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tariff duties on all imports while the Philippines are permitted (under the Cordage Act) to send into the United States 6,000,000 pounds of cordage and twine free of tariff duties. The Cordage Act provides that these preferences, not granted to any other country, are granted to the Philippines.
The Under Secretary of State, in his testimony on February 23, 1939, repeatedly referred to this bill as legislation based on preferences being granted to the Philippines. On page 146 of the transcript, he says:
“Now, the arrangements proposed in s. 1028 are, on the other hand, of a distinctive preferential nature, arrangements which would not be extended to any other country. The whole underlying basis is preferences decreasing 5 percent a year until 1960 when we do get on a position of equality. From then on the Philippines would be just like any other nation.”
There can be no denial that 6,000,000 pounds of cordage and twine coming from the Philippines free of duty or at preferential rates of duty is a preferential to the Philippines.
In the statement it was also said:
“The discrimination is further emphasized by the inclusion in the absolute quota of binder twine-which is on the United States free list. This discrimi. nation is none the less real through the Philippines have not thus far shipped binder twine to the United States."
The above statement refutes its own implication. There is no binder-twine industry in the Philippines.
The only fiber in the Philippines suitable for binder twine is Manila fiber (abaca). The intrinsic value of this fiber is several cents a pound higher than henequen, from which the major portion of binder twine is produced.
Americans are particularly disturbed over the possibility of Filipinos shipping rope yarns into the United States in the form of binder twine, which under our customs policy expressed in our laws, as we understand it, cannot be prevented. Two-thirds of the manufacturing processes of the finished product-preparing the fiber and spinning the yarn-would be completed by cheap oriental labor. The practical effects would be the same as if there were no quotas, limitations, or tariffs on Philippine hard-fiber products coming into this country.
Domestic manufacturers today are faced with excessive competition. Eight State prisons and foreign countries supply 50 percent of America's binder-twine requirements.
Certainly there is no “imperfection or inequality" in preventing the Philippines from creating a new industry based on an American market already harassed by prison and foreign competition. If the Philippines were to usurp any part of the binder-twine market of the United States, that would force United States manufacturers to find some use for their manufacturing capacities. In turn, this would bring about excessive competition in rope sales, depressing values, which would depress the prices of the manila fiber (abaca). so important to Philippine economy.
We will not attempt to go into general economic factors of the cordage and twine industry of the United States, unless you desire. These are covered fully in the hearings of the Cordage Act of 1935. Very briefly, they show a gradual annual decline in the sale of hard-fiber products by domestic manufacturers using free labor of 35 percent from 1923 to 1937 (latest figures available).
The Cordage Act of 1935—Public, No. 137, Seventy-fourth Congress—is more essential now to the United States industry and labor than in 1935 when enacted.
It is our understanding that the Philippine government and Filipino leaders favor the passage of $. 1028. Their position is one of advocating the joint preparatory committee's report because it is the preferential bill in favor of the Philippines, just as Mr. Sayre frankly pointed out.
We therefore, Mr. Chairman, propose that this bill be amended to continue the Cordage Act of 1935 in the following respects :
Strike out lines 24 and 25, on page 4, and lines 1 to 14, inclusive, on page 5, and insert in lieu thereof the following:
“(e) (1) Effective May 1, 1941, the total amount of all yarns, twines, cords, cordage, rope, and cable, tarred or untarred, wholly or in chief value of Manila (abaca) or other hard fiber, produced or manufactured in the Philippine Islands, coming into the United States from the Philippine Islands, shall not exceed 6,000,000 pounds during each successive 12 months' period, which 6,000,000 pounds shall enter the United States duty-free: Provided, however, That from May 1, 1946, through July 3, 1946, the quota of such Philippine products shall not exceed 1,000,000 pounds.
“(2) The amount or quantity of such articles which may be so exported to the United States shall be allocated, under export permits issued by the Government of the Commonwealth of the Philippines, to the producers or manufacturers thereof. This allocation shall be made by the President of the Commonwealth of the Philippines, unless otherwise provided by the legislature of the Commonwealth."
And, on page 6, strike out lines 4 to 10, inclusive.
And, on page 21, strike out lines 23, 24, and 25, and on page 22, strike out lines 1 and 2.
And, strike out the word "cordage" in line 12 on page 6, and in lines 15, 22, and 25 on page 18, and insert, in lieu thereof, in each case, the words "hard fiber cordage and twine products.” Respectfully submitted.
J. S. MCDANIEL, Chairman. Mr. McDANIEL. There is a mutuality of interests between the Philippines and ourselves in that we need their raw material and they need our market. In view of the fact that in 1935 there was an agreement between the Philippines and ourselves expressed in the Cordage Act, and in view of Mr. Elizalde's remarks this morning, I see no reason for taking up the time of the committee to read this into the record.
I do want to publicly, and in the record, thank Mr. Elizalde, on behalf of our industry, for his remarks both voluntary and in answer to the questions which were put to him.
The CHAIRMAN. Thank you, Mr. McDaniel.
The CHAIRMAN. We will recess until 10:30 o'clock tomorrow morning in this same room.
(Whereupon, at 11:35 a. m., an adjournment was taken unti) 10:30 o'clock Wednesday morning, March 8, 1939.)
COMPLETE INDEPENDENCE OF THE PHILIPPINE ISLANDS
WEDNESDAY, MARCH 8, 1939
UNITED STATES SENATE,
Washington, D.C. The committee met, pursuant to adjournment, at 10:30 a. m., in room 424, Senate Office Building, Senator Tydings (chairman) presiding
Present: Senators Tydings (chairman), Miller, and Clark.
The CHAIRMAN. What witnesses are present who desire to be heard
Mr. SEVILLA. I would like to be heard.
STATEMENT OF PORFIRIO U. SEVILLA, PUBLISHER, THE
Mr. SEVILLA. There is now before you a bill modifying, or, at least, to make amendment to the present Independence Act known as the Tydings-McDuffie Act, guaranteeing Philippine independence by 1946.
I am opposed to this bill, Mr. Chairman, for three cardinal reasons. It is legally questionable, in my humble opinion, Mr. Chairman, it is one of those administration policies which if enacted into law is subject to repeal and modification by Congress itself. What will prevent the Congress in 1941, if any other administration hostile to the Philippine interests is in power, from repealing or modifying this act which we are debating today.
The obligations of this bill, Mr. Chairman, if we are to have our independence by 1946, would mean that the Congress of the United States, upon the enactment of this bill, would mean that you are creating a quasi-protectorate of the Philippine Islands.
(At this point Mr. Sevilla's subsequent remarks became unreportable.) The CHAIRMAN. Thank you very much. Who is the next witness? Mr. CRAWFORD. My name is Crawford. The CHAIRMAN. Ñr. Crawford, suppose you go right ahead.
Mr. CRAWFORD. Mr. Chairman, I have a very short memorandum here to read.
STATEMENT OF J. M. CRAWFORD, MANAGER, PHILIPPINE
Mr. CRAWFORD. Mr. Chairman and members of the Senate committee. My name is J. M. Crawford. I am manager of the Philippine Packing Corporation. I live on the island of Mindanao in the Philippine Archipelago. The company I represent was incorporated in the Philippine Islands in the year 1926. It is a 100 percent American-owned company. Our objective was to develop and pack foodstuffs in the Philippine Islands.
I have read the statements presented to your committee by Vice President Osmena, Resident Commissioner Elizalde, as well as the briefs presented by others who have appeared before you. My remarks will be brief as I have little to add to what has already been presented.
I believe I am up to this time the only person who has appeared before you who is a citizen of the United States representing American investment in the Philippines, who actually lives in the islands. For this reason I may be able to give you some first-hand information on the Philippine situation that will assist you in your deliberations on Senate bill 1028.
After years of continuous investigation and experimental work with the expenditure of a large amount of money we decided to grow and can pineapples in the Philippines. Our plantation is located in the non-Christian Province of Bukidnen, the cannery in the Province of Misamis, both on the island of Mindanao approximately 500 miles south of Manila.
Investigation work was started in 1921. The first fields other than experimental were planted in 1928. Our cannery was built and canning started in 1930. Due to depression causing loss of sales, operations were discontinued until 1934. Since that time we have increased our pack until we are now canning in excess of half a million cases of pineapple annually. Practically 100 percent of this pack is sold in the United States.
We followed the American flag to the Philippines not as philanthropists to spread American industry or to improve conditions for the Filipinos, but to make money for ourselves. To date we have not recovered our investment, but we have, however, assisted in developing an American industry. We have also definitely assistel the Filipinos, particularly those living in northern Mindanao. There are people present in this room, Filipinos and Americans, who have visited us at Mindanao. They can testify that our development is unique and the bright spot in that undeveloped district. We have found the Filipinos to be good, conscientious, loyal employees, who like the Americans and are grateful to the United States.
We would like to have Senate bill 1028 become a law, for this would give us more time to recover and make a return on our investment. I have no authority to speak for other citizens of the United States living in the Philippines, but I believe the position of my company is typical of other American investors in the Philippines.
Now, that is all that I have to say other than I might commentI heard Mr. Elizalde's remarks yesterday about the base wages, the base pay of the Filipinos in the islands." He stated that it had been testified previously that the base pay was 30 to 40 centavos. My