Chapter XXXV: Section 13: That upon the exportation to any foreign country from

the Philippine Islands, or the shipment thereof to the United
States or any of its possessions, of the following articles
there shall be levied, collected, and paid thereon the following
export duties: Provided, however, that all articles the growth
and product of the Philippine Islands coming directly from said
islands, to the United States or any of its possessions for use
and consumption therein shall be exempt from any export duties
imposed in the Philippine Islands:

352. Abaca (hemp), gross weight, 100 kilos, 75 cents.
353. Sugar, gross weight, 100 kilos, 5 cents.
354. Copra, gross weight, 100 kilos, 10 cents.
355. Tobacco, gross weight:

(a) Manufactured or unmanufactured, except as otherwise provided,
100 kilos, $1.30.

(b) Stems, clippings, and other wastes of tobacco, 100 kilos,
50 cents.

Let us briefly glance at the net results of this law, and its predecessor, the Act of 1902, the export features of which it re-enacted. It is important that every fair-minded American who can possibly spare the time should take such a glance at what Congress has done to the Philippine hemp industry, because of the obvious bearing that such taxation without representation will probably have on the attitude of the Philippine people whenever we get into a war with a foreign power. Certainly the legislation Congress has perpetrated upon them, at the behest of special interests in the United States, has not soothed the original desire of those people to be free and independent.

At page 27 of the report of the Philippine Collector of Customs for 1910, a table is given showing the export duties subject to refund collected under the Act of Congress of March 8, 1902, and deposited in the Philippine treasury to the credit of the Insular Government at the end of each fiscal year (June 30), as follows:

1902 $ 71,064.69
1903 527,228.10
1904 462,433.83
1905 486,475.56
1906 433,991.79
1907 433,458.58
1908 370,513.36
1909 598,917.69
-------------
$3,384,083.60

The following table, taken from this same annual report of the Collector of Customs of the Philippines for 1910 (p. 22) shows the size (weight in kilograms), and value, of the annual Philippine hemp crop from 1899 to 1910, both inclusive. It gives in one set of columns the total exported to all countries, and in the other the part which comes to the United States:

To All Countries. To United States.
Kilos Value Kilos Value

1899 59,840,368 $ 6,185,293 23,066,248 $ 2,436,169
1900 76,708,936 11,393,883 25,763,728 3,446,141
1901 112,215,168 14,453,110 18,157,952 2,402,867
1902 109,968,792 15,841,316 45,526,960 7,261,459
1903 132,241,594 21,701,575 71,654,416 12,314,312
1904 131,817,872 21,794,960 61,886,592 10,631,591
1905 130,621,024 22,146,241 73,351,136 12,954,515
1906 112,165,384 19,446,769 62,045,088 11,168,226
1907 114,701,320 21,085,081 58,388,504 11,326,864
1908 115,829,080 17,311,808 48,813,720 7,684,000
1909 149,991,866 15,883,577 79,210,362 8,534,288
1910 170,788,629 17,404,922 99,305,102 10,399,397

If you have the time and inclination, you can easily figure out the annual "rake-off" of the American hemp importers from the above table. For instance, take the last year, 1910: 99,305,102 kilos at 75 cents per 100 kilos is $744,788.26, which is more than 4% of $17,404,922, the total value of the hemp crop of the archipelago for that year. Add this $744,788.26 to the $3,384,183.60 shown by the above table of refundable duties collected from 1902 to 1909 inclusive, and you have over $4,000,000 rebates accruing to American importers of Manila hemp from 1902 to 1910 inclusive.

In his remarks on Section 13 of the Payne Law of 1909 (above set forth), in the House of Representatives, May 13, 1909, [526] Hon. Oscar W. Underwood said, in part:

When you put a tax on your people for engaging in export trade,
to that extent you lessen their ability to successfully meet
their foreign competitor and reduce the territory in which they
can successfully dispose of their surplus products abroad. Our
forefathers in writing the Constitution of the United States,
recognizing the false principle on which an export tax was based,
put it in the fundamental law of our land that the United States
Government should not lay export taxes. If we enact this law,
we write into the statute book for the Philippine Islands,
legislation which is little short of barbarous, legislation that
no government in the civilized world except Turkey, and Persia,
and other second-class nations countenance to-day.

But the hemp interests won out and the section was adopted. In an argument for the repeal of the export tax, delivered in the House of Representatives August 19, 1911, the Philippine delegate, Hon. Manuel L. Quezon, said:

There is one section in the Philippine tariff law, approved
August 5, 1909, which is seriously injuring the proper commercial
development of the islands.

Of course the earnestness with which Mr. Quezon pleaded his cause may be imagined from the circumstance that, as he says, he is continually advised by letters from his people, and verily believes that if the export tax is not taken off soon the Philippine hemp industry will be entirely destroyed, and the hemp farmers will have to take to raising something else in lieu of hemp, because the present prices hardly permit them to live. In the course of his speech Mr. Quezon offered the following truly eloquent and absolutely unanswerable argument:

Although it has been decided by the Supreme Court of the United
States that the provisions of the Constitution are not in force in
the Philippines, I have serious doubts as to whether said decision
also meant that this Government has the power to enact laws for
the islands which are expressly prohibited by the Constitution
in the United States.

It is through the courtesy of Mr. Quezon that such light as I may have been able to throw on the subject has been obtained. He has shown me letters from the Philippine Chamber of Commerce at Manila and other commercial organizations prophesying ruin to the Manila hemp industry in the event the export tax should continue. One of these letters is addressed to the two Philippine Commissioners in Congress, Mr. Legarda and Mr. Quezon. It informs them of the hopes of the Filipinos at Manila that they, Messrs. Legarda and Quezon, may be successful in their campaign to get the law repealed and that many of them (the Filipinos at Manila) feel hopeful of results in that regard. Speaking for their fellow countrymen at Manila, they say, "The optimists are of the opinion that the matter being in such good hands as yours will be carried to a successful conclusion." Then they give the darker side of the picture thus:

But the representatives at this capital of the famous syndicate,
the International Harvester Company, are of the opinion that we
will be able to accomplish nothing, and theirs is an opinion to
which great weight should be attached, because the vast interests
which that concern represents can set in motion powerful influences
to keep the present law as it is, since it concerns their interest
to do so.

Mr. Quezon has also shown me a letter written to him, March 30, 1911, by his and my warm personal friend, Hon. James F. Smith, formerly Governor-General of the Philippines, now (1912) Judge of the Court of Customs Appeals at Washington, D. C., in which letter General Smith says, concerning the operation of that part of the export tax act of March 8, 1902 (continued by the Payne Tariff Law of 1909) by which American manufacturers are relieved from the payment of the export tax on Manila hemp:

In effect this really and truly amounts to the payment by the
Philippine Government and the Filipino people of a large subsidy
to American manufacturers of hemp. More than that, this concession
to the American manufacturer, by enabling him to undersell his
British competitor, gives him an undue control of the situation
and has put him in a position, to some extent, to control prices
for the raw product.

It seems to me that the American people had better look to their own liberties, when they remember that in the campaign for the Republican nomination in 1912, the Roosevelt Headquarters gave out that pending the Roosevelt dictation of Mr. Taft's nomination in 1908, the International Harvester Company furnished a floor of its Chicago building to the Taft people, this interesting fact being part of the leakage from the Roosevelt-Taft quarrel caused by the Roosevelt charge that Mr. Taft was unfit for re-election because he "meant well feebly"; and when it is recalled, on the other hand, that in the Roosevelt campaign of 1912 for the presidential nomination for a third term, Mr. George W. Perkins, [527] the very personification of undue corporation influence with the Government, assumed the role of Warwick for an ex-President who, when President, had repudiated the advice of his counsel, Governor Harmon, that a railroad company [528] be prosecuted for taking rebates because the vice-president of the company was his personal friend. [529] But let us return to the Philippine rebates, and their corner-stone, the export tax, Section 13 of the Payne-Aldrich Tariff.

In the case of Fairbanks vs. United States, 181 U. S. Supreme Court Reports, page 290, a case in which the court was asked to declare a certain Act of Congress unconstitutional and void, because it imposed what was virtually an export tax, the opinion of the court cites the absolute inhibition against such a tax imposed by our Federal Constitution, and says concerning the wise theory on which this fundamental tenet of our government rests:

The requirement of the Constitution is that exports should be
free from any governmental burden.

The decision then goes on to elaborate on what it terms "that freedom from governmental burden in the matter of exports which it was the intention of our Constitution to protect and preserve." Finally, the court uses an expression which is certainly a stinging rebuke to any law-making power that permits the selfish greed of a little set of importers to get a law passed imposing for their special benefit a paralyzing export tax on the chief staple of a helpless colony:

The power to tax is the power to destroy.

But Mr. Quezon has no vote in Congress and his voice was not heard, at least not heeded.

The summation of the whole matter is this: Both the Philippine people and the American people are, and long have been, suffering from unjust taxation through laws for which special selfish financial interests in the United States, exercising grossly undue influence on governmental action, are responsible. Neither will ever get relief until the government of this nation is wrested from the control of the money-hogs and restored to the people. Until that is done, selfish greed will continue to sow sedition in the Philippines, and socialism in the United States.