Part 9 (1/2)
Monopolies:
1st. Opium Contract $ 576,000 2nd. Stamped Paper and Stamps 646,000 ---------- Total $1,222,000
Lottery:
1st. Sale of Tickets, Less Cost of Prizes $ 964,000 2nd. Unclaimed Prizes 30,000 3rd. Sundry Receipts 6,000 ---------- Total $1,000,000
Income of Government Property:
1st. Forestry Privileges $170,000 2nd. Sale and Rent of Public Land and Buildings 85,000 3rd. Mineral Privileges 2,000 -------- Total $257,000
Sundry Receipts:
1st. Mint (Seignorage) $200,000 2nd. Sundries 98,300 -------- Total $298,300
The largest source of income is the Cedala or Poll Tax. Every man and woman above 18 years of age, residing in the Philippines, whether Spanish subject or foreigner, is required to have in his or her possession a paper stating name, age, and occupation, and other facts of personal ident.i.ty. Failure to produce and exhibit this when called upon renders anyone liable to arrest and imprisonment. This paper is obtained from the internal revenue office annually, on payment of a certain sum, varying, according to the occupation and income of the person from $0.75 to $20.00, and averaging about $3.00 for each adult. An extra sum of 2 per cent. is paid for expense of collection. The tax is collected at the Tribunal in each pueble, and 20 per cent. is retained for expenses of local administration, and 80 per cent. paid to the General Treasury. This tax falls heavily on the poor and lightly on the rich. The tax on industry and commerce is similarly graded according to the volume of business transacted by each merchant or merchantile corporation. The tax on real estate is absurdly low and levied only on munic.i.p.al property and on the rent, not the value.
The tax on imports is specific and not ad valorum; it amounts to about 13 per cent. of estimated values. The free list is very small, nearly everything of commercial value which is imported being subject to duty. The revenue from imports has increased from $566,143 in 1865, to $3,695,446 in 1894. It was about the same in 1897. On the other hand the export tax, which was nothing in 1892, the loading tax, which was nothing in 1893, and the unloading tax, which was nothing in 1894, have all been increased in the last few years in order to meet the expenses of suppressing the insurrection. These three items yielded nearly $2,700,000 in 1897.
The monopoly of importing and selling opium is sold, by auction, to the highest bidder for a term of three years. The present contract runs until 1899, and yields $48,000 per month.
Every legal doc.u.ment must be drawn up on paper containing a revenue stamp, engraved and printed in Spain, and every note, check, draft, bill of exchange, receipt or similar doc.u.ment must bear a revenue stamp in order to be valid. These stamps and stamped paper yielded a revenue of $646,000 in 1897.
The lottery is conducted by the Government--the monthly drawings taking place in the Treasury (Hacienda) Department. The sale of tickets yielded $1,000,000 over and above prizes in 1897.
In a report to General Merritt, on August 29th, I recommended that the opium contract be cancelled and the lottery abandoned during our occupation of Manila; and as the poll tax and the tax on industry and commerce had been paid for the most part in the early part of the year, our chief sources of revenue were from the custom house, the sale of stamps and stamped paper, and the sale of such licenses as the law allowed (amus.e.m.e.nts, liquor saloons, etc.), for the benefit of the city of Manila as distinguished from the general revenue. I estimated the total at about $500,000 per month.
The expenses of administering the military government of occupation (apart from the expenses of the army) will consist of the current expenses of the office at the Provost Marshal General's office and its various bureaus--at the custom house, internal revenue office, and other offices--and the salaries of interpreters and minor employes who are anxious to resume work as soon as they dare do so. An estimate of these expenses was being prepared at the time I left, but was not completed. It can hardly exceed $200,000 per month and may be much less. This should leave $300,000 (silver) excess of income per month, to go towards the military expenses of occupation.
As soon as it is decided that we are to retain the islands it will be necessary to make a careful study of the sources of revenue and items of expenses for all the islands, with a view to thoroughly understanding the subject, before introducing the extensive changes which will be necessary.
Currency.
The standard of value has always, until within a few years, been the Mexican milled dollar. The Spanish dollar contains a little less silver and, in order to introduce it and profit by the coinage, the Spaniards prohibited the importation of Mexican dollars a few years since. Large numbers of Mexican dollars remained in that country, however, and others were smuggled in. The two dollars circulate at equal value.
All valuations of goods and labor are based on the silver dollar, and a change to the gold standard would result in great financial distress and many failures among the banks and mercantile houses in Manila. Their argument is that while an American ten-dollar gold piece will bring twenty-one silver dollars at any bank or house having foreign connections, yet it will not buy any more labor or any more hemp and sugar from the original producer than ten silver dollars. The products of the country are almost entirely agricultural, and the agricultural cla.s.s, whether it sells its labor or its products, would refuse to accept any less than the accustomed wages or prices, on account of being paid in the more valuable coin. The result of the change would be that the merchant or employe would have to pay double for what he buys, and would receive no increase for what he sells. While trade would eventually adjust itself to the change, yet many merchants would be ruined in the process and would drag some banks down with them.
The Mexican dollar is the standard also in Hongkong and China, and the whole trade of the Far East has, for generations, been conducted on a silver basis. j.a.pan has, within the last year, broken away from this and established the gold standard, but in doing so the relative value of silver and gold was fixed at 32 1/2 to 1, or about the market rate.
Public Debt.
I was unable to obtain any precise information in regard to the colonial debt. The last book on statistics of imports and exports was for the fiscal year 1894, and the last printed budget was for 1896-7, which was approved by the Queen Regent in August, 1896. Subsequent to this date, according to the statements made to me by foreign bankers, the Cortes authorized two colonial loans of $14,000,000 (silver) each, known as Series A and Series B. The proceeds were to be used in suppressing the insurrection. Both were to be secured by a first lien on the receipts of the Manila custom house.
Series A is said to have been sold in Spain and the proceeds to have been paid into the Colonial Office; but no part of them has ever reached the Philippines. Possibly a portion of it was used in sending out the 25,000 troops which came from Spain to the Philippines in the autumn of 1896.