Institute of Pacific Relations

Steps Towards Economic Planning in the PhilippinesAuthor(s): Catherine PorterSource: Far Eastern Survey, Vol. 7, No. 7 (Apr. 6, 1938), pp. 73-79Published by: Institute of Pacific RelationsStable URL: http://www.jstor.org/stable/3021305 .

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FAR EASTERN SURVEY

Fortnightly Research Service

AMERICAN COUNCIL ? INSTITUTE OF PACIFIC RELATIONS

129 East 52nd Street ? New York City

Russell G. Shiman, Editor

Telephone: Plaza 3-4700 Cable?-Radio: Inparel

Vol. VII ? No. 7 APRIL 6, 1938 ?ff cjg^. *2%

Contents

STEPS TOWARDS ECONOMIC PLANNING IN THE PHILIPPINES

JAPANESE GOVERNMENT GIVEN BLANK CHECK *??

War in China Ushers in Mass Migration Movement Malaya Questions Value of Tea Restriction

Japanese Begin Exploiting Chinese Coal Reserves

STEPS TOWARDS ECONOMIC PLANNING IN THE PHILIPPINES

Catherine Porter

The battle-cry of freedom has almost ceased to be

the leitmotiv of the Philippine drama. The ad-

vocacy by the High Commissioner of a thorough re- examination of the question of Philippine indepen- dence, and President Quezon's tacit assent thereto, as announced on March 15, speak eloquently for the

change in temper in both the United States and the

Philippine Commonwealth during the last year. When the Independence Law was passed by Congress

and accepted by the Philippine Legislature, there was

quite general recognition, especially in

Independence the Philippines, of the fact that some Reconsidered of its provisions complicated the diffi?

culties which the country would be

facing with the approach of independence. President

Quezon's plea early in 1937 for advancement of the date of independence, various as were the interpreta- tions put upon it, precipitated much more thorough consideration of the political and economic changes involved for both the United States and the Philip? pines upon the termination of the present relationship between the two governments, whether in 1939 or in 1946. The outbreak of war in the Far East in the summer of 1937, with its threat of prolonged instability threw into clearer relief the entire Philippine problem, not only as it affects the two countries most concerned, but also in its implications for the rest of the Pacific area and hence of the world.

The Joint Preparatory Committee which visited the Islands in 1937 was originally expected to release its

report shortly after the end of the year. It has not yet

done so, and the prolonged postponement of publication of its recommendations has added to confusion and

uncertainty as to how the wind was blowing in official

quarters. One significant indication appeared in Janu? ary, when President Roosevelt announced that the two

governments had agreed in principle to a plan by which

special economic ties between the two countries would be continued until 1960, on the basis of graduated taxes on dutiable Philippine exports to the United States as

originally conceived in the Tydings-McDuffie Law. The

political status was left somewhat vague. Now the speech of High Commissioner McNutt,

which was broadcast from Washington on March 14, confirms the belief held in many quar-

More ters that there has been a decided Permanent change in sentiment in Washington, at

Relationship? least. Mr. McNutt has made a plea for the establishment of a "permanent

political and economic relationship" with the Islands. The first reaction from Malacanan has been qualified approval, and willingness that the whole question be re-examined. According to first press reports from

Manila, there has been no outburst of resentment on the part of Filipinos such as might have been expected a year ago.

The reason for this is not difficult to explain. After

years of agitation for freedom the Filipinos now face the promise of independence in 1946 under most unfav- orable circumstances and conditions. Not only have the economic provisions of the Tydings-McDuffie Act cre- ated dissatisfaction and uncertainty. More significant

? 73 ?

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74 Steps Toioards Economic Planning in the Philippines April 6

still, the war clouds which have burst over China have

inevitably east a shadow over the neighboring lands. The effect in the United States has been to split oppos-

ing camps still further. People who have felt that the

United States was morally bound to grant indepen? dence to the Philippines may now feel that there is a

deeper moral obligation to protect the country from

possible aggression. Those who have favored some kind of close continuing relationship, trade or other-

wise, may now favor complete withdrawal. It is too early yet to know what the full repercussions

in the Philippines will be of the March 15 announce- ment. But one thing is certain: no matter what changes may be effected in the relationship between the United States and the present Commonwealth Government in the Philippines, the Islands' economy must be altered to a greater or less degree. Our present purpose is to consider the economic problems faced by the Philip? pines and steps being taken to meet them.

In brief, the situation is this: The country's two

leading export products, sugar and coconut oil, are doomed to lose some part of the Amer-

Leading ican market. There is no likelihood of

Exports the first product finding new buyers. Threatened Without special preferences high-cost

Philippine sugar cannot compete in world markets with the Javanese product. For coco? nut oil, the only alternative outlet at present is in

Europe?but there the important oil consumers have

developed their own crushing industries, protected by tariffs. The possible emergence of other markets in the Far East is too uncertain to bolster the industry at this crucial moment.

Paradoxically, the two industries which are threat? ened with curtailment, if not extinction, are now a source of unusual revenue to the Commonwealth Gov? ernment. Last year the United States refunded to the

Philippines some Fl 09,000,000, the proceeds of the excise tax on oil from Philippine copra. Under the last United States sugar bill, an additional income of about

Pl5,000,000 in processing tax remittances is assured the Commonwealth annually until 1941. Since the normal annual budget of the country is only about P70,000,000 the administration finds itself at the moment in the

happy position of being able to make far more exten- sive plans for the next few years than would otherwise have been possible.

These plans look toward economic development along different lines: crop diversification, industrialization, further development of the Islands* great natural re? sources such as minerals and forests. Inevitably, with the growing emphasis in other parts of the world upon economic nationalism, and with the gradual closing of the free market to which their economic development has been geared during the last three decades, much of the planning now under way in the Philippines is in

terms of self-sufficiency. In his message to the First National Assembly,

President Quezon stated the objective clearly. "We want to build up a reasonably stable

Some Self- economic structure capable of serving Sufficiency the financial and other needs of the Essential nation, supplying the masses of the

people with the basic social require- ments and the essentials in food, clothing, and shelter, and providing them with the opportunities to toil and earn a decent livelihood."

In order to attain this objective, the following prob? lems must be dealt with in any coordinated attempt to

plan a new national economy: land-holding and ten?

ancy, a system the evils of which are not unknown in other countries; crop control, which will be necessary in order that the large cash crops which have depended largely upon the American market may be reduced in

proportion to the demand that may be reasonably ex?

pected for them when they have to compete in world markets. Allied to this is, of course, the need to encour-

age the initiation or intensification of other agricul? tural projects, to fill domestic needs and if possible to

provide other export commodities; industrialization, to furnish employment, to supply domestic markets with domestic raw materials, to aid the country in attaining some degree of self-sufficiency in manufactured goods, and to provide new goods to sell in foreign markets, American and others; public works, such as roads, har- bor improvements, water works; banks and credit

facilities; taxation and finance; labor. The first step of the National Assembly, in accord-

ance with the President's wishes, was the passage of Commonwealth Act No. 2 creating the

Government National Economic Council, to answer

Assuming "an urgent national need." Thus was

Leadership the administration committed, in the words of the President, to a "definite

economic policy. We don't believe in the economic

philosophy of 'laissez faire'. We favor government leadership in production activities. We believe in plan? ning the National Economy." The function of the National Economic Council thus created is "to advise the government on economic and financial questions, including the diversification of crops and production, tariffs, taxation, and such other matters as may from time to time be submitted to its consideration by the

President, and to formulate an economic program based on national independence." The CounciPs objectives are to make the Philippines self-sufficient in food

supplies. The National Development Company is one of the

most important agencies entrusted with carrying out the economic policies of the government. Originally established for this very purpose in 1919, with a capital of P50,000,000, the company was ordered liquidated in

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1938 Steps Towards Economic Planning in the Philippines 75

1927. In 1934 it was revived, and an Act of the Com? monwealth Government late in 1936 converted the

company into a public corporation "to serve as an

agency of the Commonwealth of the Philippines in the furtherance of its economic policies." It was

capitalized at P50,000,000 with the government sub-

scribing to 50% of the capital stock. The avowed objectives of the company are: to pro-

mote and maintain a sufficient general production by an efficient coordination of the productive forces of the country; to secure a stable market for Philippine products; to engage in commerce, industry, mining, agriculture, and other enterprises which may be neces?

sary or contributory to the economic development of the country or important to the public interest; to stabilize prices of articles of prime necessity, such as rice. How the National Development Co. is operating through subsidiaries, what some of its future plans are, will be treated further on in this paper in connection with specific projects.

One of the first lines of attack was the food problem. This should not assume too serious proportions. In

fact, it has been predicted that even Food under a much simpler and more re- Problem stricted economy, there is little likeli- Solvable hood of real want among the popula?

tion. But the national planners are

looking toward a more varied diet for their people and therefore a healthier race. To this end, the gradual development of a dairy industry is contemplated?for dairy products make up the largest food import of the

country, a fact the irony of which has been duly stressed in criticisms of American farm groups' activi? ties with regard to legislation taxing coconut oil. The areas of public lands to be leased for grazing have been increased; the livestock population in the Philip? pines is increasing more or less steadily, thanks to the success of the fight against rinderpest. The Bureau of Science is surveying the Island waters as a first step in the development of the fishing industry; the fish and game laws are being studied with a view to lighten- ing taxes on native fishermen and putting a stop to

illegal practices. The staple food of the country, rice, has of course

received primary attention. The National Rice and Corn Corporation was formed as a subsidiary of the National Development Co. early in 1936 with a capital stock of P4,000,000 which was subscribed and fully paid by the holding company in June 1937. In the first two years of its existence, the NARIC has attained a marked degree of success in stabilizing the price of

rice, in assuring the population an adequate food sup? ply at a price within the Filipino's capacity to pay, and in assuring the farmer a fair price for his crop. There is no reason why the land cannot grow more than

enough rice for the Islands' population, if only a slight

margin of profit is assured the grower. In fact, those who have been studying the rice problem predict that this is another crop which may soon have to come under a control scheme, lest overproduction further

complicate the agricultural situation. Control of crops, not a simple problem in any

economy, presents particular difficulties in the Philip? pines, which is predominantly an agra-

Crop rian country. It has been estimated Control that nearly 30,000,000 acres, or 40% Indicated of the total area of the islands, is suit-

able for agriculture, yet only about one third of that is under cultivation. All but 10% of the cultivated area is given to rice, coconuts, corn, abaca, sugar and tobacco. Only two of these are primarily for home consumption. Moreover, some 20% of the

country's imports may be classified as foods, either raw or manufactured. Since many of the former might well be grown in the Philippines, the indicated line of action is the retirement of some sugar and coconut

lands, and the substitution of other food crops. (Other important exports, such as abaca and tobacco, which are not immediately affected by special legislation or

special provisions of the Independence Act, are not considered here.)

By the enactment of the new United States sugar bill in September last year, the administration of

Philippine sugar production and quotas was trans- ferred to the Commonwealth Government. Among the duties of the new sugar office in the Philippines is the allotment of quotas for production, based on estimates of domestic consumption and absolute quotas for ex?

port set by the United States sugar law. Stimulating greater domestic consumption and planning gradual retirement of considerable areas of sugar land are nec?

essary accompaniments. Actually, last available sta? tistics indicate that the area of sugar cultivation had increased. In spite of the fact that the industry faces curtailment under the terms of the Independence Act, the immediate rewards are still great enough to encour-

age production. It is obvious, therefore, that along with government

regulation of crops must go some attempt to enlighten the farmer, to assist him in making

Insuffieient the transition to other forms of agri- Aid to culture and in improving the yield of Farmer his land and the quality of his crop.

For the farmer, quite generally as a

class, is bound by tradition no less than by debt. It is at this point that more government help would seem to be called for. It has been estimated that actually only about P600,000 has been spent annually on purely agricultural development, or about four centavos (two cents) per head of population. Commonwealth Act No. 85 created special agricultural funds through ear-

marking 5% for agricultural work of the general fund

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76 Steps Towards Economic Planning in the Philippines April 6

of every municipality and province. The national

budgets for 1938 and 1939 carry normal appropriations of some P5,000,000 for the Department of Agriculture and Commerce. When it is considered that in that

department there are over 5,000 employees charged with studying the administration of public lands; the

conservation of public forests; promoting agriculture through experiment and extension work, through en?

couraging farmers to use modern agricultural methods,

through seed selection, and so on, down through com?

merce, mining, meteorological work and publications, the appropriation hardly seems adequate.

In its handling of the land question, some observers feel that the Quezon administration will meet its stiff- est test. The Constitution of the Philippines, Article

XII, Section 4, provides: "The National Assembly may authorize, upon payment of just compensation, the ex-

propriation of lands to be subdivided into small lots

and conveyed at cost to individuals." The President has requested the appropriation of some P5,000,000 from the coconut oil excise tax refund, to be applied toward such purchase. The procedure by which private property is to be acquired has been set forth by execu-

tive order: property to be paid for at not more than

the assessed valuation as determined by government agents for tax purposes; an appraisal committee in

each chartered city and province to determine values in expropriation proceedings, such committee including the treasurer and engineer of the city or province as

the case may be. In addition to private lands thus to be expropriated,

there is a vast public domain to be parceled out to the

land-hungry Filipino. Surveys are be-

Expropriation ing made in the less developed areas, as and Public in Davao, Cotabato, Lanao and Zam- Domain boanga where public lands along new

public highways are to be made avail?

able to homesteaders. The National Assembly now has

for consideration a bill which provides for a non-profit landed estates corporation with a working capital of Pl 0,000,000. This plan has been drafted to incorporate all the best features of agricultural development and land settlement projects previously presented to the

Assembly. Under this plan, several subsidiary corpo? rations are to be created in localities where lands are to be subdivided for settlement. Settlement projects are to be financed by mortgages on property and im?

provements. The corporations are to finance settlers, who will be selected on a strict basis of character and industriousness. One important provision prevents set? tlers securing loans from any individual or organization outside the corporation ? another safeguard against usurious practices prevailing in the past. If this plan is adopted, it will probably affect the entire adminis? tration of public lands and the manner in which private estates may be subsequently acquired by the govern-

ment. The high cost of expropriation of landed estates, to

the government and in turn to the tenant, may operate against the complete success of that plan, but it may in time help to solve the problem of the tenant family which is attached traditionally, as well as by contract or by debt, to a particular section of land. There are

thousands of families throughout the Islands who, for

these reasons, will be loath to try homesteading or

migration to other parts of the country, even if such moves seem to promise an improvement in their eco? nomic status.

Part of the land problem is this very distribution of population. Although the country as a whole is

underpopulated, the population den-

Population sity is as high as 628 per square mile

Badly in Cebu, and only little less in Iloilo. Distributed In many areas, the population is too

dense to be supported at anything like

decent standards. On the other hand, in Mindanao

there are only 36 persons per square mile?and only 15 in one of the provinces of that island. At the same

time Mindanao, which makes up nearly a third of the

land area of the Philippines, has largely unexploited agricultural, mineral and forest resources. There has been some attempt at colonization, over and above the natural migration from Luzon and the Visayan Islands.

According to a memorandum on population problems in the Philippines prepared last year by J. R. Hayden, 7,000 individuals were living, in 1935, in eight agri? cultural colonies established in Mindanao under the Insular Agricultural Colonies Act, at an expense of some

P700,000; approximately 31,300 homesteaders had been

transported to Mindanao with a government expendi- ture of about P600,000; and some 775 provincial col- onists had been established at public expense. Although the government colonies were generally considered a

failure, they have accomplished some things, such as

developing agricultural areas, building roads, and dem-

onstrating that a properly conceived and financed

project might meet with a fair measure of success. For these reasons?and also because Davao, the

stronghold of the Japanese in Mindanao, is looked upon with some concern?Mindanao bids fair to become a

very important project in the national planning. The

Secretary of Agriculture, in outlining the activities of the department for this year, said specifically that "Mindanao and Sulu are to be developed as a problem that has become a challenge." His instructions to de?

partment men in the field include: visiting various settlements and agricultural colonies; calling meetings of settlers and immigrants to explain to them about

cooperative marketing associations; and to start or-

ganizing such associations wherever the situation justi- fies it. The total program includes exploitation of natural resources; construction of first-class highways

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1938 Steps Towards Economic Planning in the Philippines 77

and bridges; survey and settlement of uninhabited

lands; maintenance of experiment stations and seed

farms; control of plant pests; establishment of agri? cultural nurseries; animal promotion work; forest sur-

veys, fish and games plans; mines surveys, and so on. In view of the scope of the plans, the requested special appropriation of P5,000,000 from the coconut oil tax seems inadequate even for preliminary work. For the road projects alone at least P20,000,000 is said to be called for.

While outlines are thus being drawn up for land

development and population movement, concurrently plans are being considered for the in-

Industriali- dustrialization for the Philippines. A zation first requisite is, of course, cheap Demands power, and the government is explor- Cheap Power ing the Islands' coal and oil reserves

and studying the possibilities of devel-

oping sources of water power. The National Develop? ment Co. is now in charge of the abandoned coal mines

formerly operated by the National Coal Company, and is conducting exploratory work throughout the Islands

(see Far Eastern Survey, Sept. 1, 1937, p. 210). Presi? dent Quezon has been in negotiation with the Standard Vacuum Oil Company to develop oil resources in the Islands on a royalty basis, and has asked the National

Assembly to pass an enabling act so that the Common? wealth may enter into such a contract.

Doubt as to the extensiveness of occurrence of either doal or oil has tended to throw the weight of immediate interest upon water power?but lack of data gathered over a sufficiently long period is a handicap to immedi? ate development. On the recommendation of the Presi?

dent, the National Power Corporation was created last

year, to take charge of development of hydro-electric power, the corporation to be financed by a bond issue

guaranteed by the Commonwealth Government. At the end of last year, the report of United States Army expert engineers for the National Power Corporation was submitted to the Secretary of Public Works and Communications. A tentative plan for a complete power survey has been drawn up, to be conducted over a three-year period. An appropriation for P600,000 is to be sought from the National Assembly, in addition to P250,000 already at the corporation's disposal. The National Development Corporation has made an appro? priation of Pl 50,000 for a complete survey of the power possibilities of the Lake Lanao region including a loca- tion survey for a proposed electric line in Mindanao. It had also spent some P49,000 out of a total appropri? ation of F60,000, investigating power possibilities of the Agus-Kanan-Lenatin Rivers, when the National Power Company was formed and took over the work in 1937.

At present there are less than 300 electric plants in

the Philippines, concentrated in the areas of the larger

cities, principally in Manila, and electric power is not

yet available elsewhere for industrial development. On the basis of figures supplied a year ago, the cost of

electricity for lighting is about 30 centavos (15 cents)

per kilowatt-hour in Manila and even more in the

provinces; and about 10 centavos per kilowatt-hour is the charge for large industrial plants?a charge far above that in other countries where water power has been developed.

Among the first industries to attract the attention of the Islands' economists are those supplying food and

clothing. The National Food Products New Canning Corporation, a subsidiary of the Na-

Enterprises tional Development Co., capitalized at

P2,500,000, is embarking on a program of packing and canning food. In January contracts were signed for the construction of a can manufactur?

ing plant, to cost about P230,000, and to be completed before the end of this year. Packing plants are to be established in Luzon, Panay, Samar, and Northern Mindanao.

The present prospects for textile manufacturing are far less promising than other projects heretofore con? sidered. The keen competition between Japanese and American textiles in the Philippine market; the lower

price of the former, which tends to make them more attractive to the Filipino consumer; the fact that a

protective tariff during the Commonwealth period can- not be applied to American imports?all of these fac- tors represent handicaps to a struggling industry in the Islands. Moreover Japanese textile plants are already being set up in the country, against the day when

imports may have to scale a high tariff wall. One

Japanese factory in the Philippines is expanding to a

point where it threatens to displace the handwoven

products of the Ilocano regions with similar materials at far lower prices.

However, the National Development Co. is consider-

ing this problem in its total program, and at the mo- ment is particularly concerned with

Home protection of home-weaving industries, Industries in which hundreds of thousands of

Encouraged Filipinos are engaged either seasonally or full-time. At the end of 1937, the

National Development Company was reported to have ordered from the United States machinery for spinning and weaving, at a cost of P500,000, to be used in the manufacture of cotton yarn for home weaving.

Where competition between foreign and domestically- produced goods is involved, the National Economic Protectionism Association is intended to operate. Or?

ganized three years ago to popularize Philippine-made products and thereby promote a program of industriali-

zation, before the end of 1937 it counted nearly 500 enrolled members. In addition, over one and a half million persons were pledged to carry out its objectives.

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78 Steps Towards Economic Planning in the Philippines April 6

Business firms and individual business leaders make

up the bulk of sustaining and regular members, con-

tributing from P1.00 to Pl ,000.00 yearly. The ultimate aim is nation-wide support, and toward this a system- atic program of propaganda is being carried on through the schools and other suitable channels.

The concentration of the retail trade of the Com? monwealth largely in the hands of Chinese and Japa? nese merchants has been one difficulty against which the NEPA has had to struggle. Bills have been intro? duced in the National Assembly restricting retail trade to Filipinos and Americans. To assist small Filipino merchants, a proposal is now before the Assembly to establish a National Merchandising Corporation, with a capital of P2,000,000. Thus attempts are being made to nationalize both production and distribution of goods within the Commonwealth.

A third prime necessity of life, shelter, presents no serious problem. With the extensive forest reserves at

its disposal?over half of the land area

Promising is comprised of forests?the lumber Future for industry is one upon which the new Lumber nation may count both for internal use

and for export. The Bureau of Forestry is carrying on extensive forestry research, industrial

investigations, wood reclassification, reforestation, planting projects, etc. For other construction purposes, a subsidiary of the National Development Co., the Cebu Portland Cement Co., is now preparing to meet

greater demand. It is increasing the output of its old

plant, new machinery for that purpose having been installed at the end of 1937. Moreover plans are being made to construct another plant in La Union, to cost about P2,000,000. Cash on hand at the Cebu plant at the end of 1937 was more than sufficient to finance the new plant.

Not all of the tasks before the Commonwealth Gov? ernment can be outlined within the scope of this article.

Banking and credit, minimum wage and labor legisla? tion, which have been touched upon in previous issues of the Far Eastern Survey, all have their place in the total picture. Education and health programs, defense ?all have claims upon the energy and finance of the administration.

To finance the plans which are only beginning to take shape, new sources of revenue are being studied.

The government's income derives New mainly from customs duties, internal Revenues revenue taxes, and profits of govern- Sought ment enterprises. At the moment the

Commonwealth is in the fortunate posi? tion of being in sound financial condition, and of having large excise tax refunds in hand, some P45,000,000 from the same source due during 1938, and more assured

yearly until 1941. With regard to normal income, in the past import duties have made up roughly a third

of taxation revenue. (Export duties were abolished by the tariff act of 1913.) After 1941, under the Indepen? dence Law, falling exports are bound to be accompan? ied by falling imports, and consequent lower customs revenues. Moreover, the Philippine Government, be- fore it attains independence, cannot regulate tariffs without the consent of the President of the United States.

Internal revenue taxes therefore seem destined for alteration?income and inheritance taxes, those on

business, banks, insurance companies, the sales tax and the tax on mines, to mention only some of them. It is at this point that difficulty arises in adhering to the

principle of "social justice," which is considered the

keynote of the administration's program. In order to remove the excessive tax burden on the "little fellow," the cedula or personal tax of one or two pesos has

already been removed, and bills now before the Assem?

bly provide for the abolishment of the sales tax on

necessary articles, an increase in the sales tax on articles of luxury, and an increase in income tax rates in the higher brackets. An attempt is being made to

put through a bill increasing the tax on sugar centrals, taxes to be lowered in proportion as centrals share their

profits with planters and hence indirectly with laborers. It has been estimated that per capita taxation in the

Philippines is about four pesos, and that actually Americans and foreigners pay over three fourths of the total taxes. This leaves a burden for the Filipino which does not appear heavy?but in comparison with his income it is often exorbitant.

The tax on mines is a valuable source of income. That industry, especially gold mining, is one of the

mainstays upon which the country may Large Income have to lean in years to come. Taxes from are assessed on a sliding scale, the Mine Tax maximum being 5.5% of a company's

annual output exceeding Pl3,000,000. Only a few mines are in the latter bracket. But in

1935, the mine products tax alone amounted to over Pl ,000,000 and the income tax paid by mining com?

panies in the same year approached P400,000. In addi-

tion, there were property taxes, registration fees, and

many others which the industry paid. In 1937, gold production was valued at over P50,000,000, and the

prospects for 1938 are considered equally good. To the gold boom is credited a large part of the country's prosperity in recent years.

Government enterprises form the third source of

internal revenue. The Philippine National Bank, the Manila Railroad Company, the Manila Hotel and the Cebu Portland Cement Company, report a net profit of P5,100,000 for 1937. They may continue to do so while the government has its current abnormal income to pour into the development of the Islands.

The President's Four-Year Public Works Program,

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1938 Japanese Government Given Blank Check 79

submitted to the National Assembly in February, car- ries such a large appropriation that it is perhaps worthy of special mention here. It calls for a total outlay of

P92,271,000, the largest appropriation for such a pur? pose ever recorded in Philippine history. Of this, nearly P86,000,000 is to come from the excise tax; some

P4,400,000 from general funds; and P2,275,000 from

port-works funds. A total of P50,000,000 is set aside for road construction and improvement, over P13,000,- 000 for Mindanao alone. Other important items in- cluded are: health and sanitation, P9,000,000; improve? ment of Manila, Pl 1,500,000; flood control and seawall

projects, P12,196,000; public buildings, P4,137,000; Philippine Army buildings, P4,151,700.

The expenditure of such a large sum for a country which has hitherto operated on a modest budget, leaves

the door wide open for graft and brib- "Pork- ery to an unusual degree. One provi- Barrel" sion of the Public Works Program has Methods already aroused much criticism, that

of P9,800,000 for local roads, which would allot, as the summary of the measure states, "Pl 00,000 for each Assemblyman." Much opposition has been voiced to these so-called "pork-barrel" meth?

ods, which are only too familiar in other lands. It could hardly be expected, however, that a young coun?

try would learn only good habits from the examples of those in other countries who are more learned in the

processes of administering government. Those who are close to the situation are not dazzled

by the glitter of big money pouring into the treasury now. Many of them see lean years ahead unless safe-

guards are provided in amendments to the Indepen? dence Law. They see an inherent danger in the wide-

spread attention which has been given through the press

and through public pronouncements of key officials, to

the problems of the little farmers and laborers. Even those who are sympathetic to the movement fear that

labor, awakened to its rights, and relying on official

espousal of its cause, may press claims for better wages and living conditions than industry as a whole can

grant immediately. The tremendous undertaking of

bringing enlightenment to a large part of the Islands'

14,000,000 people involves making them politically con-

scious, not only of the privileges they are entitled to

enjoy under their government, but also of their duties and responsibilities to that government.

The major burden, for the time being, falls on the leaders. The spotlight is on them, thrown not only by

their own people but by the rest of the

Major Burden world. The situation presents a chal- on Leaders lenge to them for wise planning, intel-

ligent direction, and honest administra? tion in the effort to work out their own destiny. What? ever its eventual relationship to the United States, the

Philippine Government recognizes that it must put its own house in order, and to that task it is now directing its energies.

PRINCIPAL SOURCES:

U. S. Tariff Commission, United Statcs-Philippine Trade, 1937; G. L. Kirk, Philippine Independence, New York, 1936; G. A. Malcolm, The Commonwealth of the Philip? pines, New York, 1936; Philippine Statistical Revieiv, Manila; American and Philippine Chamber of Commerce Journals, Manila; Philippines Herald, Manila; New York Times; The Philippine Yearbook, 1936-37, Manila. See also Far Eastern Survey: "Philippine Independence and Agri? cultural Readjustment," Apr. 8, 1936; Jan. 6, 1937, p. 9 Feb. 3, 1937, p. 33; Apr. 14, 1937, p. 92; "An Independent Philippines and Japan," Apr. 14, 1937; May 26, 1937, p. 126 July 7, 1937, p. 161; July 21, 1937, p. 175; Sept. 1, 1937; p. 210; Sept. 15, 1937, p. 219; Sept. 29, 1937, p. 233; Nov. 17, 1937, p. 267; Mar. 2, 1938, p. 53; Mar. 23, 1938, p. 71

JAPANESE GOVERNMENT GIVEN BLANK CHECK

Kathleen Barnes

The Japanese Diet has passed the general National Mobilization Bill after a stormy but fruitless fight on

the part of sections of the Lower House. It has thereby given to the executive practically unlimited powers over all phases of national life, which may be used in time of war or of incidents of the nature of war. Mr.

Saito, the leader of the Minseito, in the House of

Representatives aptly phrased criticism of the bill when he said: "It may be convenient for the Govern?

ment, but it is not necessarily convenient for the nation."

The motivations of both the opponents and the

proponents of this measure have been confusing to say the least, if the arguments advanced are to be the

criteria. The bill has been attacked as unconstitutional since it provides for legislation by edict, and also as

unnecessary, it being claimed that everything in it can

be achieved by imperial ordinance even without this

legislation. It also has been stamped unconstitutional because it limits Imperial prerogative. Those advancing the bill have stated that its passage was extremely urgent. The War Minister claimed that "the fate of the nation hangs on this occasion." Yet it was argued that the passage of the bill does not necessarily mean its enforcement; that it was merely necessary in order to give the nation some understanding of the requisite scope of possible emergency measures.

The Prime Minister has in fact assured the Lower House that the enforcement of the bill will not take

place right now, that the China affair will not necessi- tate it; "the bill is a preparation for a war that might break out in the future." Apparently somewhat ap- peased by this assurance and by Prince Konoye's promise that both houses of the Diet will have equal

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