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American-Philippine Company
This document is not published. It is printed for the
personal and confidential use of members of the
American — Philippine Company. All
rights are reserved. All documents
are numbered and registered
for identification.
-
AMERICAN-PHILIPPINE COMPANY
30 Church Street New York City










American-Philippine Company
PROSPECTUS, PAGE 3
REPORT No. 1, & 6 5
REPORT No. 2, ‘‘ 25
'''' AMERICAN-PHILIPPINE COMPANY
. OF DELAWARE
CAPITAL STOCK
$2,500,000 7% Cumulative Preferred
$2,500,000 {..., x º wº Common
PRESIDENT .
EDWARD H. FALLOWS, NEW YORK
WICE-PRESIDENT .
DAVID FOX, NEW YORK
FIRST WICE-PRESIDENT IN PHILIPPINES :
EDWARD E. GARRETT, LOS ANGELES, CAL.
SECOND WICE-PRESIDENT IN PHILIPPINES :
FRED C. KINGSBURY, LOS ANGELES, CAL.
CHAIRMAN OF EXECUTIVE COMMITTEE:
N. C. KINGSBURY, NEW YORK
EXECUTIVE COMMITTEE :
N. C. KINGSBURY Edward H. FALLows
SAMUEL Owen EDMONDs DAVID Fox
WILLIs B. RICHARDs
GENERAL COUNSEL :
MESSRs. WHITE & CASE, NEw York
CHARLEs S. FALLows, Esq., NEw York
DIRECTORS:
1. GEORGE C. AMEs, NEw York 8. SCOTT R. HAYES, NEw York
2. DELMER W. CALL, NEW YORK 9. F. C. KINGSBURY -
3. H. W. DAVIs, WILMINGTON, DELAwarE 10. N. C. KINGSBURY
4. SAMUEL Owen EDMONDs, NEw York 11. HENRY C. KNOx, New York
5. Edward H. FALLOws 12. RUDOLPH ORTMANN, CHICAGO, ILL.
6. DAVID Fox 13. WILLIs B. RICHARDs, NEW YORK
7. Edward E. GARRETT 14. THOMAS S. SPIVEY, CINCINNAT1, OHIO
15. ALExANDER TURNER, New York
TRANSFER AGENT :
BANKERs TRUST COMPANY, NEw York
PROSPECTUS
AMERICAN-PHILIPPINE COMPANY
The American-Philippine Company is an association of American business
and professional men, organized for profit under the laws of the State of Dela-
ware, for the purpose of investigating and developing the natural resources
of the Philippine Islands and of securing for Americans their rightful share
of the trade of the Philippine Islands and of the Orient.
In establishing the association on a commercial basis, its founders are
not actuated merely by the motive of creating wealth for its members. They
are also responding to the urgent appeal of the American representatives in
the Philippines who reportunanimously that what the eight millions of Filipinos
with their unrivalled natural resources for the production of every tropical
article imported to this country need, and all they need,—is the wise and
profitable investment there of money by American business men.
Members are elected to the American-Philippine Company by the unani-
mous vote of its Executive Committee. Each member elected subscribes
to one hundred shares of preferred stock at $100.00 per share, which he pays
for in installments of $500.00 a year. Upon each annual payment he receives
five shares of preferred stock. He may discontinue his subscription at the
end of any year. He obligates himself therefore for only $500.00. If, how-
ever, he continues his annual subscription until he has paid for and received
fifty shares of preferred stock, he then receives a bonus of twenty-five shares
of common stock; and if he similarly continues until the one hundred shares
of preferred stock have been bought, he receives seventy-five more shares of
the common stock, thus holding one hundred shares each of preferred and
common stock.
The American-Philippine Company is capitalized at $2,500,000.00
preferred and $2,500,000.00 common stock. Every share of preferred stock
ultimately carries its share of common stock. There is no blind pool of com-
mon stock to be distributed to promoters or organizers. Every member of
the American-Philippine Company is upon the exact and equal footing of every
other member. The preferred stock is 7% cumulative and is preferred both
as to dividends and upon distribution of assets.
Both preferred and common stock is deposited for five years, with a re-
newal option for five years more, with Voting Trustees, who issue Voting
Trust Certificates therefor. Before a member may dispose of a Voting Trust
Certificate he must first offer it for sale at the book value as shown by the last
preceding annual audit of the Company, or at the option of the holder, at a
price agreed upon or fixed by arbitration, to the Voting Trustees, who, as
agents for the American-Philippine Company, may buy it at such price.
3
The American-Philippine Company was organized on October 16th, 1912.
It began with a pledged membership of over one hundred and fifty business
and professional men.
The American-Philippine Company, through its Philippine Vice-Presi-
dents, Messrs. Garrett and F. C. Kingsbury, has already acquired a four-
sevenths interest in the preferred stock of the Zamboanga Plantation Com-
pany, which has a rubber and copra plantation of thirty-two hundred acres
in the southern island of Mindanao, seven degrees north of the equator. The
properties of the Zamboanga Plantation Company are described in the accom-
panying “Report No. 2,” prepared prior to the organization of the
American-Philippine Company.
The President of the American-Philippine Company, Mr. Fallows, accom-
panied by its Vice-President, Mr. Fox, will join Messrs. Garrett and F. C.
Kingsbury in Manila in February, 1913, and with a force of experts and engi-
neers will proceed to examine and prospect the opportunities for development
and investment.
They will return in the spring of 1913 and place their reports before the
Executive Committee and Directors of the American-Philippine Company,
who will then make such further investigations and obtain such further expert
information as they may deem necessary. Full and frequent confidential
reports will be made to the members of the American-Philippine Company.
When a particular proposition has been finally approved, it will be separately
organized and capitalized and eighty per cent. of the underwriting will be
offered pro rata to the individual members of the American-Philippine Com-
pany, the remaining twenty per cent. being reserved for the American-Philip-
pine Company itself to take. The cost of prospecting, developing and organ-
izing the particular proposition will be repaid to the American-Philippine
Company, so that its capital may be kept intact for further prospecting and
development. Two objects are accomplished by this method of operation.
The American-Philippine Company, while making an ample profit, will not
become top-heavy either in capitalization or organization, and it will not vio-
late either the letter or spirit of the Sherman Anti-Trust Law by centralizing
many diversified industries under one control.
It is the purpose of the founders of the American-Philippine Company
to make it a model in every respect and one that will be a constant object lesson
to the Philippines and the Orient of that for which the best type of American
business man stands. º
In the “Report No. 1” of the American-Philippine Company, accom-
panying this prospectus, is contained an account of the organization dinner
given at the University Club, New York City, on October 14th, 1912, at
which, beside the organizers, the invited guests and speakers were: Hon. M. L.
Stewart, Director for Commerce, Philippine Islands; Mr. John M. Switzer,
Vice-President, The Pacific Commercial Company; and General George S.
Anderson, U. S. A., just retired after many years' service in the Philippines.
4
Report No. 1
ORGANIZATION DINNER
OF THE
AMERICAN-PHILIPPINE COMPANY
AT THE
University Club, New York City
ON
Monday Evening, October 14, 1912
The guests of honor were:
HON. M. L. STEWART
Director for Commerce, Philippine Islands
MR. JOHN M. SWITZER
Vice-President, The Pacific Commercial Company
GEN. GEORGE S. ANDERSON, U. S. A.
Retiring Commander of a Department of the Philippine Islands
The other invited guests, including the organizers, officers and directors, were:
FREDERIC W. ALLEN
GEORGE C. AMES
DELMER W. CALL
GEORGE B. CASE, ESQ.
OTIS H. CUTLER
WILLIAM F. CUTLER
S. O. EDMONDs, Esq.
CHARLEs S. FALLOWS, ESQ.
Edward H. FALLows, Esq.
DAVID FOX -
ZOHETH S. FREEMAN
EDWARD E. GARRETT, Esq.
WILLIAM B. Given, JR.
FRANK T. HEDLEY
GEORGE M. JUDD, Esq.
FRED C. KINGSBURY
N. C. KINGSBURY
WILLIAM R. KITTREDGE
HENRY C. KNOx
GEORGE LEASK
GATES W. McGARRAH
JAMES B. MABON
RUDOLPH ORTMANN
WILLIAM G. PEARCE
SEWARD PROSSER
WILLIS B. RICHARDS
FRANK O. ROE
REv. DR. DANIEL RUSSELL
THOMAS S. SPIVEY
FREDERICK A. STEvenson
F. T. SWIFT
J. DUPRATT WHITE, Esq.
After dinner, Edward H. Fallows spoke as follows:—
Gentlemen:-We have gathered together to celebrate the birth of the
American-Philippine Company. This Company is now organized and its
Certificate of Incorporation will be filed tomorrow in Delaware.
The objects of this Company are set out in its Prospectus, a copy of which
you each will shortly receive. The plan of organization is one to which I
have given much attention the past year and which has the unqualified
approval of the many business and professional men to whom it has been
submitted. It embodies the club and coöperative principles, in which each
member holds the same amount of stock and has the same rights and privi-
leges as every other member. The members are invited to join and are selected
by reason of past achievement in some business or professional career that may
qualify them in some manner to be of benefit to the Company in its work in
the Philippine Islands and the Orient. The aim has not been to raise a
large amount of capital. That easily could have been done among a small
group of capitalists in New York. But the purpose is to associate together
a large body of representative business and professional men throughout the
country, who, by a great common interest as well as by their combined capital,
will not alone help to develop the marvelous natural resources of the Philippine
Islands and secure for Americans their fair share of the increasingly vast trade
with the Orient, but at the same time will provide the Filipinos with that
greatest incentive for advancement in the arts of civilization,-regular pro-
ductive and remunerative work.
The annual subscription of each member has been placed at Five
Hundred Dollars ($500). And five shares (5) of the seven per cent. (7%)
cumulative preferred stock are issued to the member upon each such Five
Hundred Dollars ($500) payment. A member is under no obligation to pay
more than the first Five Hundred Dollars ($500). If by annual installments
or dividends he pays for fifty (50) shares, he then receives a bonus of twenty-
five (25) shares of common stock and if he similarly pays for one hundred
(100) shares of preferred stock, which is the maximum permitted, he receives
Seventy-five (75) shares more of common stock; thus he would hold one
hundred shares each of preferred and common stock. The issue of common
stock equals the issue of preferred stock and no more. There is no blind pool
of common stock to be distributed among promoters or organizers. Each
member is on the same footing with every other member.
The Company is exceedingly fortunate in having for the Chairman of
its Executive Committee, Mr. N. C. Kingsbury, and for its two Vice-Presidents
in the Philippines, his brother, Mr.F.C. Kingsbury and their boyhood friend, Mr.
Edward E. Garrett. Messrs. F. C. Kingsbury and Garrett have been associated
together for many years in agricultural and mining enterprises in the far West.
They bring to this Company a varied and successful experience together with
integrity of character that will be invaluable to us. They will move perma-
nently to the Philippine Islands in January. Our general Vice-President is
Mr. David Fox, who resigns as Vice-President of the T. A. Gillespie Company
6
to come to us. For over twenty years he has had charge of engineering and
construction enterprises, including railroad and water works building, the
construction and management of hydro-electric plants and public service
corporations, and also has a practical knowledge of the timber and lumber
industry and of mining.
Time forbids me to speak at length of our other officers and directors.
Each man, however, has been selected because of his peculiar fitness for the
special research and development work that this Company will be called upon
to do in the Orient. -
As described in the Prospectus, the Company already has taken a four-
sevenths (4-7) interest in the rubber and copra plantation which Mr. Garrett
secured the past year near Zamboanga in the island of Mindanao. The next
development to be undertaken will be selected only after a thorough investi-
gation by Mr. Fox and myself who will go to the Philippines in February.
Our reports will be submitted to the Executive Committee and Directors
for final approval. This Company may subscribe to not over twenty per cent.
(20%) of any future particular proposition which will be separately organized
and managed and the other eighty per cent. (80%) of which will be offered
pro rata to the individual members of the American-Philippine Company to
underwrite. A member is at perfect liberty to decline to take his allotment,
which may then be taken by the Company or pro rata by the officers and
directors, or placed elsewhere.
We do not want any of the stock of the American-Philippine Company,
at least until it is on a solid dividend-paying basis, to be sold to outsiders,
and therefore if any member finds it necessary to sell his stock, he must first
offer it for sale at its book value as shown by the last preceding annual audit
of the Company, or, at the option of the holder, at a price agreed upon or fixed
by arbitration, to the Voting Trustees, who, as agents for the Company, may
buy it in. The Company seeks no publicity nor advertising. It desires to be
known only by the development it accomplishes and the trade it builds up
in the Philippines and the Orient.
Our organization and membership include not only our most successful
American bankers and business men but all classes of professional and engineer-
ing men, so that whatever the problem may be, we have in our own association
those to whom the questions may be referred for investigation and solution.
We can, without any outside assistance of any kind, develop, organize and
conduct every art, science and industry required for the building of a city
or a nation.
It was my privilege only last night to discuss the organization of this
Company with a man who is generally regarded as the finest type of modern
captain of industry, a man who through hard work with great ability and
perseverance has made one of the largest successes of any man I know. And
after we had looked at the proposed organization from every point of view,
he said, “I think we have one of the best propositions I have ever seen, and
in the large sense I don’t see how it can fail. I want to go in not only for
7
myself but for my son. The object of the Company appeals to everything
there is in a man—not alone his business instinct, but his patriotism and
altruism as well.”
At this point I want to read to you an extract from a recent article by
Hon. W. Cameron Forbes, Governor-General of the Philippine Islands. In
the last Yearly Review number of The Cablenews-American, the leading daily
of the Philippines, Governor Forbes wrote as follows:—
“But what a wonderful opportunity lies here for a man with real ability,
abundant capital and thorough training; who is ready to meet and master
whatever difficulties and obstacles may arise! The breath is fairly taken away
with the magnitude of the possibilities. Let any man take the consumption
of coal and the price it commands in the Philippine Islands for example and
figure the proper development of a really well run and equally well operated
coal mine that would dominate this trade and perhaps attract shipping just
for the purpose of loading coal. Only a few cents a ton profit would give him
untold riches and inure vastly to the benefit of the Islands by reason of the
reduction in the cost of one of their staple commodities. Calculate the silk
consumed in the United States, the value of the embroidered silk imported
from Japan and the rate of duty that is paid, and then look at these hundreds
of thousands of Filipinos, deft of hand, ingenious, adaptable, only needing
to be shown how in order to make this one of the great silk-producing countries
of the world. Look at the figures of the consumption of rubber in the United
States and the success attendant upon rubber planting in the East Indies;
look at the figures of coffee, tea, cacao, sugar, tobacco, hemp, cultivated pearls,
et cetera, et cetera, and it is easy to see where the Philippine Islands could do
a trade twenty times their present trade in tons and value and still not exhaust
the possibilities of their potential labor and uncultivated acres.”
Within a few days after our decision to organize the American-Philippine
Company, Messrs. Garrett and F. C. Kingsbury introduced us to Hon. M. L.
Stewart, who established in the Philippine Islands the now world-famous penal
System, and who, under appointment by the Philippine Government as Director
of Commerce, has been sent to America jointly by the Philippine Government
and the Boards of Trade and Commerce of Manila to open our eyes to the
wonderful business opportunities there.
He is one of our guests of honor tonight and I will call upon him to tell
you what he thinks personally, and as the official representative of the Philip-
pines, of our plan of organization for the American-Philippine Company.
SPEECH OF HON. M. L. STEWAR.T.
MR. STEwART: I feel a little bit diffident to get up here before this body
after hearing this exposition of a business principle which I believe would win
out in any place where the natural resources and wealth do not begin to com-
pare with the Philippine Islands. I was sent over here, as Mr. Fallows has
said, by the Government and the allied Chambers of Commerce to try and
correct a little of the misunderstanding prevalent in this country about the
8
Philippine Islands. When I got here I found there was no misunderstanding;
simply people did not know anything about the Philippine Islands, and a great
many of them do not seem to care. And I want to say that it appeals to me
in a wonderful manner to find a group of men in the busy city of New York,
business men, who are willing to take up a little bit of the work that is being
carried on in the Philippine Islands. -
A great many of us do not even know what the Philippine Islands are.
I have had them described all the way from the City of Manila to a little island
over there; and I want to tell you just what the Philippine Islands consist of.
They are a group of islands about three thousand in number, if you want to
take it in that way, but only fourteen of these islands constitute what we know
as the Philippine Islands; and they cover a territory as large as all of the New
England States, New York, New Jersey, Maryland and Delaware combined,
Say about one hundred and thirty thousand square miles. They have eight
millions of people there which constitute the greatest body of potential labor
I think there is in the world unused.
Perhaps you will bear with me a moment as to the conditions that con-
fronted the American people when they took the Philippine Islands, or rather,
when the Philippine Islands were thrust upon them through the war with
Spain. We found there a country that had been devastated by war and by
revolution. There were no roads worthy of the name and producers could not
get to a market except for a few months each year. They had ninety miles
of track that only by courtesy could be called a railroad. There were no
wharves, no docks, no sanitary regulations, no sewers, a very limited water
supply; commerce was entirely destroyed; there was no school system. The
revolution and the war had destroyed commerce, had destroyed old conditions
and provided no new ones. There were no means of communication. Water
transportation was, to express it mildly, rotten. Boats were inadequate
and dangerous in service, and there were a whole lot of just such conditions
as this that confronted this little band of Americans to whom was entrusted
the duty of bringing order out of chaos and building up a people and a country.
If I had the time I would like to tell you something about the other conditions
that existed at that time, but you can imagine with what I have told you what
we were up against.
Now, just take a glance at the conditions as they exist there today,
and you will get some idea of what has been accomplished by the American
people in the Philippine Islands. We have today peace in every portion of
the Philippine Islands. The people as a rule are satisfied with conditions there.
We have our exceptions, the same as you have them here, a band of politicos
that want everything and claim that they are entitled to it. There are now
two thousand miles of first-class road throughout the Islands, opening up
communication all over; these are surface roads. The ninety miles of inade-
quate track which we had have grown into six hundred and thirty miles of
first-class railroad equipped with modern rolling stock. Modern wharves
and docks have been established, alongside of which the largest ships in the
9
world can go and lie in safety and be unloaded quickly and economically by
the most modern labor-saving and freight-handling devices. We have a
monetary system established. We have a stable currency on a gold standard
where in the old days we had the Mexican coin that was up one day and down
the next. We have a school system that is equal to any system in the world.
Today there is a school house in practically every district in the Philippine
Islands, and over four thousand public schools have been established. In the
last year six hundred and thirty thousand Philippine children were being
taught in English by seven hundred and fifty American teachers and eight
thousand Philippine teachers who had been taught to be school teachers
by the American people. We have trade, industrial and normal Schools in
every provincial centre in the Philippine Islands, and in Manila we have a
university where they can get the higher education, in which today are enrolled
over fourteen hundred students. Now, this is a part only of what we have
accomplished. We have a telephone system throughout the Islands; we have
fifty-four hundred miles of telephone and cable system in operation, and eight
wireless stations, enabling the people to communicate freely throughout the
country. This is a part of what has been accomplished by the American
people there in twelve years, a record of achievement, gentlemen, which I
think challenges the admiration of the world, if they knew about it, and some
things that every American citizen can feel proud of, for I want to tell you that
it is no small task and no small achievement to effect the practical regeneration
in twelve years of over eight millions of an alien race to whose language and
customs we were entire strangers. Now, that is a part of what has been ac-
complished by the American people there, and I will venture to say that not
one out of a hundred of the people of the United States knows anything about
it. Further than this, I want to assure you, gentlemen, that this has all
been done without the cost of one cent to the United States Government,
for, contrary to the universal opinion that prevails here throughout the
United States, the Philippine Islands are not a source of expense to the Uni-
ted States. We are entirely self-supporting and do all our work through our
own revenues. And further than that, we are in advance of any state in the
Union, we take care of our postal service, we take care of our lighthouse
and coast and geodetic service, and things of that kind. We have twelve
millions of dollars on deposit in the City of New York today and fourteen
millions on deposit in the Philippine Islands, and we hate it to be said that we
are an object of charity for the United States.
Now, that is so much for the altruistic end of it; but you can see the oppor-
tunity; you can see what can be done for the people there.
Let us get down to the commercial side of it, and what a great big field
for industry there is in the Philippine Islands! The cocoanut is one of our
great articles. Copra is the meat of the cocoanut. Until 1905 this article
was of such small account in the Philippine Islands that it was mentioned
in our Custom House report in the miscellaneous column. In 1905 we exported
six hundred and seventy thousand dollars' worth of copra, seven years ago.
10
Last year we exported sixteen and a half million dollars' worth, and that is
how one industry can grow. Hemp is a thing which might appeal to Some of
you gentlemen. It is a natural monopoly of the Philippine Islands; it cannot
be grown in any other place; we are the only country that produces hemp
commercially. Our exports last year were sixteen million two hundred dol-
lars’ worth of that. Then we have sugar, an industry which has only been
scratched. Last year we exported ten and a half million dollars’ worth of
sugar; and I want to tell you that there was not a modern Sugar mill in the
Philippine Islands until this last year. They used wooden presses and got
about forty-five per cent. of the juice, while the modern mills get ninety-five
per cent. Now you can imagine what a modern sugar concern could do in the
sugar line; and we have six hundred thousand acres of the finest Sugar land
that lies outdoors waiting for development. We have any amount of acreage
for cocoanuts. I would say at a rough calculation that there are five million
acres that can be used in cocoanut culture. Rubber has just been developed.
The first successful rubber plantation had an exhibit at the rubber show here
the first of this month, and I am glad to say that the rubber produced from
there, all of the experts said was the best rubber on exhibition. It was en-
tered too late to go into the competition for the best rubber, but I want to
tell you that out of the ten prizes awarded and two hundred and seventy-seven
exhibits competing from every rubber company in the world, every one was
awarded to the Federated Malay States, which is practically the same kind
of country as the Philippines, showing that our rubber is superior to any other
in the world. Now, taking the proposition of rubber, there is one phase of
this that I would like to impress upon you. You are all business men. The
day is coming, and it is not far off, when England and Germany are going
to put a big export rubber tax on their colonies to protect the rubber manu-
facturing of England and Germany. What are the rubber men of the United
States going to do? Your only solution is producing the rubber under your
own flag. Another great evil to me is the fact that this country last year
purchased six hundred million dollars’ worth of tropical products from foreign
countries, and in return sold them two hundred and thirty million dollars’
worth of stuff. In other words, you give them three hundred and seventy
million dollars to go to Germany, England, Belgium and Italy and buy goods.
Is that right, when you can raise every bit of it in the Philippine Islands?
There is not one of those articles that cannot be grown profusely in the Phil-
ippine Islands, and I will promise you that you will get back dollar for dollar
all the trade you do with us, and you won’t have a balance of three hundred
and seventy millions of dollars against you.
There are other things, take coffee, silk, take chocolate and the citrus
fruits, any amount of those things are there awaiting more business and more
capital. Let me here give the principal exports of the Philippine Islands for
the past two fiscal years ending June 30th, 1911, and June 30th, 1912:
11
Article 1911 1912
Hemp.................. º $16,141,340 $16,281,830
Copra.… 9,899,457 16,514,749
Sugar.… 8,014,360 10,400,575
Tobacco, Cigars and Cigarettes............... 3,605,567 4,595,168
Hats.…. 307,987 504,509
Miscellaneous....................................................... 1,809,918 2,023,005
TOTALS........................................................ $39,778,629 $50,319,836
And then we come to our timber. You all recognize the fact that this
country has no hard woods. There are standing in the Philippine Islands
today two hundred billion feet of the finest hard wood that grows on this
earth, fit for anything from a palace to an emperor's tomb, and we furnished
the tomb for the Emperor of China from our wood. Ninety-five per cent.
of this still belongs to the Government, and the Government will give conces-
sions amounting to two, three or four hundred square miles of this fine timber
situated on the coast and on navigable rivers, easy to get at, to anybody who
will develop it, free of cost. Now, do you want any better opportunity than
that? The only charge is the stumpage tax, which is one-half of what it is
in the United States. That is waiting there, the finest wood on the earth.
This country has nothing of the kind and it imports all of its hard woods,
as you know, from Mexico and South America. Why not build up our own
tropical empire? We have got it, and we have got the labor to help do it.
So much for that.
I want to tell you something else that I know will astonish you. Draw-
ing a circle two thousand miles around the City of Manila, with Manila in the
centre, a radius of two thousand miles—within that circle lives one-half of
the entire population of the world. Think of that for a market; only as far as
from here to Denver, seven hundred and fifty millions of people waiting to
be fed and clothed and furnished with manufactured articles. Those people
do a trade today of one billion dollars, of which the United States gets one per
cent. China last year purchased three hundred and twenty-five million
dollars' worth of articles, manufactured articles, and the United States sold
seventeen millions of them. We don’t get any trade from India. And yet
from the Philippine Islands we are only two days from China, three and a half
days from Japan, five days from India, ten days from Australia. Think of it
as a centre to operate from.
Another thing we need is a direct steamer service, which is what we are
praying for, and which I think to men who have capital to invest is one of
the best investments in the world today. It takes now to go from San Fran-
cisco to the Philippine Islands in the ordinary route about twenty-eight days.
We can get a service there in fourteen days, and we are the only country in the
world that can reach the Orient, except Japan, inside of thirty days. Does
it open any prospects? Now, this is just a faint idea of what the possibilities
are. I believe it is the greatest country of promise in the world today. It is
12
worth looking at, gentlemen, and we ask you to come over and look into it.
It is a nice trip to make anyway. You people spend your spare time run-
ning to Europe, over the storm-tossed waves of the Altantic. A trip on the
Pacific is almost as calm as this table. Pacific means calm. You stop at
the Hawaiian Islands, you stop in China, you see the curiosities and curios of
Japan and the historical antiquities of China. A trip to the Philippines is
one of the greatest trips in the world from a scenic or a historical standpoint.
And then what is at the other end? You will find your own kind of people,
Americans that have gone out in the van and have stood a whole lot of the brunt,
to receive not much but condemnation from the people of the United States,
waiting for you with open arms. Opportunities that cannot be equalled in
the world are there, many of them that I have not begun to tell of, and I
would hate to tell you, because you would think I was exaggerating. I can
assure you, gentlemen, not only from the Government but from every individ-
ual over there in business or any other way, the warmest kind of a welcome.
MR. FALLows: What will be the attitude of the Philippine Government
towards such a company as we have now organized?
MR. STEwART: I cannot begin to express it. They will show you every-
thing there is there. If, for instance, you want to look at land, they will
furnish you with surveyors from the Bureau of Lands. If you want timber,
the Forestry Bureau will furnish you with men to cruise it and without ex-
pense to you. The proposition is to build up the Philippine Islands and to
give to the Philippine people purchasing power.
MR. FALLows: This is not a bed of roses, and we have got obstacles
to meet there. What is your own feeling, Mr. Stewart, with reference to what
investments might be worth in the Philippine Islands, supposing this country
should give them their freedom?
MR. STEwART: I do not believe there is any reason to be apprehensive.
For the last sixty years England and Germany and Italy and Switzerland
have had business men in the Philippine Islands doing business without any
trouble at all, and I do not believe that if there was any important industry
established there, if independence should come, that it would not be protected.
MR. FALLows: Would not the answer come in a measure just through
such an organization as this, where a large number of people of power and
prominence, having a personal interest in the Philippines, would prevent
the Government from doing something which might be prejudicial to their
interests in that country?
MR. STEwART: It would do this, and it would give them a knowledge of
conditions which they do not have. We have a standing proposition to pay the
expenses of a committee of twenty-five Congressmen to come over there and
investigate for themselves the conditions before voting on this subject, and
they have never come.
MR. FALLows: Last Saturday morning Mr. Stewart introduced me to
Mr. John M. Switzer of Indiana, Vice-President of one of the largest trading
companies in the Philippines and the Orient, The Pacific Commercial Company.
13
I was so profoundly impressed by all that Mr. Switzer told me of the Phil-
ippines and the East that I asked him if he would not remain over long enough
in New York on his way back from Europe to the Philippines to enable our
organizers to meet him at dinner and he is here tonight to speak to us.
SPEECH OF MP. JOHN M. SWITZER
MR. SwitzER: Mr. Fallows and gentlemen, I am not a public speaker, as
you will all learn before I have gone very far. In fact, I did not know I was
to be called on for any remarks here this evening. I presumed that there would
be probably four or five gentlemen sitting around the table and we would talk
across the table, so I am not prepared with any speech; in fact, I have never in
my life made a speech with reference to the Philippine Islands, so that whatever
I have to say in a rambling way comes straight from the heart, and it may be
disconnected—it will be-but I hope you will take it for what it is worth.
I could not help but think when we were sitting down to this table this
evening that in all probability, gentlemen, this will be a very historic meet-
ing. You won’t realize that for some years to come. Cecil Rhodes made an
empire out of South Africa. It is up to some of you fellows to make an em-
pire out of the Philippines. It is there, just the same as South Africa was
there. South Africa was a developed country when Cecil Rhodes went there,
alongside of what the Philippine Islands were as we found them and as they
are today. Cecil Rhodes made, as I say, an empire out of South Africa for
Great Britain. Up to the present time there is a little band of us over there in
the Islands. Most of us went there with a capital something below zero; most
of us went there with comparatively nothing. General Anderson knows that.
GENERAL ANDERSON: Personally, yes.
MR. FALLows: When did you go there, Mr. Switzer?
MR. SwitzER: I might say that I went there in the first expedition that
went to the country. I was with the first expedition that went over to join
Dewey in 1898. It was my fortune to be among the first two hundred men
to embark to go to foreign shores in the history of America.
I say this is likely to be a historic meeting because you have the making
here of an organization which can do more to develop the Philippine Islands,
to really make it an empire and to hold it for the United States than any
movement that has ever been started since the Philippine Islands were thrust
upon the United States. I say thrust upon us, because we did not go over
there with any idea of aggrandizement. You all know that; I do not need
to state it. If anyone is inclined to tell you that we wanted the Philippine
Islands for commercial purposes, let me tell you of an incident. When the
St. Louis Exposition was on, the Philippine Government decided to send over
here at the expense of the Government fifty Filipinos, the most advanced of
their race. They came with an agent of the Philippine Government, Mr.
Ferguson. The story was told to me by one of those Filipinos. He said that
they were going through Wyoming or Colorado or Nebraska, I forget which,
and Mr. Ferguson called them all up around him in the car, and said, “Gen-
14
tlemen, I want you to notice when we pass a house. You count the number
of rails we cross, and let us figure out how far it is to the next house.”
They did not know what was up at all, and they did it. It was forty
miles to the next house. After they had all figured it out and stood
wondering what in the world it was all about, Mr. Ferguson said to them,
“Gentlemen, do you think that we came over to the Philippine Islands because
we needed land?”
The world today, it looks to me, gentlemen, is many times Smaller than
it was fifty or one hundred years ago. Transportation facilities day by day
are making the world Smaller and Smaller.
Now, imagine a situation, if you will, where Europe allowed the American
Continent to remain in the hands of the American Indian. Where would this
continent be today? This continent, gentlemen, would be exactly where the
Philippine Islands are today. Will anyone tell me that that would be fair
to the human race? Will anyone tell me that it would be fair to the congested
population of Europe to allow the great fields of the United States to go unde-
veloped and uncultivated? When people are striving in Europe for food,
would it be right to leave South America and the United States undevel-
oped? You have, as Mr. Stewart has told you, in the Philippine Islands an
empire which will supply the United States with every tropical need that it
has now and perhaps for all time to come. Will you tell me what principle of
justice to the Filipino or to anyone would dictate to us to allow that country
to go wholly undeveloped? There is no principle of justice which calls upon
us to abandon the most magnificent tropical oasis of the world. Mr. Stewart has
told you, gentlemen, that we are importing into the United States every year
something like six hundred and fifty million dollars’ worth of tropical products.
Do you know how much of the tropical countries of the world the United States
controls? About five per cent. Who controls the other ninety-five per cent.?
Of that other ninety-five per cent. Something like sixty per cent. is controlled
by European nations, and those European nations, gentlemen, are today main-
taining a system of preferential tariffs which compel those tropical countries
to buy their manufactured products from Europe and to look to the suckers in
the United States to buy their raw products. That is why Mr. Stewart can
tell you that the balance of trade with the tropical countries is something like
three or four hundred million dollars against us every year. In other words,
Europe is exploiting those tropical countries with her manufactured products
and forcing those tropical countries to dump their raw products into the
United States, and we pay for it. As years go by and the demand for rubber,
the demand for sugar, the demand for coffee and these various products in-
creases, as Mr. Stewart has already said, is it not surely probable that the
European countries will place an export duty on all raw products even from
those tropical countries and make us pay the fiddler? Now, gentlemen, let
me say to you as business men that we have in our grasp a tropical kingdom
which will supply us with every tropical want that we have. Do you think
that it is good business sense for the United States to surrender an empire
15
and allow ourselves to be at the mercy of the manufacturing countries of Eur-
ope? We have today in Congress a group of representatives who are juggling
with an empire and taking dollars out of our merchants' pockets, and the neces-
sities of life out of the mouths of our own people. There is no principle of
justice under the sun which dictates that we should surrender that country
and throw it open to the rest of the world, that is putting the screws on us.
That is why I tell you, gentlemen, that you will look upon this meeting tonight
as a historic event, because you gentlemen have with you a power which will
enable you, with the rest of us back of you, in all probability to see to it that
the misinformed representatives in Congress will not abandon us out there
and will not throw away an empire which is now in our keeping.
- Now, gentlemen, that is on the general point of view; but let me tell you,
on the other side, that every dollar that you may send to the Philippine Islands,
every single cent that you send over there, is a missionary. You are spending
money every year sending missionaries to China, to Corea, to Japan, to India
and other countries of the world; but let me tell you there is not a dollar that
is expended for this purpose which will give the humanitarian return that a
dollar that you invest in the Philippine Islands will produce. Every dollar
that you send to the Philippines will give you better humanitarian returns than
the dollars you are sending today to India, China, Corea, Japan and the other
countries. I can tell you why, because there are eight million people whom
we found, as General Anderson saw many a time—he saw them standing there
so feeble for want of food that they hardly could tell whether they had a soul.
Isn’t that right, General?
GENERAL ANDERSON: Yes.
MR. SwitzER: Now, gentlemen, you cannot talk philosophy, you cannot
talk the hereafter to people who have that gnawing feeling in their stomachs.
Give those people work, give them something to do, realize their physical
cravings, and then talk something else to them if you want to. There is this
about the Filipino, and anyone who is there knows it, the Filipino is willing to
work if there is someone who will lead him to it and keep him to it. The Fili-
pino has not the sense of initiative. He knows it himself. What they want
over there is someone to start the ball rolling, and those fellows will fall in
line and do the work. I know very well that in the early days every one of us
over there thought that the Filipino was hopeless as a laborer. That was a great
mistake that we made. We were all green over there; we were all green about
the Orient, every one of us. We know today by actual experience that the
Filipino is really a good laborer, and I will give you two examples to show
he is a good laborer. First of all, when the Philippine Railroad constructed
their roads they thought their greatest trouble was to be labor. They started
taking men wherever they could get them, and the Company itself fed them,
to see that they got something to eat, because the native left alone would take
his money and go and gamble it away, and the Railroad Company itself fed
them. As a consequence, they have good laborers there; and you can ask
J. G. White & Company right here in New York and they will tell you that they
16
got good service for the money. A further proof that the Filipino is a good
laborer is the fact that the Hawaiian Sugar Planters' Association maintain
four or five agencies today in the Philippine Islands to gather together Filipino
laborers to send to the Hawaiian Islands. -
Now, as I say, the main point along this line is this: we are doing no one
an injustice over there to develop that country. If there is anything the
Filipinos want today, it is for money to go over there and give them a chance
to work like men and to send their children to school and make human beings
out of them. There is an element here in the United States, gentlemen, that
is advancing the idea of immediate independence for these Islands. To show
the absolute ignorance of some of them, a bill was introduced into Congress
last year which provided for the independence of the Islands in a few years,
and among the provisions of that bill was a Senate. There were to be senators
from all the different provinces. There was to be a senator from Benguet,
which is a wild district in the mountains inhabited by the Filipino head hunt-
ers, where they live on dogs, nuts and roots of trees. Imagine the picture,
if you will, gentlemen, of the senator from Benguet appearing on the floor of
the Senate with a gee-string, leading a pack of dogs, a sack of nuts and roots
to carry along for food. What these men want, gentlemen, is not their inde-
pendence; what these men want is some civilization, and that is what we are
giving them. We have today, as Mr. Stewart has told you, over six hundred
and fifty thousand children in the schools in the Philippine Islands. Some of
those children, gentlemen, are speaking English today and really know some-
thing about education, and their fathers and mothers are savages in the woods.
I am dwelling too much on this because it is not business, and you are business
men; but, as I told you before, every dollar you send over there is a missionary,
and don’t let anyone make any mistake about that. If any of you have any
qualms of conscience, simply throw those qualms of conscience alongside of
that thought, and you will realize that you are doing the finest humanitarian
piece of work that you have ever undertaken in your lives.
Take the situation, however, at the worst, suppose they were given their
independence, we have done so much for those people, that I am inclined to
believe that sheer gratitude alone would force them, even underindependence,
to protect every industry that is over there. There were many things manu-
factured there before we took over the Islands, under Spanish rule, which was
just as bad as you could ever expect it to be under native rule, and even to this
day I sometimes hear about the good old Spanish days; so even if the worst
came to the worst, you need not fear about your investments.
Mr. Stewart has told you, gentlemen, how the Philippine Islands are pay-
ing all of their expenses. Just imagine what we have done in that country
in the last twelve years; imagine how much money has been spent there,
to develop the country, to build the roads up into the mountains, to clean up
the cities, etc.; and yet imagine what could be done by the Government down
there if that empire were once developed; imagine the paying power of all the
commercial elements of that country if they were once developed. In twenty-
17
five years, gentlemen, we could make the Philippine Islands head and shoulders
further advanced than China will be in seventy-five years from now, because
China is a tremendous mass of protoplasm which will take many years yet to get
into a concrete moving element. With the American Government in the Phil-
ippines you have a nucleus there to lead that people to a natural development.
They have six hundred and fifty thousand children learning English today,
and they will really be Americans in a few years. What we want you gentle-
men to do and what we want everybody to do in the United States is to come
over there and put their shoulder to the wheel and take up the work where we
have brought it. There is room there for every one of you. You gentlemen
will undoubtedly be engaged in the same line more or less that my firm is en-
gaged in, but I can assure you now that you will receive the heartiest welcome
of your lives when you get in our office; and the reason of that is that there are
so many opportunities there that we could not even make a scratch on the
surface, that is why; you would not know we were there.
Another thing, and you gentlemen are interested in this proposition,
if you are not, you should be. The Philippine Islands are the finest outpost
for American business in the Orient that you could possibly conceive. You
could not plan a campaign, a commercial campaign, that would present to you
a finer commercial strategic point than the Philippine Islands. They are there
at the door of China and at the door of India. Whatever you sell in the
Philippine Islands is an article which in all probability you could sell in all
portions of the Orient. The American manufacturers, and I speak knowingly,
because we have been importers for the last twelve years—the American
manufacturers did not know how to ship abroad; they did not know even how
to pack the goods in a case. The percentage of breakage of American manu-
factured articles was enough to drive us out of business there in the early years.
We finally taught them in the Philippine Islands how to ship. They know now
how to ship to China, they know what China wants; they know it because
the very thing that we have taught them to do in the Philippines is the very
thing that they must do in China. The Philippine Islands has been a com-
mercial experimental School for the American business man and manufacturer.
All you need to do is to keep that up a few years and let your American manu-
facturers wake up to the opportunities in China and all the Orient, and then
you will begin to realize the value of the Philippine Islands as outposts for
American business.
I am talking too long, gentlemen, I know I am. I can only give you one
or two pieces of advice as a result of our own experience. I would say that
you have an excellent idea. Your idea of organization is exceptionally good;
but when you go over there remember that everything or almost everything
that you have learned here in the United States you must unlearn in the Phil-
ippine Islands. In other words, you must remember that conditions here are
totally different from what they are over there. For that reason let me warn
you to go slow at first; let your men feel their way along at first; don’t jump
at anything. That has been the greatest trouble with American business men
18
in the Philippines—or I do not say business men, but Americans in the Phil-
ippines. We were unfortunate in the beginning in having a great many men
remain there after the war, men who had really never had any business ex-
perience, and as a result of that there were many mistakes and failures made
in the Islands that really gave us a black eye. You must remember that all
the conditions there are very different from what they are over here; but all
you need is men with good commonsense to go over there and study those con-
ditions for a little while, and they will have the situation well in hand. The
opportunities over there, gentlemen, are so far superior to anything that you
can imagine that if I really started in to tell you, you would think that I was
giving you one of my last night's dreams. I can assure you as a business man
that we have presented to us there splendid opportunities. We know of oppor-
tunities there today that we cannot take up, we have not the capital.
They are there, which would give you a return that I do not believe you
can ever realize here in the United States except under some phenomenal
conditions; I mean the normal business of the United States will not begin
to give you the return that you will get on your investment in the Philippine
Islands. Furthermore, if any of you gentlemen really have a patriotic senti-
ment in you, and I know you all have, if you really feel pride in your own
country, if you have in your own breasts a certain feeling that you want your
country to go ahead, if you really feel that you would hate to see the American
flag take a step backwards, then just simply get right back of the Philippine
Islands and help us along in the fight that we are putting up there. General
Anderson and some of the rest of us went over there in the early days and we
won an empire there for you. Now let some of you business men see to it that
our misdirected Congressmen do not give our empire away. And when you
are doing that, gentlemen, you are making excellent investments, you are
doing as fine a piece of humanitarian work as was ever done anywhere in the
world. And I want to say just one closing word, that if any of you gentle-
men are interested in governmental affairs let me tell you that you can go out
of the United States and you can find the cleanest piece of American Govern-
ment that you have under the flag right in the Philippine Islands. There is not
a more effective, efficient, cleaner piece of American Government beneath our
flag than right there in the Philippine Islands, and you can well feel proud of it.
MR. FALLows: Mr. Switzer, if that is the first speech that you have ever
made on the Philippines, you have missed your vocation, and I hope that the
Pacific Commercial Company will release you. Your remark about the possi-
bility of this meeting being historical, and the fact that we may be able to
develop an empire, leads me to recall that the grandfather of the present
Governor-General Forbes, Ralph Waldo Emerson, said “Hitch your wagon to
a star and you can move the universe.” And we are hitching to the star of
the Orient, and our wagon will have rubber-tired wheels to begin with. Gen-
eral Anderson, we will be very glad to hear from you.
GENERAL ANDERSON: Mr. Chairman and gentlemen, I will insist that
I am not deceiving you when I say that I have never made a speech, and I
19
am not going to do so now. I have no business training or experience, and
no business sense, so I cannot give you any side lights on the proposition
that is being discussed. But I can throw a few side lights on the remarks of
my friends, Mr. Stewart and Mr. Switzer. -
The commercial outlook has increased in all that part of the country
enormously since I was first there in 1899 and 1900. What the Americans
have done there has not been overstated by either of you gentlemen. They
have simply transformed the country.
Nothing has been said about the tobacco industry, but I think there are
large areas which can be made very remunerative for tobacco. The copra
and the hemp are grand industries and so is sugar. Where I was last in the
middle of July they are producing great quantities of sugar, and they are em-
ploying modern machinery, and I saw the installation of new machinery there
last January; and over on Mindora they are putting in the very latest and
most approved machinery, and instead of getting sixty-five per cent. of the
value out of the cane, they are getting ninety-eight per cent. The mill was
working splendidly and they were selling the sugar for about twice what it
cost to make.
MR. FALLows: Mr. Kingsbury is so interested in this matter and has
through his personal connections such confidence in the organization and the
plan of operation of the company that he has taken the chairmanship of the
executive committee of the new company, and those of us who know him
realize what that means, to have his genius and his conservatism and his
conscientiousness behind the inception of this work, which you may be assured
is going to be conducted in that careful, methodical and common-sense way
that Mr. Switzer says is essential to success. Mr. Kingsbury, after checking
this matter up very thoroughly, sent a cablegram last week to a friend of his
in the Philippines, and he received an answer just before he came to the dinner
tonight, and I will ask him, if he is willing, to tell to whom he sent the message
and what the answer was.
MR. KINGSBURY: I think I must be a real out and out public speaker,
and you will find that out from the comparison between myself and Mr.
Switzer.
I sent a cable to Harry H. Bandholtz, whom everybody in the Philippines
knows. We were boyhood friends. Bandholtz went to West Point and went
to the Philippines in the early days of the Philippine occupation, and I think
he was a governor, under the military occupation, of one of the provinces,
and when the civil régime was established he was elected governor by the peo-
ple of the province, and he has been there ever since, and for some years has
been acting Brigadier-General in charge of the Philippine Constabulary.
He was over here this summer and I talked with him about the commer-
cial possibilities in the Philippines, but never with any very definite purpose.
I wired him the other day and asked him his opinion of the possibilities of the
islands for the development of copra, silk, coal, oil, minerals, rubber and lum-
ber—I think that is all I mentioned. He wires back: “Excellent opportunities
20
in everything. Joss (referring to a mutual friend) has data concerning coal.
Letter follows.” This was delivered to me just as I left my house.
There has not anything much been said about the small proposition
that we have started on down there. Mr. Garrett went out to the Islands
and spent several months there. He had two friends on the Island, Mr.
Richey and Mr. Taggart. Mr. Richey has been there some years, and came
back to this country, was homesick for the Islands, and went back. He and
Taggart were civil engineers who were attached to the army as civilian engi-
neers. Out of their salaries they were trying to develop a small plantation.
They only had seven hundred acres, and they only got into rubber and copra.
The trees are growing and doing pretty well. They are twenty-eight miles
from Zamboanga and are located on a deep water harbor. Mr. Garrett went
around there and not only looked at their proposition, but all other propositions
anywhere near, including one owned by Mr. Strong, that is just across the
straits, where they were producing rubber. He also investigated the copra
industry, and also several lumber mills, which are making a good deal of
money. He became thoroughly convinced that there is a chance for a very
successful enterprise there, and finally acquired from these men the land
which they had secured from the Government, and twenty-five hundred acres
more, taking all together three thousand two hundred acres. He came back
to this country and thought it was a good chance to form a corporation, and
so it was decided to go ahead on the lines of the plan that Mr. Fallows has
briefly outlined. The money for the proposition has been subscribed; it is a
going concern, and before Mr. Garrett came here he cabled those men to go
ahead with their plowing and planting. The land is all cleared; it was cleared
off by the natives, and has grown up with grass, as you know it does over there,
and then the grass is burnt off. It will take five or six years to realize from
the copra and rubber, and of course the return for the first ten years is gradual
and slow. After that it is a very sure thing, especially the copra. They tell
me copra over there is about the same as wheat is here; it is staple; there is
always a market for it, and in spite of the enormous increase in production,
the price has steadily increased, also due to the increase of consumption.
Mr. Switzer tells me now that they are making butter and lard out of the copra
in Europe, and it has come to be a staple article of commerce and dietetics.
People are using it and there is an enormous demand for it. If we don’t get
anything out of the rubber at all, if the rubber is a failure, an absolute failure,
the probable income from the copra on that plantation will be remarkable.
The figures I would not dare to mention; you would not believe me if I did,
probably.
Now in all these enterprises over there, as we go on, we shall find that the
personal element will play a very important part, and we have got to look out
for that, and we do not want a lot of small men over there, or we will have a
failure. Mr. Garrett I have known ever since he was five years old. Mr.
Richey and Mr. Taggart are men of high principle, trained in the ways of the
natives and know how to get work out of them. A large part of the success
21
depends upon the character of the men in the field, as it does anywhere, as
far as that is concerned. We are going to start in with that proposition,
and Mr. Garrett and my brother, Mr. F. C. Kingsbury, are going to the Philip-
pines to look into those things and see what there is that is good that we can
get hold of, and I hope we will be very conservative about it. As Mr. Switzer
has told us, we ought to go slow on the start; we ought to allow the thing to
develop.
MR. FALLows: I ought to say that our company, the American-Philip-
pine Company, has taken the exact amount of forty-eight thousand dollars
of the seventy-five thousand dollars required for the new proposition which
has already started, which Mr. Kingsbury's brother and Mr. Garrett brought
to my attention on the day when I first talked with Mr. Kingsbury about the
Philippine proposition. So that we have a very substantial interest in what
Seems to be a very good proposition and a nucleus from which to work. And
I want to assure you that with the organization that we have our development
will be always from a centre and never from a circumference.
MR. STEWART: Let me make a statement apropos of what Mr. Kingsbury
has said just now with reference to copra. Beginning in September last year
there occurred the severest drought the Philippine Islands ever had, and
everybody thought it was going to effect the ruin of copra as well as other
things. I only today received information from the Philippine Islands that
up to the present time it had not affected one iota the receipts of copra, and
we have always looked upon copra as the surest crop in the world. I think
General Anderson knows that it is looked upon as absolutely the Surest crop
in the world, and when I tell you that we have experienced the severest drought
in the history of the Islands and yet the returns and receipts from copra have
not diminished a particle, you will begin to see the justification of that belief
that copra is the safest profit in the world.
GENERAL ANDERSON: Mr. Stewart, I can assure you of the copra profit.
Mr. Switzer made a remark about the proposed senator from the Benguet
Province. The last copy of the National Geographic Magazine has a lot of
beautiful pictures of that gentleman, the proposed candidate for Senator.
And I will state further that when I came down this time I collected and
brought with me four of the axes of the head hunters. There were four of
them deprived of their means of support, and the axes are on exhibition in
the Museum of Natural History, with their gory marks on them. They have
all been used.
MR. FALLows: I think it is true, and I want to be corrected if it is not,
that the head hunters are now confined to the Island of Luzon, which lies a
very considerable distance north from the locality in which we are starting
our work. I would like to know about that.
MR. STEwART: About seven hundred and fifty miles from where your rub-
ber proposition is.
MR. KITTREDGE: Is the tobacco industry there very extensive?
MR. STEwART: I overlooked the tobacco industry, which is one of our big
22
industries. We manufacture about eight million cigarettes a day, and about
Seven hundred and fifty thousand cigars a day in Manila, and there is a whole
lot of good tobacco country in the Philippine Islands.
MR. KITTREDGE: Are they improving the quality of the tobacco?
MR. STEwART: Just now they are putting experts to work, and the Gov-
ernment has taken that up, in Luzon, the tobacco country.
MR. KITTREDGE: Is that near Manila? -
MR. STEwART: It is about one hundred and fifty miles north, but it is
on the same island.
MR. KITTREDGE: And is it connected by railroad?
MR. STEWART: No, that is all by boat. The mountains are between the
tobacco fields and Manila. They are building a railroad up in the country.
MR. KITTREDGE: That would be one of the big industries.
MR. STEwART: It is one of the big industries. It is the biggest manu-
facturing industry in the Philippine Islands today.
MR. FALLows: Where is it sent mostly.
MR. STEwART: Practically all of our tobacco goes to England and Spain.
MR. FALLows: Not much has come this way yet?
MR. STEwART: We are prohibited from sending into this country more
than three hundred million cigars a year without duty. The highest quantity
we have sent here is one hundred and seventy million cigars in one season.
It is growing again now. The cigar importations to the United States are forty
per cent. larger this year than they were last. -
MR. SwiTZER: I might state, Mr. Fallows, that in the last few days I
have investigated the cigar business in the United States, and if you will
pardon me volunteering a remark on that subject, I might tell you that when
the United States was thrown open for three hundred million cigars free of
duty, we shipped over here all at once an enormous amount of very inferior
Quality, which gave the Philippine cigar a very black eye in the United States.
A little later on the Government instituted a regulation which required a cer-
tain amount of high grade cigars to be shipped with a certain amount of
low grade cigars. Up to the present time the demand for Philippine cigars
has been only for the low grade, that is for cigars selling here for five cents and
under. Porto Rico instituted a similar regulation, thinking they could force
the consumers of the United States to smoke the higher grade cigars. Porto
Rico realized her mistake earlier than we did, and she has withdrawn that
regulation and left the American consumers and dealers to buy what they
pleased. The result of that is that today there is an enormous demand for
all grades of Porto Rican cigars. The consumption has increased most phe-
nomenally. I was told this by the President of one of the largest tobacco
concerns in the United States, the one that has stores all over the United States.
An effort is now being made to modify that regulation for the Philippines,
because when you remember that eighty-five per cent. of the cigars consumed
in the United States are five cents and under, you can easily see that you
cannot expect to have a large percentage of high grade cigars to send over
23
here; and we put that percentage of high grade cigars too high, and that really
is the point that has killed the cigar industry; and we really did not know it.
The first thing I hope to do when I get back to the Islands is to have that
regulation withdrawn. Mr. Stewart says the Government has taken the to-
bacco business in hand and they are sending experts into the tobacco coun-
try and showing them how to cure the tobacco. That has been the great
obstacle heretofore. That is what they did in Porto Rico.
MR. STEwART: We can grow as fine tobacco there as is produced in Su-
matra. It is just simply a question of handling.
MR. FALLows: Mr. Cutler has asked a question as to how soon we might
reasonably expect a return on any of the products which we have discussed.
MR. STEwART: You take copra, you must wait six years before you get
anything from that product. Catch crops can be put in which will bring in
SOme return.
MR. FALLows: It is expected that we will put in catch crops.
MR. STEwART: Yes, and that helps to keep down the grass. The cocoa-
nut tree begins to bear at the end of the fifth year, but are not in full bearing
before the seventh year.
MR. FALLOws: How about rubber?
MR. STEwART: In about five years the rubber tree taps, but it only gives
about a half a pint of rubber, and when they are seven years old some of them
go as high as two and a half pints or three pints, but they must be about seven
years old before they are really what you call mature trees.
Pretty nearly every plantation that has come into the field in the Philip-
pine Islands recently has been organized by the Government employees who
are getting small salaries, comparatively, and maybe five of them will get
together and put in each month a little of their money, and some of those are
now maturing in good shape; but you can understand the difficulties in hand-
ling a proposition like that on such a small basis, and that is the way nearly
all of our American plantation companies have been developed; I do not
know of one that has been developed with adequate capital.
24
Rep
Ort
No.
: 3
DESCRIPTION OF PROPERTIES OF
ZAMBOANGA PLANTATION COMPANY
Organized Under the Laws of California
CAPITAL STOCK
Preferred, $75,000 Common, $75,000
Prepared and submitted by Messrs. Edward E. Garrett
and Fred C. Kingsbury
The Philippine Islands, the principal insular possession of the United
States, being more populous than all other possessions of our Government,
including the territories, and of vastly greater economic value, offer to Ameri-
cans perhaps greater opportunities in the development of natural products
than any other quarter of the globe.
The Islands have now reached the point of economic development that
fully justifies the consideration of the investor. Questions as to the form
and stability of government are settled. The great majority of all classes
are now interested in developing economic prosperity. The present exports
approximate $50,000,000.00 annually and are natural tropical products
worked upon only in such form as will enable them to be shipped. This is
only a small portion of the possibilities of production as there are larger areas
of virgin agricultural lands untilled and capable of producing any of the tropi-
cal and sub-tropical products used and demanded by all of the commercial
and civilized world. How great and insistent is this demand, is suggested
in the fact that the United States alone annually imports such tropical prod-
ucts in excess of $600,000,000.00.
25
Practically all the products of the Philippines are, by recent legislation,
entered in the United States free of duty and the Islands are thus given a
great advantage over foreign tropical countries. This advantage will be
very greatly increased with the completion of the Panama Canal, bringing
them into closer touch with the manufacturing and consuming markets.
The transportation facilities so stimulated and increased will further their
prosperity, now just beginning.
The area and geographic extent of the archipelago is little realized. Lu-
zon in the North has a greater area than the combined States of Maine and
Massachusetts; and Mindanao, in the extreme South, is as large. The archi-
pelago extends north and south over 1,100 miles and there is a continuous
overlapping of the more than 600 inhabited islands.
The climate of the Islands, while tropical, is really pleasant and livable;
the resident Americans with only ordinary care are robust and healthy. The
range in temperature during the year is from 72° to 94° with pleasantly cool
nights. Work is carried on at all seasons of the year, during all hours of the
day, for a full day period. In the Northern Islands the wet and dry seasons
are pronounced; while in Mindanao and other Southern Islands such extremes
are less marked, and the rainfall continues throughout the year. In the North,
destructive cyclonic storms or typhoons occur, but the Southern Islands are
entirely free from such storms. The South thus offers more favorable condi-
tions; there is no damage or loss to trees and crops as in most tropical locali-
ties. -
Labor conditions are good and sufficient is available. It is efficient under
intelligent and considerate American supervision. Wages are low. Rail-
road, agricultural and other large constructive work is being accomplished
with this labor under American supervision with much satisfaction in effi-
ciency and low cost, and an entire freedom from strikes and labor agitation.
ZAMBOANGA PLANTATION COMPANY HOLDINGS
The property of this Company, comprising 3,200 acres of carefully select-
ed land of which 700 acres are held under fifty-year contract at a nominal
figure, is ideally located on the Zamboanga peninsula of the large Southern
Island of Mindanao, at 7° north latitude. It is twenty-eight miles from
Zamboanga, a thriving port of about 20,000 people and the capital of the
Province and commercial and export center of the South. The lands front
for a distance of three and one-half miles on Sibuguey Bay of the Sulu Sea
with protected deep water harbor controlled by the property. The tract is
traversed and well watered by three fresh water streams, the Curuan, the Ba-
sagan and Binaloy Rivers. These are navigable for small craft and afford
very valuable water transportation facilities. The soil for the most part is
a light silt loam well drained. The land is gently rolling and covered in large
part with wild grasses, having been cleared by the natives in generations
past. Immediately back of the tillable strip, on the mountainous land, is
the untouched forest of valuable hardwoods.
26
Development work on the Company's property is now in progress and
there is a grove of about 1,800 cocoanut trees that will soon bear. Several
hundred acres are fenced and ready for breaking, with buildings and equip-
ment for small operations. This work was started by a local association
and was acquired by our Mr. E. E. Garrett who recently made a trip of inves-
tigation. Mr. Garrett, who has had large opportunity to observe the develop-
ment of commercial orchards and farming methods in the West and who has
individually developed a tract in the Northwest fruit-growing section, spent
several months during the early part of this year investigating conditions in
the Philippines. He studied the political situation, the general economic,
transportation, market and labor conditions. He became convinced that the
opportunities in tropical agriculture there are remarkably attractive and found
that great profits are being made in the production of raw products, and this
in the face of crude and wasteful methods.
The agricultural methods of the native have violated every known rule;
the ground is seldom ever properly prepared for planting and in the case of
cocoanuts and other trees the Filipino seems unable to rid himself of the idea
that the thicker the trees are planted the greater the harvest, resulting in
many tall, spindling trees able to produce not over half a crop. The bearing
stage is long delayed because the seedlings are compelled after an improper
preparation of the soil to fight for an existence with the rank tropical grasses.
With modern methods of seed selections, soil preparation, planting and till-
age, thrifty and heavy producing groves are assured, and the bearing stage
is reached in half the time. And in addition considerable profits are secured
from catch crops produced by judicious cultivation between the trees during
the early period of growth, and further profits later on can easily be secured
by grazing cattle.
The present native methods of preparing the products for market and
the marketing are alike wasteful. Our Government with trained agricultural
men has been carefully studying the conditions and experimenting with mod-
ern ways and adapting present-day farming principles to tropical agriculture.
The practical American is now showing results in healthy, thrifty groves and
amazing crops with large profits. In short, the experimental pioneering has
been done and results of good management, where soil and climatic conditions
have been properly selected, are assured.
After the land and capital the great factor is the plantation management.
Necessarily, there must be highly intelligent, efficient and honest personal direc-
tion. The direct management of the Zamboanga Plantation Company's
affairs in the Islands is in the hands of Mr. A. D. Richey, and his assistant,
Mr. W. W. Taggart. Both are graduate engineers. Mr. Richey, who is 38
years of age, has lived in the Islands some five or six years and until he resigned
to take the management of the plantation, was with the Government as a con-
struction engineer. He was stationed at Zamboanga for four or five years,
in charge of the construction of public buildings, roads, bridges, etc. He thus
is in direct touch with the local labor and other conditions, speaks the dialects,
27
and knows the peculiarities of the natives and their capacity for work, and
has tested and investigated all phases of plantation work. Mr. Taggart, the
assistant plantation manager, is younger. He, also, is a high class man with
a trained mind, likes his work and is an enthusiast in the possibilities of the
plantation. He speaks the local lingo and has an aptitude for handling the
native workmen. The integrity of both is unassailable. By contract with
the Company both receive the greater portion of their salaries in the common
stock at par, being paid only sufficient cash for their current needs. They are
relying for their compensation and future reward upon the ultimate Success
of the enterprise. This is a guarantee of their confidence and good faith.
Both gentlemen are the selection of Mr. Garrett, who has known them, their
standing and their work for a number of years.
The possible range of products from the plantation is almost without
limit. With water transportation direct to the land, and close to a trade
and shipping center, abundance of reliable labor directly available, and with
productive soil and ample rainfall, nearly the whole range of tropical and sub-
tropical crops can be produced. Cocoanuts, rubber, fibres, sugar, coffee,
cocoa, spices, in fact all the tropical products of commerce, and catch crops
such as upland rice, corn, beans, manila hemp, etc., can be raised.
After careful consideration and study of the subject it has been decided
to direct the enterprise to the production of cocoanuts and rubber. The trees
of both are long lived and of comparative quick growth and are native to the
soil. Cultivated cocoanuts begin to bear in five years and rubber in four,
with great possibilities of catch crops during the non-productive period of
the trees. Both cocoanut oil and rubber have a world wide market that is
rapidly growing and expanding. The gathering and preparation of the raw
products for the market are simple, requiring a minimum of skilled labor
and a very simple and inexpensive plant. The market for both is steady
and immediate money is forthcoming from the resident manufacturing and
export agents.
The possibilities of sugar, coffee, spices, etc., are very promising and we can
at any time, when conditions justify, enter into their production.
COCOANUTS
Copra—the dried meat of the cocoanut—is second in importance and value
of the exports of the Philippine Islands (manila hemp is first), amounting in
1912 to approximately $16,560,000.00, besides a large local consumption.
The Philippines are the largest producers of copra of any country in the world.
France at present is the largest market. The oil is extracted and refined,
and goes principally into toilet requisites and food products, the demand for
which is constantly on the increase—in fact it is so staple that export agents
endeavor to secure long time contracts at profitable figures for the grower.
The cocoanut tree is hardy, thrifty, and a prolific bearer under favorable
conditions. The tree and fruit are exceptionally free from pests in this local-
ity, probably because it is in its natural habitat. The boring beetle is the only
28
pest of any consequence, but with modern methods and recent protective
laws, is handled without difficulty.
Bearing groves of the natives, which are invariably too thickly planted
and have been neglected, are largely sought after by the thrifty Chinese for
leasing on a basis of $1.00 per tree net per year. Commercial groves under
American and German management are demonstrating that $3.00 per tree
per annum can be realized. Such results are secured from groves properly
planted and cultivated, and with intelligent preparation of the product for
market.
The cocoanut assures a steady and profitable income with practically
no hazard from crop failure or serious market fluctuation. Hon. Dean C.
Worcester, the efficient Secretary of the Interior of the Philippines, in “Cocoa-
nut Growing in the Philippine Islands,” published by the United States
Government, says:
“After fifteen years of observation on the ground in the Philippines, I
have reached the conclusion that no branch of agriculture offers there such cer-
tainty of steady and assured returns from comparative small investments
as does the growing of cocoanuts, which may be raised to advantage as far
north as Pangasinan, La Union and South and North Ilocos, and flourish in
the Southern Philippines to a degree nowhere excelled and seldom equalled
in other countries.”
The cocoanut bears continually; blossoms, young and ripe fruit are on the
tree at all times. The nuts are harvested five times a year. The meats are
now beginning to be evaporated by modern methods and better and higher
priced products secured. In the preparation, unskilled labor is used; and the
product, produced at Small cost, yields a large continuous profit.
RUBBER,
The magnitude of the rubber industry and the rapidity of its expansion
are well known. The largely increased demands for high grade rubber are
being met to a great extent by “plantation rubber,” produced from groves
located principally in the tropical islands to the south of Asia. These planta-
tions, owned by wealthy Englishmen and Germans, pay dividends of several
hundred per cent. annually on comparatively large capitalizations.
Several varieties of trees produce rubber in sufficient quantity and of a
quality to make it commercially profitable to raise and care for the trees.
Of all the varieties the para rubber tree produces the most valuable product.
It is distinctly a tropical tree and the localities where it flourishes are limited.
The source of supply has been in tropical South America, and the product is
known in the trade as “upriver para,” and has brought the best prices. How-
ever, in certain of the Malayan Islands and in the Southern end of the Philip-
pine Group the para tree flourishes. The soil, climate and rain conditions are
right.
The Philippines during Spanish days did not produce rubber except in
small quantities, gathered by natives from wild trees and vines, and not until
29
very recently was much accomplished by Americans. Dr. H. F. Strong,
who has lived for some years at Zamboanga, carried on experiments at his place
on Basilan Island, a few miles from Zamboanga, testing the various commercial
varieties and demonstrating that the locality was well adapted to para as well
as several other varieties. Recently his interests have been incorporated
as the Basilan Plantation Company and financed by local and Manila capital,
a considerable interest being acquired by Behn, Myer & Co., Ltd., a leading
German mercantile firm of the Far East, and their new planting is being pushed
with vigor. The plantation is now producing and shipping crude rubber to
European markets where its product brings better prices than Brazilian para
because of the quality and freedom from impurities.
The para rubber tree is a rapid grower and is large enough to commence
tapping at four years, at which age it yields about one-half pound of com-
mercial rubber. At five years the yield is approximately one pound per tree,
at six years one and one-half pounds, at seven years two pounds, continuing to
increase with the growth of the tree. The trees are planted about 150 to the
acre. Dr. Strong has kept careful record and states the cost of producing is
less than 30c per pound. The cost of the Malayan Companies is about 38c per
pound, the difference being due, perhaps, to cheaper labor and economical
management. The present selling price is about $1.25 per pound—a large
margin for profit. -
CATCH CROPS
During the development of the plantation and before the bearing period
of the cocoanut and rubber trees and in the course of the cultivation of the
young groves various profitable crops can advantageously be produced and
sold at a profit.
Though rice, corn and similar food stuffs can be produced in great quan-
tities in the Philippines it is a fact that the importation of rice alone amounts
to $9,000,000.00 annually, such a drain being met from the large profits derived
from the exportation of copra, hemp, sugar, etc. It has been found that the
natives take readily to corn as a variation of their rice diet. Three crops of
corn can be produced on the same land in one year and 100 bushels per acre
under proper handling is possible. There is a ready local market for all that
will be produced. Several crops of upland (not flooded) rice can be produced,
and a profitable yield secured. Numerous other quick growing crops can like-
wise be grown as the local demand and need suggest.
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