Terrero.

Office of the Governor-General of the Philippines.

Most excellent and most illustrious Sir: The politico-military governor of Sulu, in a communication dated the 9th instant, states as follows:

Most excellent Sir: As the time expiration of the exemptions granted to Sulu and its port by decree of the general government under the able direction of your Excellency, dated February 24th, 1877, and extended by superior order issued from the same office for another term of ten years, on August 23rd, 1887, is drawing near, the person who has the honor to sign hereunder believes that the moment has come to call the attention of your Excellency to the matter, and he takes the liberty to set down some remarks in the premises, to the end that when your Excellency determines what is deemed most expedient, they may be taken under advisement.

In the exemptions granted to Sulu, it must be borne in mind that they affect two distinct elements, which constitute the life and favor the development of this locality. Some have reference to the exemption from all taxes, tributes, and gabels imposed, or to be imposed, in favor of natives or foreigners taking up their abode in the Sulu archipelago. Others refer exclusively to the declaration of a free port, with exemption from all taxes and customs formalities in favor of the capital of the island.

In treating this question and in considering what ought to be done in the future, when the moment arrives for determining whether a fresh extension is expedient, or whether, on the contrary, this territory must enter upon the normal administrative life general in other localities of the Philippine Archipelago, the subject must be dealt with under the two aspects above set forth. In regard to the declaration of freedom of the port granted to Jolo, it is undoubtedly expedient to continue it for the present without change. So long as the protocol entered into with the other nations who are parties thereto, continues in force--in which protocol our incontestable right of sovereignty over this archipelago, with the limitations therein stipulated, is declared--it would be highly impolitic to close the period of franchise granted to this port. Should there be established the embarrassing obstacles and difficulties to commerce entailed by the formalities of customs regulations, the English steamers which now carry on the trade with Singapore, would immediately cease to visit this port and would make their destination some other port of the island, where, under the provisions of the protocol above referred to, no one could lawfully obstruct them until after the effective occupation of the new port selected for trading operations, and until after having allowed to elapse the requisite time subsequent to publishing this resolution in the official papers of the Peninsula. The distinguished intelligence of your Excellency will perceive easily that after this had been repeated several times, we should find ourselves compelled either to occupy effectively all the islands of the Sulu archipelago where English steamers might attempt to establish their business, or, in the end, to allow them to carry on their commercial operations at any place that suited them, which, without doubt, would be much more prejudicial than what happens at the present time; for, at any rate, so long as steamers come exclusively to this port or to that of Siasi, as is the case at present, the trade can be watched easily and conveniently and without the commercial operations which are carried on giving rise to diplomatic questions; it is easy, also to prevent the traffic of arms and war supplies, which would not be the case if they touched at other points where our sphere of action is not so direct and effective. Furthermore, the advantages of the present situation must also be taken into account. So long as these steamers touch only at Jolo and Siasi, as happens now, these two points are the only markets, whither all the people of the archipelago must necessarily go to trade, not only to supply themselves with the effects which they import and are necessary to life, but also to sell all the products they gather in their fields and in the seas, which constitute the element of commerce that justifies English vessels in visiting these regions, making it possible to collect sufficient freight to maintain the two regular lines now established. It is obvious that, since we are masters of the towns of Jolo and Siasi--the only points of distribution for effects necessary to the life of the natives here--we can, when we consider it expedient, prevent the sale of these effects to the villages hostile to the city, a most momentous advantage resulting therefrom and a means of government of inestimable value. So long as the Moros have to supply themselves from these markets, our importance is incontestable; all their outbreaks are easily checked without appeal to violent methods; and the civilizing effect which results from the constant intercourse which is necessitated by their coming to the occupied ports, is extended, thereby modifying the sanguinary and turbulent habits of this race. If the revenues from the duties which would be imposed were of sufficient importance to cover the expenses entailed by the occupation of Sulu, the arguments supporting the opinion above expressed could easily be set aside. But unfortunately there can not be expected from the custom house of Jolo, in the event of its establishment, even the expenses necessary to cover the salaries of the personnel engaged therein. For, the foreign steamers which now visit this port would immediately discontinue their voyages, and even though it were possible to prevent them from making port at some other place for the purpose of carrying on their mercantile operations--a thing which would not be easy so long as the treaty is in force--what would happen? Why, that the trade would be continued by means of smaller boats which would come from Borneo, and it would not be feasible to prevent this except by the posting of a very large number of coastguards along the shores of the innumerable islands of Sulu, a method which it would be altogether impossible to adopt. It is, therefore, unquestionably expedient to maintain the present status, whether the matter be considered under its economic aspect or under that of the policy it is necessary to develop in this territory. A very different course must, in the opinion of the undersigned, be followed in the matter of the exemption from taxation granted to the inhabitants of Sulu. These exists here a numerous Chinese colony, which is the element that really enjoys the benefit of the advantages flowing from the present free-port conditions, and it is neither just nor equitable that, while the Chinese find in us the support and protection which enable them to carry on and develop the trade in which they alone engage, they should not contribute in any way towards the expenses of the Government which furnishes them so many advantages. It is, therefore, expedient to impose upon all Chinaman residing in the Sulu territory the obligation to pay the same taxes as are paid by those of the same race in other parts of the Philippines. The establishment of this system promises not only the profit of the sums which would be collected as a consequence thereof, but also the desideratum of introducing order into the anarchical manner of life obtaining among the Chinese here. As soon as the obligation to pay taxes is imposed upon all and the lists of tax-payers are made up, individual interest will see to it that all persons living in the country are included therein; for it is unquestionable that, since each desires to be placed under the same conditions as the other, the Chinamen themselves will be of very great assistance in discovering those who now are not included in the incomplete and untrustworthy census lists existing in the offices of the Government of Sulu. It is believed, then, that it is expedient and just to discontinue the franchise now enjoyed by the Chinese here, and that they should begin to contribute at once towards defraying the expenses of the treasury, paying at least as much as is paid by their countrymen in other parts of the Philippines. It would appear also equitable that the Indians residing here should also begin to pay the cedulas [295] of the class to which they respectively belong; but there must be borne in mind the limited number of individuals of this race residing here; the expediency of encouraging by this means the immigration of fresh residents; and, above all, the services they render in any case of alarm, whether caused by juramentados or by more serious aggressions attempted against the city; all of which circumstances make it proper that they should continue enjoying the exemption from the payment of poll-tax which they now enjoy, as also exemption from all the other taxes upon the insignificant industries from which they gain a subsistence. The treasury could not hope for any happy results in this direction; and, on the other hand, if such a tax were imposed, the place would, in a very short time, be left entirely without any civilian population; for only with difficulty, and thanks to the franchises, can persons be found who will face the constant danger in which residents in Jolo are placed--especially those who engage in the cultivation of the soil in the outskirts of the town; of which class the civilian population is, in a very large majority, composed.

It remains, only, most excellent Sir, to discuss the expediency, or otherwise, of establishing taxation upon commerce, industry, and property. All the urban property of Jolo is in the hands of the Chinese, with so few exceptions that there are not more than three property holders who do not belong to that race. In their hands is all the commerce, with the sole exception of two Spanish houses: every thing relating to business is in their power; so that any burden imposed in this direction would not be borne by them, but would be paid by the garrison of Jolo. For, united as the Chinamen are in every thing that relates to the avoidance of tax-paying, they would come to a perfect understanding to surtax every thing,--not in the same proportion as the contributions they would pay, but with a considerable increase, with the result that the only tax-payer to the treasury and for the Chinaman would be the unfortunate inhabitant of Jolo. And since the population here consists almost entirely of the garrison, which renders such arduous services at this place, I believe that it would not be just to add to the other disadvantages that the service here offers, the very serious one that would result from the imposition of taxes in this capital. Furthermore, one must not lose sight of what might happen or rather what would immediately happen, when, by taxing the commerce of the city, the majority of the Chinamen now established here would go to Maymbung, with a tendency to store their merchandise at other important points in the island, in which places our rule is, it may be said, nominal, and it is unnecessary to insist upon the undesirable consequences that would follow; for we should return to the condition in which Maymbung stood in April of the year 1887, when this town was a very important center of resistence to our rule, due to the facility afforded in that place for the purchase of unlimited arms and ammunition, a business carried on by the foreign steamers who anchored there at that time. And all this without taking into account the undesirability, from a political point of view, of affording the Moros the opportunity of purchasing their supplies at prices lower than those in this city; since, if the merchants in that town did not pay taxes they would be able to sell at lower prices than those in the capital. Summing up what I have stated above and recapitulating the questions herein treated, I will conclude by submitting to the distinguished intelligence of your Excellency that I consider necessary and of the highest political expediency the maintenance of the freedom of the port granted to Jolo; that this franchise should be extended to Siasi, which enjoys this privilege in fact though not by right; and that care should be taken to prevent the slightest obstacle from interfering with the trade at both points, to the end that foreign steamers may, in their own interest, touch only at these two points of the archipelago of Sulu; that the Chinamen should be formed into guilds or associations, after the pattern of the organizations prevailing in other parts of the Philippines, these being necessary, further, to the making up of the lists of tax-payers; that, as a consequence of the formation of these associations, they should be compelled to pay taxes to the same extent as all other Chinamen residing in the country, unless your Excellency is of the opinion that the quota should be increased in consideration of the other advantages they enjoy; that there should be imposed a tax upon smokers of opium and upon the importation thereof. This tax would be a source of revenue of some consideration if it were farmed, as was the intention four years ago, when sale to the highest bidder was desisted from in view of the decree of franchises which is the subject of this communication. Finally, that property, commerce, and industries should not be taxed, nor should the civilian population be burdened with the poll-tax, since the latter deserve consideration by reason of the arduous services they render in this place; and this applies to the garrison, as well as to the civilians who make up the town, who, in the end, would be the persons who alone would have to bear these burdens. Such, most excellent Sir, is the opinion, expressed as succinctly as possible, of the undersigned in regard to these matters, which, at no distant date, will present themselves for resolution and which your Excellency will determine with your well-known ability and good judgment.

Which I have the pleasure to transmit to your most Illustrious Excellency, to the end that you may take note of the part relating to the economic side of this question.

God preserve your most illustrious Excellency for many years.

Manila, July 31st, 1896.

Blanco.

To the most excellent and most illustrious the Intendant-General of the Treasury.

Office of the Intendant-General of the Treasury Division of Direct Imposts

Most excellent and most illustrious Sir: The just considerations set forth by the politico-military governor of Sulu in a communication addressed to his high Excellency the Governor-General of these islands on July 9th of last year, forwarded to your most illustrious Lordship on the 31st of the same month and year, reveal a close study of the questions treated, based upon practice and experience.

The chief of the division of direct imposts, who signs hereunder, in presenting the report ordered by your most illustrious Lordship in your decree of the first day of the following August, must begin by expressing at once his conformity with the views given by the governor of Sulu, in the part relating to this division.

Undoubtedly considerations of the highest political moment led the high authorities of the Archipelago, on August 23rd of 1887, to extend for another term of ten years the franchises granted to Sulu, and since these considerations have not ceased to be of moment, to judge from the enlightened views expressed by the said politico-military governor, it is to be presumed that it is expedient to grant a fresh concession of franchises; but not, at this time, for a period of time equal to that about to expire, though for a period that might well be half that of the previous term; for, regarding the matter prudently, it might happen that during this lapse of time the conditions in the places under discussion should alter in such a way as to counsel either the total suppression of the liberties in question or their partial modification.

But if there are considerations in favor of this new concession, equity counsels that there be excluded therefrom the Chinese in so far as relates to the imposition of the poll-tax, since they control all the business and are the only persons who really exploit that region.

Consequently, the chief of the division of direct imposts has the honor to report to your most illustrious Lordship:

1. That it be recommended to his high Excellency the Governor-General of these Islands, that, to take the place of the present franchises, there be granted again, at the proper time, to the ports of Jolo and Siasi, the exemption from the payment of all urban and industrial taxes in favor of the natives and of the Chinese established at those points.

2. That there be created at once the imposition of the poll-tax upon the Chinese.

3. That the natives and the civilian population be exempt from the payment of poll-tax.

Your most illustrious Lordship will, however, determine whatever he deems most expedient.

Manila, August 6th, 1897.

Marcelino Pacheco.

Office of the Intendant-General of the Treasury Division of Indirect Imposts

Most excellent and most illustrious Sir: In compliance with the decree which, under date of August 10 of the current year, your most illustrious Excellency saw fit to issue, to the effect that, in the shortest possible space of time the divisions of imposts should report upon the matters concerning each one in the proceedings set on foot by the politico-military governor of Sulu in regard to the expediency or the inexpediency of the renewal of the exemption from taxation enjoyed by the natives in that place, I have to state to your illustrious Excellency that:

1. The undersigned chief, fully agreeing with the enlightened views set forth by the governor of Sulu, believes that the maintenance of the declaration of freedom of the port granted to Jolo is of the highest political moment and that the franchise should be extended to Siasi.

2. That in regard to indirect imposts which are of such a nature that, while they are a source of profit to the state, they bring also no small benefit to the tax-payer, these should be made applicable to the Sulu archipelago, as undoubtedly has been the case, as a matter of fact, up to the present time in regard to the stamp and lottery revenues.

3. Both for the reasons set forth by the governor of Sulu as well as for these given by his predecessor on June 11, 1893, in favor of a tax upon opium smokers, the undersigned chief believes that it is not only just but a matter of the greatest necessity to continue the imposition of this tax.

Your most illustrious Excellency will, however, order whatever he deems most expedient.

Manila, September 10th, 1897.

Jose Garces de Marcilla.

Office of the Intendant-General of the Treasury,

Manila, December 28, 1897.

Let the report of the Chamber of Commerce and of the administration of customs of Manila be heard, within one and the same period of five days.

Dominguez.

APPENDIX XIX

THE PROTOCOL OF SULU, OF 1877, BETWEEN SPAIN, GERMANY, AND GREAT BRITAIN, MAY 30, 1877 [296]

General Government of the Philippines