Part 2 (2/2)
The Royal Company.
The second important event during Basco's rule was the establishment of the ”Real Compania de Filipinas” by royal decrece of March 10, 1785. The capital of the company was fixed at eight million pesos divided into 32,000 shares of two hundred and fifty pesos each; the king bought four thousand shares, and the citizens of Manila were allowed three thousand. The chief object of the company was to establish commercial relations among the different colonies, and also between the colonies and Spain; to supply Manila with the products of Europe, and, in return, to carry to Spain not only the products of the Philippines, but also the merchandise coming from the Oriental countries. The second important object was the encouragement of Philippine agriculture, as shown in section four of the charter, which required the company to invest four per cent. of its net profits in some extractive industries, chiefly agriculture. In order to help the company, all the laws and decrees which prohibited the importation of Oriental cloths into Spain, were repealed, and the products of the Philippines were exempted from all kinds of duties both in Manila and in Spain. Furthermore, the merchants of Manila were allowed to go to the Asiatic ports for trade, and the Chinese who came to Manila were allowed to trade freely without subjecting themselves to any restrictions. However, the old Manila-Acapulco trade was not to be disturbed, for the company could not send s.h.i.+ps to Acapulco.
The company encouraged the production of silk, [135] indigo, [136] sugar, [137] cotton, [138] and especially of pepper and other spices. For this purpose it bought lands, established posts in Ilocos, Bataan, Cavite, and Camarines, and offered prizes. It also gave stimulus to manufacturing by establis.h.i.+ng textile factories.
In spite of the special protection and privileges granted to the company, it declined from year to year. In 1805 it was rechartered, and given fifteen years of life and the same privileges as before; its capital was fixed at twelve and a half million pesos divided into shares of two hundred and fifty pesos each; foreigners were allowed to own shares; and the s.h.i.+ps were allowed to sail directly from the Asiatic ports without stopping at Manila; and finally the three-year privilege, [139] allowed to foreigners at the request of the company in 1789, of importing into Manila Asiatic goods, and exporting the products of the country, was made perpetual. In 1830 its privileges were revoked, and Manila was left open to foreign commerce and navigation.
What were the causes that led to the ill success of the Royal Company? Among the minor causes mentioned was the indifference of the residents of the Philippines; for, as Zuniga says, [140]
”taught to gain in New Spain what is necessary for their comfort, without any more work than sending a memorial once every year, it is hard for them to engage in a commerce which is servile and vexatious; and, accustomed to exorbitant profits, they cannot adapt themselves to the gradual profits in a store; * * *. Furthermore, the company neglected to import the goods from Europe, such as wines and groceries, which the foreign s.h.i.+ps brought at great profit.”
It also failed to establish direct trade relations with China and India, but depended solely on buying the goods which were brought there by the Chinese and other foreign traders; hence, it had to pay higher prices for the Oriental goods it sent to Europe. The company, too, overestimated the importance of certain Philippine products, especially spices, which were produced much more cheaply in Sumatra and Java. Though allowed to invest only four per cent of its net profits in agriculture during the first years of its existence, it invested great sums in buying lands, made advances to the producers; in other words, it engaged in much speculation, which proved disastrous. It also gave premature attention to the development of manufacturing. The chief cause, however, of the failure of the company was the fact that it was not given control of the Manila-Acapulco trade, which continued to absorb the attention of the very men, who, because of experience in the country, would have helped the Company during its formative years. [141]
According to Dr. Tavera, the Royal Company introduced capital, which was essential for economic development. [142]
The opening of the ports.
Even before the coming of Basco, the taking of Manila by the English in 1762 had a good economic effect, for it acquainted England with the natural resources of the Philippines, and the possibilities for material development. [143] Perhaps as a result of the information thus gained, we find an English commercial house obtaining permission to establish itself in Manila in 1809. And in 1814, probably due to the liberalizing influence of the war of independence just closed in Spain, it was stipulated that all colonial ports still restricted should be opened to foreign traffic, and that foreigners should be allowed to enter, and engage in commercial activities; thus was swept away the restrictive colonial policy, which had prevailed among the European nations, and which Spain was the very last to abandon. In the beginning, however, there was need of special royal permission for each foreign house established. Later on the permission of the Governor General only sufficed. [144] An earlier edict of the Philippine government, repeated in 1828 and again in 1840, forbade foreigners to sell at retail or to enter the provinces to carry on business of any kind. [145] In 1842 there were in Manila thirty-nine Spanish s.h.i.+pping and commercial houses, and about a dozen foreign houses, of which seven or eight were English, two were Americans, one was French, and another Danish, while consuls of France, the United States, Denmark, Sweden, and Belgium resided there. [146] By about 1859, according to Bowring, there were in Manila seven English, three American, two French, two Swiss, and one German commercial establishments; and in the other ports, there was no European business house, except one in Iloilo, where there was an English firm of which the British vice-consul was the directing partner. [147]
Once Manila was opened, the advocates of greater freedom did not rest content with only one free port, because there were great difficulties in connection with the exportation of products from the places far from Manila. The products of the Ilocano provinces, southern Luzon, and the Visayas, and even Mindanao, had all to be taken to Manila, and from there, exported. Thus, the system entailed unnecessary risks, waste of time, and extra expense. [148] Accordingly, at the request of the government of the Philippines, Royal Order of September 29, 1855, approved the opening of the ports of Sual (Pangasinan), Iloilo, and Zamboanga. And lastly, by Royal Decree of July 30, 1860, Cebu, which up to that time was obliged to send her products for exportation either to Manila or Iloilo, was opened.
Effects of the opening of the ports.
Taking the increase of exports as an indication of greater agricultural and commercial activity, we find that, with the opening of the ports, exports increased; and these now consisted of the products of the country, instead of manufactured goods brought from elsewhere in the Orient. [149] By 1839, the Philippines exported 2,674,220 pesos of her own products, as against 500,000 pesos in 1810. [150] Sugar in 1782, was the only product which was attracting any attention, because at the time, thirty-thousand piculs of it had been exported; in 1840, 146,661 piculs were exported; in 1854 the amount had increased to 566,371, almost four times greater than in 1840; and in 1857 the amount reached 714,059 piculs. [151] Similarly, the amount of hemp exported increased, in spite of the fact that it found its way in the world's market for the first time only in the early part of the nineteenth century. [152]
The same effect that was observed in connection with the opening of Manila followed that of the other ports. The production of the regions around the new ports increased as shown by export statistics, and commercial activity was stimulated, as shown in the greater movement of s.h.i.+ps. For example, Sual in 1857 sent abroad twelve s.h.i.+ps with rice, and two hundred and twenty-five s.h.i.+ps to Manila, also loaded with rice; in 1860, sixty s.h.i.+ps went abroad, and one hundred and seventy-two to Manila, loaded mostly with the same cargo. Again, although in the first three or four years there were no marked increase in her exports, Iloilo by 1859 began to show signs of increasing productivity. [153]
Its total value of exports, which in 1858 amounted to 82,000 pesos, had increased to 1,000,000 pesos in 1863.
Furthermore, the opening of Iloilo encouraged production in the island of Negros. Previous to the new era the conditions there were described thus: ”... before the happy event that we are considering, that island was uncultivated, thinly populated, and above all, without any kind of production to keep commerce alive; besides the Governor, the Alcalde mayor, and the curates sent by the religious orders, there were no other Spaniards; only one European, a French doctor by the name of Gaston, had settled there, cultivating sugar cane, and now and then sending some cargoes to Manila. [154] Again, Jagor tells us that in 1857 there was not one iron mill to be found on the island; and that in working with the wooden mill, about 30% of the sap remained in the cane, even after it had been thrice pa.s.sed through. However, the old wooden presses were disappearing, and were being supplanted by iron mills run by steam or carabao. These mills the natives had no difficulty in obtaining because they could get them on credit from the warehouses of the English importers. Instead of the old Chinese cast-iron pans which were in use, far superior articles had been imported from Europe; and many large factories worked by steam power and with all modern improvements had been established. In agriculture, likewise, great progress was noticeable. Improved plows, carts, and good farming implements generally were to be had in plenty. [155]
After the opening, the 4,000 piculs of sugar produced in Negros in 1856 had increased to 100,000 in 1864 for exportation; there were 25 Europeans in the same year, 7 machines run by steam in the towns of Bacolod, Minuluan, and Bago, and 45 run by animal power. Similar advance characterized the other parts of the islands. [156]
The increased production, due to the improved methods of cultivation, had a great effect on the inhabitants of the islands, for, not only did it bring about greater welfare because of more adequate satisfaction of their necessities, but also because it developed a demand for other necessities; hence, raising the standard of living. Referring to the same phenomenon in Iloilo Mr. Loney in a report as vice-consul of Great Britain, said that the current testimony of all the elder residents in the province was that during the last few years a very marked change had taken place in the dress and general exterior appearance of the inhabitants of the large pueblos, owing in great measure to the comparative facility with which they obtained articles which were formerly either not imported, or the price of which placed them beyond their reach. In the interior of the houses the same change was observable in the furniture and other arrangements, and the evident wish to add ornamental to the more necessary articles of household use. [157]
And since the opening of the ports, a great many people, especially mestizos, who before traded in manufactured goods purchased in Manila, abandoned their business, and, unable to compete with the Chinese dealers, had betaken themselves to the raising of sugar, and other products to the great benefit of the country. [158] And, thus, the greater exploitation of natural resources gave rise to the demand for better means of communication, [159] and other material improvements.
The material progress of the Filipinos wrought great changes in the social population, mind, and structure. Though not affecting the majority of the people, economic advance paved the way for the development of the spirit of independence and criticism, which characterizes an independent and stable middle cla.s.s. It was that cla.s.s, which, because of contact with the new ideas brought by the newcomers, and of increasing material power, first questioned the abuses of the government, and demanded social reforms. [160]
Furthermore, the law that all the energy in the growth and activity of a population is derived from the physical world, and hence, density of population is dependent on material progress, is well ill.u.s.trated by the increase of population in this country during the last century, especially its first half. [161] In turn, density of population made possible further social progress. [162]
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