jurisdiction of government by moans of the legal system. A program of land survey snd tide registration was initiated and the courts became the arbiters of conflicts regarding land ‘ownership. Simply put, this had the effect of pitting the mestizo-dorninated ex- port Interests, who understood the legal system and who had the financial ability to manipulate it, against tradition-oriented /ndios, who clung to the now-outmoded attitude and values, and who increasingly found themselves pauperized and dispossessed of their land by a legal system they did not un- derstand and did not accept.' For the first time, tenant farming became an integral part of Philippine agriculture, in Negros and in Ilocos, migrant labor and agricultural wage labor Practices developed. Many small farmers lost their land to the pacto de rotrovente aystem, which permitted creditors to demand the forfeiture of lend 37 to changes on the land which38 Roots of Dependency tices developed into an, in- tion and dispos- able to secure wus lending prac ; hich led in turn to pauperizat edit, mostizo farmors W in lieu of debt repayment, Usurios stitutionalized rack-rent system, w! session. By controlling rural lines of cr title to the best farmland in Central Luzon. Tho omergence of wide-scale tenant farming at this time seems idiosyncratic in the light of the existence of much vacant land and the aby sence of massive concentrations of population. As late as the 1920's large amounts of land in Central Luzon were still available for settlements. The major cause of tenancy under such conditions was uneven rates of accumula tion, Chronic shortages of capital in the traditional sector coincided with rapid increases in land values, especially such land as had access to ‘the major marketing areas. When coupled with the growing temptations to use the legal machinery to dispossess traditional farmers, this combination of factors spelt doom for the independent, community-based mode of production. / Farmers in need of capital to participate in commercial crop production had only one possible source of funds: advances from middlemen, for which land title wes put up as collateral. Since the land was usually more valuable than the loan, there was great temptation for the moneylender to hold the debtor strictly — and often unfairly — to the letter of the contract, knowing that the first slip, the first missed payment or other failure to comply with every par- ticular of the contract no matter how petty, would gain for the creditor the Greater prize of the land title. Since farming always involved some element of risk, whether due to price fluctuations or the whims of nature, debtors always found the cards stacked against them The pacto de retroventa proved to be 8 legal blunt instrument In the hands of the commercial moneylenders. Understandably, when such tech- niques were employed to dispossess people and deprive them of their only source af livelihood, feelings of bitterness and a sense of grave injustice festered, often for generations. Social tension, although certainly not unknown heretofore, became an endemic feature of the rural landscape. The expansion of export crops had e considerable impact on land values in the late nineteenth century. Even though sugar prices fell gradually in the 1860's and ‘70's, milling advances more thancompensated for this and sugar production became increasingly profitable until the mid-1880's. Some land in Luzon was taken out of rice production and converted to sugar; more typically, the newly opened land was given over to sugar production from the stert. In 8 period of growing population and growing pressure on the land the effect wes the same: land for both sugar and rice became more expansive and the | tive to secure it became more intense. ind the incen- Those having access to capital were often . cumstances into great fortunes, but for the overwheteitg bint totunsin ce population this was not possible. In the days of subsistence 9 ficult ‘ ih . were few social distinctions and food for all, and labor was organized in a come. munity atmosphere (bayanihan). The shift to cash crops wee ony peek communal production and the fundamental equality of the cl dave we OeRoots of Dependency \ ee tor aha ice, Were rising that @ number of malor tend purchases were re en resem: including the 13,000-heetare Molaton eet neenere Rizal it quled in 1880. wt ae 23:000-hec care Cagayan Estate in Isabela ac- in 1894.2 /000-hectare San Jose Estate in Mindoro, acquired On the eve of the Revolu i me i an 253 tn eit mn over sixteon million dollars. The haciendas vatiod trom unimproved tracts to extremaly valuable wet rico and sugar land. In four Luzon provinces, Bulacan, Laguna, Cevite and Morong, friar lands dominated the agrarian economy and the Church controlled a significant proportion of the t ¢ otal : - imately 160,000 tenants worked on the friar lands. bieland® Approx «The religious orders in the Philippines thus held a fair percentage of the most valuable and productive land in the colony. The estates were operated along commercial lines and in later years (especially), served as the economic * base for the considerable political power exercised by the Church.‘ Exploitative labor conditions on the friar estates were a source of continued unrest in the late nineteenth century. Perhaps the most notorious abuse was the letting of } unimproved land to tenants for (usually) three years. After bringing the land into production tenants were charged a significantly higher rent based On the improvements of their own making. The obvious unfaimess of this particular ‘according to one English merchant, " very sore point with them.”* kick very much at thi But fesentment of Churoh power in tha Philippines was by no clusive’to the friar estates. Throughout the Spanish era the dividing line F between Church and State was blurred, often bayond recognition. In many towns and villages the Spanish priest was the sole representative of colonial authority. Clerical abuses were notorious and proved to be a constant source of friction between the Filipino masses and the Spanish. Part of the problem was caused by the apparent inability of the Spaniards to attract competent men to serve the Church in the Philippines. Many priests had only smattering of ; religious training and were often motivated by decidedly worldly considera- tions which at times approached freebooting* c 1 in the Philippines was all but absolute and priests exer- cised slow ‘autherity over all who lived within their jurisdiction. Peasants wore not permitted to change their domicile without the written consent of the local ‘also exercise the power of arbitrary arrest, and according to be accepted as fact in court, no: additional d to obtain conviction.” jests could ‘0 law a priest's declaration had Proof or evidence being require i | export mercial production of agricultural oh the 1s a whole, including those sectors yy. For example, develop- Tha rapid expansion of commercial Stops had a profound effect on the s Which were not directly involved in the export econorn