and less any Philippine export duties imposed upon shipments from the islands. The act also exempted from the payment of export duties all Philippine wares entering the United States free of duty and coming directly from the islands.

The trade between the United States and the Philippines was not restricted to American vessels, but American ships arriving at American ports from the Philippines were not required to pay tonnage taxes. An act of April 29, 1908, required foreign vessels entering an American port from the Philippines to pay the same tonnage taxes as were paid by vessels entering from foreign countries.

The first far-reaching modification of tariff duties applicable to the trade between the United States and the Philippine Islands was made in the Payne-Aldrich tariff act of August 5, 1909. It provided that American products (except rice) should be admitted into the islands free of duty, provided that no drawback of customs duty had been allowed, that they had been shipped direct, or in bond through Canada or Mexico, and that a properly executed certificate of origin had been presented. It also provided that Philippine products (except rice) should under the same conditions be admitted into the United States free of duty. It specified, however, that the annual imports of Philippine cigars should be limited to 150,000,000 cigars; wrapper and filler tobacco when mixed with over 15 per cent wrapper tobacco to 300,000 pounds; filler tobacco to 1,000,000 pounds; sugar to 300,000 gross tons; and that not more than 20 per cent of the value of imported Philippine manufactures should consist of foreign materials. At the same time the so-called "Colton Act" revised the Philippine tariff act of March 3, 1905, which governed the collection of duties imposed in the islands. The tariff act of October 3, 1913, further extended the principle of free trade to the commerce between the United States and the Philippine Islands. It removed the limit on the amount of Philippine tobacco and sugar which might be shipped to the United States; it repealed the provision which excepted rice from the free-trade regulations of the Payne-Aldrich act; and it permitted cargoes entitled to free entry to be shipped on a through bill of lading instead of limiting them to direct routes. Though stimulating the trade between the United States and the Philippines, the act of 1913, by abolishing all export duties on articles shipped from the islands, also benefited the trade with foreign nations. The Payne-Aldrich act practically granted a differential to the American importer in that it abolished the export duties on goods entering the United States free of duty and did not prevent the collection of such duties on exports destined to foreign countries. The modified free trade within certain limits which the PayneAldrich act extended to the trade between the United States and the Philippines, together with improvements in agriculture, transportation, currency, and other fields of Philippine industry and finance which had gradually been worked out, resulted in the first rapid advance in the

commerce of the islands after their establishment as an American colony. Shipments to the United States advanced in value from $4,410,000 in 1899 to $11,373,000 in 1903, but then remained static for six years. Shipments from the United States to the islands gradually advanced from $2,636,000 in 1900 to $11,182,000 in 1903, but the increase was largely due to the purchases of commodities intended for consumption by Government troops and public servants stationed in the islands.

Since 1909 the trade between the United States and the Philippines has made rapid progress. Shipments to the United States advanced to $17,318,000 in 1910 and $21,010,000 in 1913, and the imports received from the United States grew to $16,769,000 in 1910 and to $25,361,000 in 1913. In return for cargoes of manila hemp, sugar, cigars, leaf tobacco, and copra, the United States has shipped a multitude of American exports of much the same kind as those shipped to the Hawaiian Islands.

The

The imports into the United States from 1900 to 1909 consisted very largely of hemp, together with declining quantities of sugar. shipments of tobacco and sugar had begun to decrease in relative importance even under Spanish rule, and owing to the devastation by insects and disease, the exports of coffee had practically ceased. Since 1909 the hemp trade has lagged, while the sugar, cigar, leaf-tobacco, and copra trade has gradually increased. In 1910 the prices of all these commodities, except hemp, increased, and the condition of the hemp industry has therefore been unsatisfactory. It should also be noticed that, owing to the change in prices, the increase in the volume of Philippine shipments to the United States was less rapid than the advance in their value.

The relative share of the United States in the Philippine trade gradually advanced, after the islands became an American colony, although it has never become as preponderant as in other outlying possessions. While prior to American occupation the United States had for many years been losing ground, the share of the United States in 1905 comprised over 44 per cent of the entire export trade. From then until 1910 the shipments alike to the United States and foreign countries lagged, but since 1910 the shipments to the United States, as well as those to other nations, have made much progress. In 1913 the Bureau of Insular Affairs reported that 63 per cent of all Philippine exports found markets in foreign countries. The relative position of the United States in the Philippine import trade has steadily improved, since the islands became an American dependency. Before the American occupation of the islands, the imports received from the United States averaged from 2 to 4 per cent of the total; those from Great Britain, from 25 to 38 per cent; from Germany, 3 to 6 per cent; Spain, 8 to 24 per cent; China, 10 to 20 per cent; and those from Hongkong and the British East Indies ranged from 10 to 25 per cent. During

the years 1900 to 1905 the American share averaged about 13 per cent (19 per cent in 1905), while the imports from Great Britain averaged about 17 per cent, Spain, 7 per cent, China, 13 per cent, Hongkong, 5 per cent, and the British East Indies 8 per cent, the latter gradually rising to 15 per cent, when a shortage in the Philippine rice crop occurred. In 1913 the imports from foreign countries comprised about 55 per cent of the total import trade of the islands, the share of the United States having risen to nearly 45 per cent. It was not expected that the trade of the Philippine Islands would be so completely dominated by the United States as that of Alaska, Hawaii, and Porto Rico, because the large Oriental population guaranteed a market for substantial quantities of Oriental wares, and the geographical proximity of the islands to Asia and Australia made them a natural market for Australian provisions and breadstuffs and South Asiatic rice.

The commercial value of the Philippines has been almost entirely as a source of direct trade. The building of adequate docks, depots, and warehouses, and the general improvement of harbor facilities has not restored Manila to its former position as a port of redistribution. Many forces have been adverse to a revival of the redistribution trade. Long before American occupation of the Philippines, the course of Oriental trade had changed so radically that such Oriental ports as Hongkong acted as centers of redistribution to Manila, a condition just the reverse of that which had prevailed during the early years of Philippine trade. The distance from the United States to Asiatic markets, moreover, would be greatly increased, if the Manila route were adopted, for "Manila is from two to five days' travel from the great commercial centers of Eastern Asia, over seas proverbially rough and subject to typhoons." Manila as a port of redistribution must compete with numerous Asiatic ports more favorably situated and already well-established in Oriental trade. In Southern Asia are Singapore, Calcutta, and Bagdad; opposite southern China is Hongkong; on the central Chinese seaboard are Shanghai and other Chinese ports; and in northern Asia are the great ports of Japan. The tendency in recent years has been to conduct trade as directly as feasible with the points of consumption instead of through distant commercial depots. To redistribute American wares to the Orient from Manila would be a reversal of the policy which American as well as European merchants have long striven to follow.

COMMERCIAL VALUE OF NON-CONTIGUOUS POSSESSIONS SUMMARIZED.

In times of hostility the non-contiguous possessions of the United States may possibly serve as bases for the protection of the foreign commerce of the United States with the Orient, Central Asia, and South America; and some of them-San Juan, Manila, and Hono

1U. S. Department of Commerce and Labor, The Commercial Philippines in 1906.

lulu—may under such conditions also act as points of redistribution. Their chief commercial value, however, though more clearly demonstrated by the past development of some than of others, has on the whole been three-fold:

Taken together, the outlying possessions have become one of the leading sources from which the people of the United States have obtained necessary imports. This has, of course, been of mutual advantage, for the resources of the possession, in order that they might be developed, required large outside markets. The tropical and subtropical products of Hawaii, Porto Rico, and the Philippines-sugar, coffee, fruits, tobacco, hemp, and copra-are commodities for which the United States has provided a large and growing market. Other products are also available, although they have not yet entered the channels of trade on a large scale, such as spices and cabinet-woods. The gold, salmon, and furs of Alaska are, likewise, articles which have found an extensive American market, and there are other Alaskan resources-copper, coal, timber, and fish other than salmon-which have barely been touched. Table 62 shows how the value of domestic wares, excluding Alaskan gold, shipped from the outlying possessions of the United States has rapidly risen from about $35,421,0001 in 1899, when most of them were acquired, to $128,207,000 in 1913. Though some of this advance was due to a rise in prices, yet it records a rate of increase more rapid than that of the total import trade of the United States with foreign nations. Indeed, an increase of over 260 per cent during the period 1899 to 1913 was equaled or exceeded by the imports received from but few important foreign countries.

The non-contiguous possessions have become an important market for American exports. Being dependent upon their natural resources as their only commercial asset, they have imported outside manufactures and such foodstuffs as they do not themselves produce in sufficient quantities. Those imported from the United States, as is shown in table 62, have grown from $21,692,000 in 1899 to $108,303,000 in 1913, an advance of over 400 per cent. Everywhere, except in the Philippines, the import trade of American dependencies has been almost completely under the control of American exporters. As in the case of the exports shipped from the possessions, this has been to the mutual advantage of both parties, the American exporters finding markets for many of the American wares which have so eagerly sought foreign markets in recent years, and the colonial importers obtaining a supply of needed outside products.

Though the commercial value of the dependencies has been chiefly in their direct trade with the United States, they have in various ways tended to promote the foreign trade and shipping of the United States. Some of them have served as ports of call for vessels engaged in the trade with foreign countries. Honolulu is the port of call

'Alaskan shipments estimated at $10,000,000 in 1899.

of one of the big ocean lines operating between San Francisco and the Orient; the routes from the Pacific coast to Australia and New Zealand are by way of Honolulu and Tutuila; and Porto Rican ports are points of call in the South American trade. Their value in this regard is limited by the fact that they are not located on the shortest steamship routes to some of the leading foreign markets. Honolulu is not on the Great Circle route to the Orient, nor is it on either the shortest direct route or the shortest route via San Francisco from the Panama Canal to the Orient. Porto Rico is not on the direct route between the United States and the Panama Canal, and the geographical position of Manila has prevented its use as a port of call in the trade between the United States and continental Asia. The location of Honolulu, San Juan, and Manila has likewise limited their value as centers from which American wares might be distributed to surrounding foreign markets. TABLE 62.-Shipments of merchandise between the United States and non-contiguous territories, 1889 to 1913.1

'Compiled from Reports of U. S. Department of Commerce. Statistics differ slightly from those contained in reports of War Department and Navy Department.