Tue ENp Or THE GALLEON TRADE ee Thseas.a fateful day in 1815 when he gleon Magallanes lft Acapulco, Mexico, to return to Manila, never again to leave. In a significant way, the end of the galleon trade marked the opening of the Philippine colony to world trade. In place of the old symbols of commercial isolation, like the galleon trade and the tobacco monopoly, new and vibrant markers arose: port towns, such as those of Manila, lloilo, Sual, and Zamboanga; American, British, and other European merchant houses; lighted streets in Manila, railroads, telegraph lines, and steam- powered mills; and most ofall, cash crops such as sugar and abaca Centuries eartier, such changes would have been unthinkable. Spanish authorities had viewed the Philippines as a colony with lim- ited economic potentials, unlike Spanish ‘America. Yet the Philippines was rich in re- sources and products. Cotton grown in Ilocos and Batangas was said to be superior to that produced in Bombay and Calcutta. Panga- sinan, Pampanga, Bataan, Laguna, Tayabas, and Camarines all produced indigo, with the best quality coming from Laguna. Sugar from Pampanga and Pangasinan was reputed t0 be better than that produced in Java, China, or Bengal. A propensity for trade One account of the Philippines in the early 19th century said there was "scarcely an is- land or province that did] not carry on some traffic or other.” Thanguis ar markets were a ‘weekly sight in most towns. Speculations on the prices of local crops in demand ~ such as indigo, sugar, and rice — were such that a Spanish observer concluded that the Filipino “propensity to barter and traffic... mall kinds of ways” was “universal.” But trade was limited by domestic produe- tion that operated on relatively crude meth- ods. For example, beeswax produced in the Visayas and Cagayan was not of good quality because of impurities that setled in the cake Black pepper, though grown in Tayabas, Batangas, and Laguna, could not compete with pepper grown in the neighboring islands of Southeast Asia. Despite the demand from China and other markets, and despite the su- periority Philippine products might have had over their counterparts in Asia, these goods could only be produced in limited amounts and mainly forthe local market. Furthermore, the colony was not free to trade with outsid- ers apart from Chinese and galleon traders. But as the winds of change began to sweep across the Iberian Peninsula, Spain discarded its mercantilist thinking, Guided by Bourbon, reformers, the colonial government attempt- ed to develop the economy by experiment- ing with such crops as coffee and spices, introducing new industries such as sill Opposite: A smoslern lighthouse ‘at the mouth of the Pasig River. Inset: Expatriates of the time lived in spacious homes along the banks of the Pasig. +production, and offering incentives for sci- entific studies and inventions, The prime movers behind these changes were neither the colonial government nor Spanish traders but British and American ‘merchants and shippers. The economy ~ once divided into “purely” Western com- merce (namely, the exclusively Spanish galleon trade), indigenous subsistence pat- terns (which were heavily agricultural), and Chinese economic activity in the colony = sgtadually became consolidated. By the tur of the century, England and the United States had become the colony’ largest trading partners, with Spain falling way behind. Where the galleon trade hardlynncluded Philippine goods, the expanded foreign trade in the 19th century revolved around homegrown products previously con- sidered unsalable abroad. Certain crops were rickly transformed into cash commodities, as seen in the rapid transformation of Negros island from forest lands into highly prized sugar haciendas. Chinese immigrants, who were once is lated from the rest of the colony, benefited greatly from the liberalized policy. At last hey ‘could practice the profession of their choice, acquire land, inherit property, and best of all have access to the lucrative monopoly con- tracts offered by the government. Drawn to new ports, these Chinese settled outside Spread: Peele, Hubbell and Company whose offices and warehouses are shown here — was a major American player inthe Philippine import- export trade.‘Spread: Banqueros stationed at the Pasig wharf wait for passengers Manila, trading freely, lending out money, and eventually owning land as payment for failed debts. In many ways they bridged the distance between local producers and con- sumers in the countryside on the one hand, and export and import firms in Manila and the port towns on the other New forms of private estates emerged that encouraged hierarchical sets of relations among owners, managers, resident tenants, and outside farm workers. The landed class, symbolized by the friars, now came to in- clude Filipino principales and Chinese mes- tizos, while cash tenants, sharecroppers, and contract laborers worked the land. Steeped in folk culture and isolated from the Span- ish-speaking provincial elite, Filipino peas- ants continued to subsist the way they had done before. Agricultural exports Inevitably these social differences would become more and more pronounced becauseexports consisted almost entirely of agri cultural products that depended on land ownership structures, By the close of the cen- tury, agricultural commodities already ac- counted for 95 percent of total exports, These products ~ abaca, sugar, tobacco, and coffee = may have been few, but they defined the shape of the export trade, Such a high con- centration of exports in a few products be- came the marked feature of the 19th cen- tury economy that was carried over into the next century. Domestic commodity exports also rose in value. In 1810, for example, these amounted to half a million pesos. Twenty years later, their value neatly tripled. Equally remark- able was the growth in foreign trade. By the time the country was ripe for revolution, the export trade had grown more than 36 times Left: An Tocano imaclay iron pan what it was in 1825, while imports had in- ‘creased 14 times. The tremendous leap took place after 1850, largely due to the opening of new ports to foreign shipping, Total trade = according to a 1955 study by Benito F Legarda, Jr. — amounted to 6.8 million pe- 505 in 1850, which jumped to 18.2 million in 1860, 48.9 million in 1880, and 62 mil- lion in 1895, In the first part of the century, imports generally exceeded exports. But from 1850 onward, exports overtook imports; and for most of the latter half of the century, the colony enjoyed a favorable balance of trade. The main articles of the export trade were ‘ sugar, tobacco, hemp, and coffee, which con- stituted 75 to 95 percent of total exports afier 1850, Sugarand abaca accounted for the larg est share, and coffee, the least. The decade 1870 to 1880 was particularly good for these products. Not only did the volume of their exports grow, but their average unit values (per metric ton) also peaked during those years Asa result, the average prices of cofiee and leaf tobacco, for example, more than doubled, Of course, the trade was subject to agri- cultural factors and cycles. For instance, cof- fee was practically wiped out in the late 1890s because of a blight; hence the fall in its share of the trade from 7 percent in 1890 to less than 1 percent in 1895, boiling sugar cane losedLeisure Time in Old Manila FELICE PRUDENTE STA. MARIA a was fashionable to enjoy moments of leisure with one’ relations in the 1800s. Family-centeredness was the rule, whether in cities, farmlands, or fishing environs. In areas under the Spanish empite’ political jurisdiction, churches and schools reinforced the virtues of wholesome family life It was important for friends to meet and get along with one’s family: Family events — a birthday, saint's day or name day, beetrothal, wedding, and even departure for heaven ~ offered diversions from routine. Catholic holy days and royal holidays were other occasions calling for a reunion of the immediate family, if not the clan. Get- togethers gave members of a household opportunities to share talents in home arts, music, visual arts, poetry, and declamation. Any eligible man or woman was expected to excel in the refinements associated with urbanidad, Urbanity, the quality of being urbane and citified, was a keyword in the 1800s, The worlds great cities of the period provided access to the best in arts and sciences, as exemplified by regularized mass transportation, planned public space including parks and gardens, sports and gaming facilities, mectical and postal services, learning institutions, libraries, theaters and performing arts venues, museums and visual arts galleries, hotels and restaurants, international exhibitions, and shops. Urban life was set to precision based on pocketwatches and clocks; provincial life around the world still relied ‘on sensing time by positions of the sun and the moon. The 19th-century goal was tw enjoy the novelties and to master the customs of city lifestyle Urbanidad was marked by delicacy in taste, graceful and studied gestures, extreme politeness, a desire for knowledge especially through reading, artistic accomplishment, stylish attire, knowledge of world history and geography, and a trendy home. Since trappings of urbanidad ‘were imported, they cost far more than ‘what most common pocketbooks could alford. Local attempts to copy fashions, including those that could not withstand long sea voyages, sometimes resulted in excellent innovations, ‘Among the culinary arts to master were pickling, preserving, confectionery, pastrymaking, bread baking, table setting, and the cooking of outstanding fiesta fare. Ik was not enough to have a lot of food. Preparation included cutting ingredients finely or intricately. Pickles, for instance were decorated with vegetables shaped into flowers or the letters of a name. Fruits and rinds were carved to resemble : lacework before being preserved in syrup, To serve French classic cuisine was considered the ultimate challenge. A girl schooled in Parisian haute cuisine was a family’ treasure, Social status depended on a family’ ability to awe guests with unusual presentations: a sweet pepper bush with each fruit stuffed and deep-fried while clinging to its branch; an erupting volcano made of mashed potatoes and hidden burner aflame; an epergne laden ‘with carabao milk pastilles (pastillas de leche), each in paper wrapper handcut topear the name of @ guest or a hospitable message such as Amistad (friendship) or Recuerdo (keepsake). ‘Women challenged their fingers by embroidering, beading, crocheting and ‘making bobbin lace. French modiste skills ‘were part of a young lady's schooling, and. ‘many girls proudly wore their own creations. Gifts were homemade, Ladies hhandrolled fine silk handkerchiefs, then embroidered on them the monograms of men and women who mattered in their lives. They sewed linens for home and parish church, and made fabric or paper flowers to decorate altars and processional carriages, ‘There were other entertainments leading towards love and marriage. To outsmart, chaperones, the young mastered a sign Tanguage that consisted of manipulating fans, handkerchiefs, hats, canes, flowers and stamps. They consulted letter-writing guidebooks, made invisible ink for love letters, practised florid penmanship, and sought to master poetic styl. The arts offered hobbies to fill up free hours. Invitations arrived for bailes (dances including formal balls), veladas (music and literary progeams), tertulias (intimate get- togethers at home incorporating music, poetry, and conversation), bodas (Gveddings, usually with dancing, speech making, and poetry recital at receptions), and fiestas. Competence in a musical instrument was highly desired, espectally for flute.violin, cello, piano, guitar, accordion, and harp. Some parents prided themselves in having a family string ensemble. Love songs from zarzuela and opera were in vogue, along with the waltz, rigodon, habanera, and polka. Most Filipinos spoke only the languages of their provinces; speaking Spanish was a clear ornament. Ability in a foreign language Was considered a mark of sophistication, indicating that one may have travelled and bheen educated overseas. The local milieu enriched Philippine arts with its own melodies and lyrics (kundiman, kumintang), poetry (awit, horido), theater (kamedya, sarswela) and culinary specialties. Manilans sought to give the colony’ capital the city fashion it could muster Moving picture machines and phonographs were introduced in the 1890s, There was live theater with performances by foreign stars (Italian opera, Spanish zarguela), adding a sense of the world-class. Town fiestas, as well as antistic and literary societies, held annual contests and programs that inspired contestants to practice diligently at home Indoor entertainments sought increasing cosmopolitanism as international trade increased. Then as now, a person could select what he or she liked from foreign culture and what was treasured from local tradition. The family, immediate community and the Catholic Church (the only religion allowed by the Crown) played powerful roles in shaping a person's sense of well-spent leisure time.a Spread: Hoito was one ofthe first, {international ports in the Visayas. In the early 19th century, sugar was grown mostly by small landowners in the provinces of Pampanga, Taal, Cebu, and Panay. They either depended on local ad- vances for capital in the case of large orders ‘or were paid upon delivery for smaller pur- chases, Sugar refining was crude and nearly completely in Chinese hands. But between the 1830s and the 1850s, the production cof sugar expanded greatly 1n 1855, lloilo was opened to foreign com- ‘merce, stimulating the growth of the indus- try in Panay and Negros. By the close of the ‘century, the island of Negros had become the principal sugar producer and the volume of sugar exports alone amounted to more than 2 million pounds. Early British initiatives ‘were especially crucial in the development and expansion of the sugar industry. The tobacco monopoly In contrast, tobacco was a Spanish domain. The government established the tobacco monopoly in 1781, 15 years after it issued the order creating the monopoly. Under this,seuup, the goverment enjoyed sole control over te production, manufacture, and trade of tobacco initially in Manila and its adjacent provinces in central and southern Luzon, and Subsequently in Pangasinan, Zambales, Mindoro, and Cagayan. Spain then became the country’ largest trading partner for to- acco exports. In 1847 Spain held 48 per- ent ofthe trade, a share that rose to 87 per cent in 1873. The monopoly, however, was beset by organizational problems and corruption in different levels of the bureaucracy, each zealously guarding its smuggling zones. Tobacco growers complained about the system of grading tobacco leaves that dic- tated how much they would be paid. The official practice of payments through credit certificates instead of cash also angered tobacco producers, By the middle of the 19th century, Span- ish merchants, British consular authoritie and even some colonial officials were push- ing for the closure of the monopoly. When the monopoly was ended in 1883, the field it left open was quickly occupied by the Compaitia General de Tabacos de Filipinas which, in a sense, became a private mo- nopoly that grew, bought, sold, and distrib uted tobacco. The Spanish share of the to- bacco export trade, however, remained high even after the tumover: 79 percent in the period 1888-1892 and 67 percent in 1895, with the bulk held by the tobacco company. The demand for abaca, particularly from USS. ship makers, helped develop abaca as an export crop. Foreign shippers found Phil- ‘ppine hemp not onl lighter than others but also sturdier in salt water, unlike other types of cordage that had to be tarred for protec- tion against the salt. The biggest hemp buy- ers were American traders who obtained their supplies through agents that scoured Cama- rines, Leyte, Samar, and Cebu. Between 1850 to 1890, the volume of abaca exports to the United States more than doubled. In fact, for most of the period, the United States domi- nated the export trade in abaca Unlike sugar, hemp, and tobacco which catered heavily to European markets, rice had strong market in China, The opening of a port in Sual, Pangasinan, in 1855 helped boost rice exports to China, Sual being a 1s Left: Cigar makers and buyers in Manilamajor receiving point of produce from Cen- tral Luzon. Understandably, Chinese traders flocked to this port where largely British ves: gels docked. Asa result, more than 20 mer- thant houses were established in Sual, most of which were short-lived. By the late 1870s only one firm remained, the British-owned Heald and Company, which did all the bi ness in the port Rice was an important export crop. In 1836 it was the second major commodity, dropping to fourth place in 1846 and hover- ing between fourth and fifth until the 1860s. However, unlike the other agricultural ex- ports, rice remained an export product only ‘until about 1870. Thereaiie, it was imported tuntil the end of Spanish rule, The shift of rice from an exported to an imported com- modity can be explained by a combination of external and internal factors. To begin with, rice exports to China had always been affected by conditions in China, easant uprisings, floods, droughts, and high local production in China raised or lowered the demand for Philippine rice. Also, Saigon rice was becoming competitive in the mar- ket, In 1885, SualS life as a port ended. Part of the reason for the closure was the pres- sure on Filipino farmers in Luzon to produce the more lucrative cash ctops of tobacco, sugar, and abaca. With decreased supplies of rice going to Sual, the days of the port ‘were numbered. Foreign textiles and Chinese traders The concentration of commodities in the export trade was also evident in the import sector. A large portion of imports consisted of textiles, whose value rose consistently throughout the century. In 1846 textile im ports amounted to about 1 million pesos. Ten years later their value doubled, reaching a high of 9 million pesos in 1880 and more than 10 million pesos in 1894. In relation to the total import trade, cloth imports, espe- cially of British textiles and Spanish cotton, accounted for one-third to more than half the total value. ‘Although native cloths had always had a small value in relation to the export trade, their value rose steadily until after the middle Opposite: From the banana family, abaca vas grown mainly for rope. Left: Weaving hemp and other shop, ManilaRight: Trains replaced Daneas and helped develop the sugar industry in Bulacan, Pampanga, Tarlac aan Pangesinan, of the century: In 1818, for instance, the value of indigenous textiles was 54,706 pesos; in 1846, their value rose to 72,649 pesos. From the mid-1850s to the mid-1860s, external (mostly American) demand for abaca cloth in the lining and baling of cotton increased, and the value of native textile exports jumped even higher to 108,901 pesos in 1856 and 152,278 pesos in 1864. Three years later, however, the demand declined and the value of indigenous textile exports dropped by 76 percent, In 1870 this amounted to a measly 10,455 pesos. Given the push for foreign textiles, it was inevitable that local textiles ‘were displaced from the market. Imported textiles and other goods were distributed by Chinese traders who brokered between export-import establishments in Manila and consumers in the provinces. Stores of the sari-sari type served as local distribution points for foreign products. In exchange, the Chinese bought agricultural goods to he sold to foreign agents engaged in the export trade. To support the export and import trade, entirely new physical in- frastructures were set in place Ports and communications Ofvast importance to foreign commerce were steam navigation and the rise of the ports of Shanghai, Hong Kong, and Singapore, the latter two being transshipment ports for Phil- ippine trade. The average tonnage of vessels that cleared through Philippine ports jumped dramatically from 47,095 tons in 1837 to 345,350 tons in 1887, and the number of vessels also increased from 135 to 435 aver the same period. ‘Apart from steamer freight, communica- tion lines and interisland connections were also introduced. Most of these were initiated by the British who put up telegraphic lines linking Manila with such entrepots as Singapore and Hong Kong, as well as an interisland telegraphic system. The Manila Railway Company, Limited, also British- ‘owned, built the Manila-Dagupan line using imported construction equipment. Another British firm, Smith, Bell and Company, ab- tained the franchise to run a railroad east of Manila. Warner, Barnes and Company, also British, began to construct a railroad inMindanao that was later overtaken and stopped by American rule Transportation by coach also improved. Pulled by a pair of horses that traveled 20 kilometers a day, the coach accommodated ten seated passengers and eight more stand- ing. A new mode of transport was intto- duced with streetcars. In Manila there were at least five car lines ranging from 2,200 meters long (the Malacafiang line) to 4,400 meters (the Malate line). To light the streets of Manila, six foreign firms offered bids in 1889. Gas lamps eventually gave way to electric lighting before the end of the century. Financing foreign trade ‘An equally important aspect of foreign com- merce was its financing. The first bank in the Philippines ~ the Banco Espaiol-Fili- pino, established in 1852 with capital supplied by local Catholic charitable orga- nizations — dealt mostly with local business, including the colonial government’ trans- actions which it virtually monopolized. The foreign exchange business in Manila was handled instead by British banks already established in Asia: the London-based Char- tered Bank of India, Australia, and China, which opened a branch in Manila in 1873, and the Hong Kong-based Hongkong and Shanghai Banking Corporation, which put up a branch three years later. But there were also two Filipino financial houses that were set up: one by Paris-edu- cated Damaso Gorricho, who ran a stnall moneylending business, and the other, a bank put up by Francisco Rodriguez, who led a colorful life. Rodriguez was charged with involvement ina local uprising, arrested in 1823, and then shipped to Cadiz, Spain, from where he eventually escaped. Gorricho ran to London where he was helped by the American Quaker community and eventually became a British subject. Af- ter he was pardoned by Spain, he returned to Manila where he associated with foreign traders and founded his bank as a compan- ion to the other foreign banks. Upon his death, Rodriguez bequeathed his fortune to the Queen of England in trust forthe families meely Left: A banknote from EL Banco Espanol- Filipino, 1865.Banking BENITO LEGARDA, JR. Byte properly speaking, refers to financial intermediation, that is, taking deposits from and making loans to the general public. In this sense banking came to the Philippines only about the third or fourth decade of the 19th century. However, separate functions commonly regarded as banking operations, like lending and foreign exchange dealing, could be and were found long before the advent of formal banking, performed by moneylenders or moneychangers. The venerable obras pias or pious legacies, for instance, had financed much of the galleon trade, trade with neighboring regions and building construction since the 16th century. These were testamentary bequests lent out so as to yield sufficient income to carry out the donors’ stipulations, such as saying masses for the dead, distributing alms, and in one case providing a water system for Manila (the Carriedo obra pia). The earliest domestic financial houses were those of Paris-educated Damaso Gorricho, and of the Anglicized Filipino Quaker Francisco “Quico” Rodriguez, who had studied in Calcutta and Goa. They ‘were not banks, strictly speaking. 4 Gorricho’s was apparently only a moneylending firm. Rodriguez was credited with organizing, toward 1830, the first Filipino financial institution which was conducted as @ companion to the British and American commercial houses Alter his death following the Crimean War, another Filipino financing firm was started by Mariano Tuason Banking with the use of intermediated funds, however, was initiated by the foreign and particularly the American commercial firms. A German businessman reported that up to 1860 and even later, banking transactions were carried out almost entirely through two large American houses: Russell & Sturgis, and Peele, Hubbell & Company. They do not appear to have entered banking by design, always referring to themselves simply as commission merchants. But their early operations (in the 1820s) involved making advances to local growers in order to censure their hold on the harvests. At that time both local and foreign payments were made in silver coin, and such advances ‘were financed by specie inflows. In the 1830s international payments began to be made for the most part in bills, drawn primarily on London, but also on other commercial centers, These bills were not usable in domestic payments, and a way of raising pesos had to be found. ‘ This was accomplished by accepting money from the public evidenced by a note o quedan (from the words thereon “queda en nuestro poder la cantidad de...”) ‘The quedanes had a term of one year and generally yielded 8 percent. Most were issued to order, but there were some to bearer; all were negotiable by endorsement. These deposits came from the more affluent elements of Manila society, including the four friar orders, but there were also depositors from the provinces and from modest economic backgrounds, Using these funds for advances to agriculture was a clear instance of financial intermediation,‘Formal institutional banking started just after mid-century with the Banco Espafiol- lipino de Isabel II (extant to this day as he Bank of the Philippine Islands), uthorized on August 1, 1851 and nencing operations on May 1, 1852. jalf the initial capital of 400,000 pesos the peso symbol was devised only in :903) came from the obras pias and the ajas de comunidad (funds earmarked for al public works), and the other half the general public, including some oreign merchant houses. By 1896 its ital had greatly increased. Its first co- ‘were the merchants Jose Ma Tuason and Fernando Aguirre. ‘Asa quasi-public bank it was under the tronage of the governor and captain- eral, and was empowered to issue its notes. However, its quasi-public ‘Two decades later the entry of two British banks strengthened Philippine king ~ the Chartered Bank of India, “Australia and China opened by James somerville in December 1872; and the ‘orporation by Charles I. Barnes on November 11, 1875. The latter, founded 1865, had till then been represented by Russell & Sturgis, and among its inco Espanol-Filipino. With their coming, the foreign merchant firms diminished their reliance on direct leposit-taking and came to depend more ‘on bank borrowings. At Peele, Hubbell & ‘Companys bankruptcy in 1887 the Hong Kong Bank held nearly 45 percent of its liabilities. The commercial banks put up branches in other poris of entry, like Tloilo Commuted funds of the obra pia de ta “Misericontia amounting to 33,959.67 pesos capitalized the Monte de Piedad y Caja de Ahorros (extant to this day), a unique combination of savings bank and pawn shop, which started operating July 24, 1882. With its founding, the institutional structure of 19th-century Philippine banking was completed. ‘Mariano Tuason, manager of banking, ‘operations for J. M. Tuason & Company in 1860, tried to compete with the Banco Espafol-Filipino by proposing that its checks be accepted for official payments up to certain limits, fully secured by cash deposits. This was rejected precisely because the government did not consider the firms checks on a par with those of the Banco Espanol-Filipino, which it considered its own bank, established, encouraged, and supervised by it, The Tuason banking operations Included receiving deposits and current accounts at interest, discounting commercial bills and promissory notes, and drawing bills on London, Paris and Madirid. Among Jose Rizal effects in Fort Santiago was a bill of exchange dated ‘August 29, 1896, drawn on the Madrid banker A. Bayo by Tuason & Company.Spread, top: Binondo ‘square, the wading quarter of Manila Spread, bottom: Offices of Russell and Sturgis, one of the coldest American commercial houses in the Philipines. of British soldiers who lost their lives in the Crimean War, Apart from these banks, commercial houses financed the foreign trade but in a different way: Unlike the merchant houses, banks took in teal estate as security for loans and generally charged lower interest rates. But the foreign commercial firms had sev- eral advantages over the banks. A little capital goes a long way Officially, these firms were simply commis- sion agents, receiving a percentage of orders from buyers and sellers abroad; but in fact, they did more than receive commissions. By introducing bills of exchange, these merchant houses ventured into commercial banking and revolutionized foreign trade transactions in the 19th century. The dominant mode of payment then was in pesos or Mexican sil- ver dollars, which meant traders had to have ready cash. But with bills of exchange, which oper- ated just like today$ letters of credit, traders could buy with litle capital. A European buyer, for example, could dispatch a ship to Manila with an order for so many tons of, say, sugar, and pay for these with a bill of exchange. When the order arrived in Lon- don, the bill would not fall due until nine or ten months later, giving the trader enough time to sell his goods and perhaps play with market prices. In this way foreign houses ‘were able to compete more fiercely than other traders who still transacted in pesos. Sometimes the commercial firms traded on their own account. Whether on their own, account or on behalf of foreign buyers, they operated through advances given directly to growers or indirectly through local trad- ers (a good number of them were Chinese) who sought out supplies of cash crops. By making advances on crops, these merchant houses were able to control the sources of supply. Moreover, as agents of insurance and shipping companies, they were able to link the colony to the major trade centers of Lon- don, New York, and Boston, and help ex- pand Philippine commerce in new ways. Their vast network and entrepreneurial skillgave them a distinctive edge in the market In 1837, there were some ten such merchant firms, atleast two of which were British, at least two American, and one Spanish-owned but run by an American. The trade network If trade was concentrated on a few products, the distribution ofthese productsalso tended to concentrate on a few countries, The United States, Great Britain, and China were the Philippines’ key trading partners, with the latter two figuring more prominently in terms of total trade. Together these three accounted for half of the total trade in 1825 and for a litle over half in 1847, in sharp contrast to Spain’s share, which never exceeded 9 per- cent from 1825 to the end of the century. Icis likely that Britain’ participation was underestimated because official records clas- sified Hong Kong, then under British con- trol, alternatively under China and under the British East Indie§ (Britain’ colonies in Southeast Asia). With Hong Kong, the Brit- ish East Indies controlled a substantially larger share of the trade that, if added to Britains portion, would give the latter the largest chunk of the commerce. The Hong Kong factor could also explain why China's share of the trade fluctuated between extreme low and high points. Just the same it would be hard to say exactly where the products that passed through Hong Kong finally landed, since this port wasa vital transshipment point for trade not only with China and other parts af Asia, bbut also with Europe and the United Stat Since Spanish tarifflaw favored goods carried Left: The prestigious Hotel de Oriente in Binondo.Right: British couion textiles were adopted das saya (shir) ‘material by the loca on Spanish ships, foreign shippers took ad- vantage of it by loading imporis on Spanish ships while transporting exports on their own vessels. A further look at the trade figures from Legarda’ study shows that in the Philippine ‘export sector in the years 1855-1890, the competition among Britain, the United States, and China was keen, with the United States taking the lead for most of the period except in the 1870s and the 1890s. In 1880, for instance, the U.S. accounted for 44.4 percent of total exports, followed by Britain with 25.9 and the British East Indies (with Hong Kong) with 21.8; Spain had a measly 4.8 percent share. Even then, Britain and China were never far behind, unlike Spain. ‘The import sector, on the other hand, was clearly dominated by Britain and, to a lesser degree, China. This was due to Britain’ tex- tile imports that constituted a large compo- nent of the total import trade. Even Spain enjoyed a larger share of the import trade than the United States, which was, of course, reversed when the latter imposed free trade in 1909. Another way to look at the geographic distribution of foreign commerce is to compare the respective shares of traders in specific commodities. Britain had a greater share of the sugar trade until the 1870s (46.4 percent in 1873). But in the next decade and half, the American share increased tremen- dously (66.1 percent), with Britain regain- ing the lead only in 1895. In contrast, abaca ‘was more of an American preserve. Except for the last two decades of the century, the USS. share of the abaca trade was consider ably larger than that of Britain (73.5 percent, for instance, to Britain 25.2 in 1857) American commercial interest in the Phil ippines stemmed initially from a desire to gain a foothold in China, The location of the Philippines along the route to Canton at- tracted American traders to the colony. By the second decade ofthe 19th century, a good ‘number of American ships were frequenting, Manila, In 1816 an American commercial agent living in Manila was appointed perma- nent consul. Spain's last moves American commercial interests received a boost in 1848 when Spain declared Manila an open port for whaling vessels. The extent of American business can be gauged from the influential role played by three Ameri- can merchant firms in the export-import trade: Peele Hubbell and Company; Richard D. Tucker; andl Russell and Sturgis. On the other hand, Britain was already in control of large portions of the colonized, world when it entered the Philippine tradé Moreover, it dominated foreign shipping worldwide. Thus when the colony was opened to outside commerce, the British ‘were among the first to respond. In 1809 an English firm obtained a permit to operate in Manila, and in 1844 the first British consul arrived. In no time at all, British interests in sugar, abaca, and tobacco grew Nicholas Loney, the consular official in ilo, was singularly responsible for intro- ducing milling machinery and creating a fertile environment for the budling sugar in- dustry in Negros. In many ways British com-mercial activity stimulated that of other for ign traders such as the French, American, and even Spanish merchants, In vain did Spain attempt to reduce for- ign interests or at least slow them down. in 1841 the colonial government refused to al Jow an English company to buy the Domini. ean hacienda in Calamba, Laguna, Four years Jater a group of Spanish merchants tried to ‘monopolize the trade to and from Mindanao, And in 1860, plans were devised to wrest control of the provincial retail trade from the Chinese. These efforts, however, turned out to be dismal failures. Even the prohibition ion the foreign ownership of land was evaded, ‘And it was only late in the century that the government imposed corporate taxes so that Spain could gain, however indirectly, from the profitable European and American trade Import and export duties were also im posed, the latter being much lower than import duty rates. The average ratio of export duty to total exports ranged from less than 1 to slightly more than 2 percent from 1847 to 1860, while the ratio of import duty to {otal imports was 6.5 percent. From 1867 to 1892 the average ratio of import cuty to total imports incteased even more: from 6.9 percent in 1867 10 7.8 in 1876, 10.1 in 1882, and 14.7 in 1892. In contrast, the ratio of export duty hardly fluctuated from percent of total exports during the same period. Perhaps the only successfull measure un- dertaken by Spain was the preferential tariff itimposed on goods transported on Spanish vessels, which was less than half the rate lev- ied on goods in foreign ships. But even that ‘was circumvented by traders who reloaded goods coming from foreign vessels abroad ‘onto Spanish ships in Singapore and Hong Kong, Because of vehement protests from for- eign traders, Spain repealed the policy in 1871, only 10 reimpose it until 1891 at higher differential rates than before. In particular, higher duties were imposed on cotton, a primary British import, mainly because of pressure from Catalan cloth makers. Still, British traders tried to circumvent the tariff. Some import houses set up branches in Barcelona under their own or other names, from where they shipped their cargo to M nila either through Singapore, Hong Kong, or Saigon. The cargo would then land in Ma- nila on a Spanish vessel. Nonetheless the policy appears to have had some success Between 1883 to 1892, the value of Spanish cotton textiles imported to the Philippines rose by more than 21 times. In fact, from a share of only 1 to 6 percent of textile im ports, Spain’ share jumped to 25 percent in 1891 and further to 43 percent in 1895 Lefe Clerical staff of the importesport {fim Peele, Hubbell, «and Company. It was the forerunner ofthe present Warner, Barnes and Company, Inconporated beThis is not to say that peasants were unaf- fected by the shift to an agricultural export economy: Population growth and the trans: formation ofthe old frontiers into cultivable and undoubtedly caused changes in the ru- ral landscape. As more and more towns were Integrated into the market economy, farm- es felt the pressure to raise salable crops. and tenure patterns that characterized the old friar and other estates became a hardl- ened feature in the 19th century as new var tions of old tenure arrangements emerged. Moving from place to place Most of all, the realization that some crops for daily subsistence had now become in- stant opportunities for wealth did not make most Filipinos rich. The large majority were till subsistence farmers, a growing number fof whom depended on cash advances to sustain production. While sugar and abaca Gaused important changes in Negros and Bicolandia, respectively, lesser known changes were taking place in other parts of the colony. One such change was the con- quest of the Central Luzon frontier by mi- BFants from the Hocos region. Before the 19th century, pioneer settlers from the locos were able to establish them- THe Economy TRANSFORMED a. economic changes in the 19th century were not the same throughout the Philippines. Not all parts of the country, for example, produced cash crops, and those that did went about it at their own pace. Some areas were less affected by the eniry of European traders, while others remained completely outside the reach of merchant houses buying produce for sale abroad. selves along the coast of northwestern Luzon, But in the 19th century, llocanos began to ‘migrate to Pangasinan and Nueva Ecija, Some of the migrants were individual peddlers, but others included entire communities. Some times, a member of the family would leave ahead, look for a place to settle, and then return home to take the entire family along, Eventually, relatives and neighbors would learn of the move and also follow. Profes- sional guides soon emerged, making a busi- ress out of the trek to the frontier. At times migration was temporary. Reap- ers would move from place to place, taking advantage of varyiig rice cycles in Luzon November in tlocos and from December to April in Pangasinan and Central Luzon, But at other times it was permanent: migrants worked as either sharectoppers (kasama) or as dependent laborers (kasugpon ot “helpers within the family circle”) in farms owned by earlier settlers, some of whom were theit kin, Sharecroppers sometimes had enough capital and free time to clear other land they would later lay claim to. On the other hand, dependent laborers tended to be young, single men with little capital and big dreams cf having their own farm some day In the frontier this was not a frivolous dream, Land was readily available; whoever Opposite: Matted ‘sugar processed in Negros is pited up in ‘4 Manila warehouse. Inset: Man and boy ‘carrying palay froma + {field in tlacos Nove.cleared and worked the land could claim it. No title was necessary. All one needed were farm implements and a catabao, for which one had to save. However, for later settlers, land sometimes had to be bought from the original pioneers — usually with one carabao and an ax or a bolo. Still and all, the pros- the hasugpon-kasama arrangement gave the new settlers hope for the future. Pioneer settlements practiced communal labor like planting and harvesting. Some- times pioneers worked as tenants on the head settlerS farm..But with the commercializa- tion of crops, private individual ownership pects of work and of acquiring land through of land replaced frontier claims. Spread: The traditional farmer was dependent on carabao for carrying farm produce.Tenants and landowners Elsewhere on the island of Luzon, farmer seitlers found out that because the best lands were already titled, they had to enter into contractual arrangements with landowners to clear land for rice cultivation. Under this setup, the owner would provide credit ifthe pioneer farmer was unable to bring along his farm animals and tools. When the land was cleared, the burden of producing regular supplies of crops fell increasingly on the ten- ant borrower. If the harvest was good, the tenant would be able to redeem his debt; if not, he would end king more loans, true in areas that pro- This was especially ced cash crops Nineteenth-century Pampanga was one such example. At the start, provincial resi- dents acquired land through simple occu- pancy; eventually, when land came to be pri vately owned, titles had to be secured for it. Soon, Pampangos were buying land in nearby Tarlac, Although Pampanga had ven tured into sugar cultivation in the 1730s, the rapid expansion of sugar production took place only with the development of foreign commerce in the 1800s, Although a major rice grower, the province also came to be known as the producer of "Pampanga purple,” one of thei best sugar varieties at the ime The commercialization of agriculture changed the nature of land and ownership in the province. Before the 1820s, Pam- pango sugar landowners simply supervised the work of their tenants; but after that pe- riod, new machines were introduced into the estate. In place of the carabao-run stone rollers that crushed the cane so that the juice could harden into molasses in earthen jars, steam mills were used to grind the cane This raised the quantity and quality of sugat production, But the mix of men, draft ani- mals, and machines posed a new challenge 0 landowners. Left: Cane juice was poured into the pilon (earthen jar). The molasses escaped through a hole atthe Dottom while the crystallized sugar remained.Right: A Chinese broker in Manila Moreover, because of the profitability of sugar, landowners became entrepreneurs themselves, negotiating with middlemen in order to fetch the best price for their prod- uct. Land itself shot up in value and specu- lation in land became a subsidiary business interest of some owners. The 19th century also saw the legaliza- tion of the pacto de retroventa, a debt-pay- ‘ment scheme commonly applied by Chinese mestizos, by which they were able to acquire land from borrowers unable to pay loans within the period prescribed. Although this scheme entitled the borrower (who at the outset turned over the ttle in exchange for the loan) to buy back the land, the value of the land was often greater than the amount of the loan. also, interest rates were high. In the early part of the 19th century these contracts were made verbally; thereafter, ‘most were notarized. The contract provided a range of options for both borrower and lender. The borrower could lease his own land from the creditor ata specified rent and invest the loan in the land. At the end of the contract, he would have to repay the amount borrowed and the rent before he could re- claim the land. Alternatively, the borrower could choose not to lease the land but to in- vest the cash loan elsewhere, perhaps in other land, The creditor could then use the land for his own purpose. Upon the expiration of the contract, the borrower would pay back the loan and take back the land. Another option was for the borrower to sell the land immediately to the lender but for a larger amount, in which case the loan would become an absolute sale. If the bor- rower failed to pay the debt, the land would revert to the lender anyway. The last option ‘was for the borrower to repurchase the land with the borrowed money and then sell itoame ~ or even ata better - price. He had to do this before his loan payment fell due so that he could at least pay back the loan to the original creditor and hopefully make a profit on the second contract, The lender, fon the other hand, could lease the land to the actual borrower or to someone else, use it himself, or transfer the ttle to another in a setroventa arrangement Through the retroventa, traders and other non-owner were thus able to acquire land, another ina similar retroventa contract at the which also grew from ten to more than a thousand hectares. Chinese mestizos and the indigenous provincial elite, including Pam- pango women, were the prominent owners, though not all of them obtained land through these means, ‘Tenancy in Pampanga Land tenure patterns in Pampanga diflered from those in the frontier settlements but were by no means uniform in the province Spread: The sugar hacienda: of Florentino Hizon ‘in Pampanga, 31Spread, top: unary mansion on a sugar estate in San Fernando, Pampanga itself. Tenancy practices in Pampanga sugar estates, for example, were not the same as those in the ricelands. The sugar contract usually stipulated that the owner provide — apart from the land ~ sugar cuttings for planting, milling machines, and cash ad- vances when needed. For his part the tenant provided labor, implements, and draft ani- mals, If the tenant required more laborers, he would have to pay and feed them at his ‘own expense, Usually, however, sugar tenants did not hire workers, preferring to help each other out especially during the harvest and mill- ing seasons. The proceeds from the sale of sugar were shared by the owner and the tenant. In addition, if the owner undertook. expenses expected of the tenant, such as supplying the carabao, the cost was then de- ducted from the tenant’ share. On the other hand, since rice was produced more for lo- cal consumption than for export, rice con- tracts in Pampanga were settled in kind rather than cash, which was the mode of payment in sugar contracts, ‘As in sugar tenancy, the rice landowner provided the land and loaned seed rice for planting and subsistence, while the tenant (aparcero) supplied the labor, tools, and cara- bao. Interest rates for borrowed rice ranged from the rarely applied rate of 33 percent ~ whereby the tenant paid four cavans for every three borrowed — to the more common rate of 50 percent, which meant a payment of three cavans for every two borrowed. The rate of 100 percent interest, or two cavans. for every one borrowed, was less often used. ‘Owner and tenant each milled their own rice, often with a plain mortar and pestle, since mechanical mills came to Pampanga only in this century. ‘Another form of tenancy in Pampanga, less common than the rice and sugar types of tenancy, involved three and not only two parties. This was the leasehold contract, in which the lessee paid the owner a fixed rent and usually hited tenants to work the land on an equal share of the harvest. Unlike rice and sugar tenants who were allowed to use two or three hectares of the land, lessees could handle up to hundreds of hectaresbecause they relied on tenant labor. But whichever the arrangement, the tenancy and leasehold contracts favored the landlord who could be magnanimous and kind to his tenants or else cruel and despotic. Apart from the landlords personal treat- ment of the tenants, the whole system fostered tenant indebtedness, where the children inherited their parents’ debts and nurtured dependence on the landlord. Ten- ancy also allowed the landlord to exploit the tenants for personal services, such as house- hold work, free of charge. Furthermore, the contract allowed the landlord to manipulate the harvest-sharing scheme by playing on the fluctuating market prices of sugar. He could then share the harvest on the basis of the lowest price (despite having sold his sugar for higher) or the average price at the time, Either way the landlord stood to gain from this arrangement. The case of Nueva Ecija A slightly different situation prevailed in Nueva Ecija. Through private Spanish ini- tiatives, the interior and northern parts of the province were developed as livestock areas, so that by the latter half of the 19th century Nueva Ecija had become Manila’ major source of meat In 1889 the province boasted of 35,000 head of cattle, 38,500 carabaos, 10,000 horses, and 70,000 pigs. The Sabini prop- erty, which was the largest estate at more than. 6,000 hectares locatéd in modern-day Gaba don, had a herd of 3,000. But rinderpest de- stroyed the herds in the 1890s, and the live- stock industry was never the same again. In the 1880s the province was drawn into the trade network, shipping about half a million cavans of palay annually to Manila. The ma- jor rice areas were Gapan and Aliaga, and the main shipping towns were Cabanatuan, Gapan, and San Isidro. Chinese mestizos from Bulacan and Pampanga were attracted to Nueva Ecija and quickly acquired land through the retroventa Southwestern Nueva Ecija, on the other hand, seemed less isolated from all these ec nomic changes taking place because it had 3B ‘Spread, bottom: Farmers thresh rice Dy having their ‘earabaos stomp on the straw:Hermano Pule REYNALDO C. ILETO Acises de la Cruz, also known as Hermano Pule, was born around 1814 to relatively well-to-do peasant parents in Lucban, Tayabas. Educated in the convento, he decided at 15 to enter the monastic life. Being an indio, however, frustrated his plans of becoming a Franciscan priest. He became instead a lay brother at the San Juan de Dios Hospital, a charitable institution. He also Joined the Cofradia de San Juan de Dios, a confraternity open to indios and affiliated with the hospital. There he pursued his study of mystical Christian theology, picking up scraps of knowledge by reading or listening to church sermons. He became an accomplished lay preacher himself In 1832, Apolinario helped organize 19 provincemates who had seitled in the poor suburbs of Manila into a confraternity called Hermandad de la Archi-Cofradia del Gloriosa Senor San Jose y de la Virgen del Rosario, or Cofradia de ‘San Jose for short, There was nothing ‘unusual then about this association, Like others of the same type scattered throughout the islands, it was an offshoot of a medieval Spanish institution whose religious function was the practice of piety and the performance of works of charity 4 Sometime in 1839 or 1840 the Cofadia underwent rapid expansion in Tayabas, Laguna, and Batangas. Members became conspicuous for reserving the 19th of each, ‘month for a High Mass, which they paid for. After this high point of their ritual activity, they would hold a reunion, recite the Rosary, listen to Apolinario’ letters, and partake of a communal meal. These activities aroused the suspicion of Father Manuel Sancho, curate of Lucban. Accusing the Cofracia of heretical activities, he led a raid on one of its gatherings in October 1840. The discovery of a portrait of Apolinario done in the manner of a saint confirmed to this friar that he was contending with a rival pastor to the lock. To avoid conflict with local authorities, Apolinario sought official recognition for his Cofradia, but was continually frustrated. Eventually, the hospital dismissed Apolinario, who went into hiding to avoid arrest. Meanwhile, in Lucban and Majayjay, civil and ecclesiastical authorities joined in a witchhunt of Cofradia leaders and ‘members, who managed to flee Now considered outlaws, the cojrades regrouped at Bay, where Apolinario joined them. They made their way around the ‘western slapes of Mount San Cristobal to the barrio of Isabang. A call was made to cofrades in all regions to assemble for a rovena. Some 8,000 to 9,000 people, including women and children, trekked to sitio Aritao, where Apolinario established ' an independent commune. There they lived an “orderly and regular life. Each. worked for his maintenance without abandoning his religious ideals and duties." ‘The break with the Mother Church was not complete, however. Apolinario stil sought to enter Tayabas town and hold a novena in the parish church, but met opposition from the principales, who were alraid of looting, and the parish priest. Upon his return to Tayabas on October 22, Governor Ontega offered the Cofradiaamnesty, which was promptly spurned. ‘The following day Ortega led a force of 4300 ill-prepared constables, headmen, and lo laborers to Aritao, only to beat a “terrified retreat before a much larger force fof cofrades, Abandoned by his own men in the field, the governor was captured and killed. To the cofrades, now rebels, this was the much-awaited sign of divine blessing for their cause. ‘During this period of armed revolt, Apolinario stayed secluded in a small hhouse beside the chapel, surrounded by trusted aides, including several women. The cofrades could see him only at certain times of the day, and with great ceremony. He was called "King of the Tagalogs,” ‘which to the authorities amounted to a political threat. Although there is no ‘evidence that Apolinario ever incited the ofrades to revolt against Spain, it enced up that way, because the authorities could not y a rival “church” and priest to attract io followers away from the Spanish atholic fold. As the situation grew critical, Apolinario adie new predictions and promises. 1f ‘things started to go wrong, invisible Idiers or angels would arrive and swing € tide of battle in the Cofradia’ favor. A Take would open up and swallow ‘advancing enemy troops. The cofrades’loob Ginner being) would become as firm as the mysterious sword with which Apolinario baptized them, and they would be invulnerable to Spanish bullets. Finally, daring the bate two voices would femanate from Tayabas and be answered by ‘wo rumbles from Mount Amolog. The ‘mountain would open and the Yglesia (Church) would appear, uniting all the brethren. Manila would be inundated; the “Waters from the sea would drown all “except the cofrades, who would be rescued bya great armada. ‘The Aritao commune was eventually rounded by trooops from Manila and indio volunteers from the surrounding ‘Provinces. A second amnesty offer was spurned. On October 31, an advance party of government troops was attacked by cofrades waving a red flag, who allegedly “came to the battle dancing,” implying controlled and ritualistic movements. The government's overwhelming firepower, however, pushed the rebels back behind their palisades. Fortunately the Spanish advance was delayed by a shower of spears and arrows from the cofrades’ Aeta allies. Eventually, the palisades were breached. Spanish and indio troopers, followed by cavalry, stormed into the encampment, The cofrades defended their position house by house. Those guarding Apolinario's ‘headquarters died to a man, while their leader managed to escape. After some four hours of fighting, 300 to 500 rebels lay slaughtered (as against 11 wounded on the government side), Another 500, including, some 300 women, were taken prisoner. ‘The rest fled to the forests of Mount Banahaw, where they were not pursued. Apolinario was captured the day after, seeking refuge among ex-cofrades in Sariaya. Following a summary trial he was shot, his body cut up into pieces, and his head put in a cage and displayed atop a pole along the roadside leading to Majayjay. Friar Sancho, who witnessed the execution, reported that Apolinario “died serenely and showed unusual greatness of spirit.” On the same day, 200 prisoners, comprising most of the males, were executed. Questioned before their death about their purpose in rebelling, their answer was, “To pray”Above: Mounds of rice straw rise behind these farmers in Cavite. been devoted early on to crops of value There, under the auspices of the Spanish government, tobacco was grown, And with- out intending to, the tobacco monopoly stimulated migration within the region, Forced to raise tobacco, the farmers began to look to the Ilocano settlers for their ready supplies of rice and other staples. When the tobacco monopoly ended in the 1880s, sugar became an important crop and ‘was sent to Manila. The largest praccers were six Spanish-owned hacienda, four of these in Cabanatuan alone. Like Pampanga, Bulacan. and Pangasinan nearby, Nueva Ecija became a sugar producer, although its shipments to Manila never matched those of its neighbors. ‘The Samar economy The commercialization of agriculture in Cen- tral Luzon was not replicated everywhere in the Philippines. In Samar, for instance, ex- cept for the usual barter exchanges in rice. coconut oil, and forest products, there was not much trade in the 1860s. Rice agricul- ture was dry (kaingin) partly because of the lack of draft animals. But late in the century the economic trans- formation began to have some effect on the area. Abaca and coconut oil exports grew. These items were shipped to Manila through the ports of Catbalogan, Calbayog, and a few others, through which imported goods from Manila also passed As in other parts of the country, Chines chants played a major role in the trade. Nonetheless the Samar economy remained predominantly agricultural, although one report observed that 80 percent of cultivable land remained untouched in the late 19th century. No landed estates developed, al- though tenancy and the practice af cash ad- vances against future craps took place. Once the produce was sold, the debt had to be settled, usually by subtracting it from the sale of the crop. The lender usually had the first option to purchase the crop, thereby{ng an advantage over the peasant borrower. ‘This system of advances that invited rural indebtedness was also happening elsewhere Yer it is noteworthy that hacienda-type estates were absent in Samar. This can be at- tributed partly to the fact that growing abaca svas less demanding than growing rice or sugar. Abaca grew easily in upland areas, heeded little care, and complemented other livelthood activities such as fishing and the cultivation of rice and root crops. In 1896, the average size of landholdings in Samar was two to three hectares, Since an owner could work only 1 hectare at most, relying on the entire family for help, some landholders hired laborers or tenants to help them work the rest of the land. Inthe early 1890s, workers on abaca land were paid 17.50 pesos a year, which pay- ‘ment started only in the third year after the land had been cleared, planted, and weeded. ‘Thisamount was equivalent to about half the profit from 5 piculs of dried abaca which at the time sold at 7 pesos per picul. ‘The port towns and provinces were a stark contrast to Samar. In Cebu, land quickly ‘Spread: Birdseye view of the Tacloban waterfront in the carly 204 century.Above: Transporting sugarcane 104 market in Bulacan Spread: Sugarcane travels by riverboat in Malabon became a valuable investment as agriculture was increasingly commercialized. Sugar was planted and easily shipped to external mat= kets through Cebu. By the 1870s most of the good land was already privately owned, gen- erally by Chinese and Spanish mestizos, Spaniards, Cebuanos, and Filipinos from other provinces. These owners also obtained land in Bohol and Leyte. Relatives of rich (Cebuanos moved to other munic alities out- side the center and set themselves up in trade or on landed estates, securing credit from their wealthy relations The Tagalog economy Like Pampanga, the Tagalog region was greatly affected by the development of cash crops, and not only because of the expan- sion of foreign trade. In the late 18th cen- tury, Tagalog religious estates we already most of Manila’ erops. Also, land were prevalent in the provinces produc mortgages surrounding Manila, the frequently used pro- cedure being the pacto de retroventa. Share- cropping (Iasamaha ) arrangements were also common and appeared to have wors- ened in the 19th century. Im Bulacan, for example no tools and carabao was given on a tenant with third share of the crop. This is why it is possible to speculate that most of the ea sharecropper urists who did not have land or that the peasants of Central Lu: en the status of sharecroy much ols, and later. The ratio of the cost of tools to the value of land increased. So did the cost of draft animals. In the 18th century, a carabao cost about 8 pesos and a hectare of very good Tagalog land sold for 17 pesos. In the 19th century the carabao cost about double, and land values shot up by five to ten times. This as directly caused by the risin value of agricultural crops, which were nor- ma nthe export market. It also meant that life had become harder for the farmer even if he had his own carabao and tools. ‘grown for local consumption,The inquilinos Friar estates operated on leasehold contracts by which the inquilino paid a fixed rent to the owner and telied on the labor of share tenants, This was to be expected since the religious haciendas were large and some parts remained undeveloped. To clear these por- tions for cultivation, friar owners leased them out to inquilitos (both Chinese mestizos and Filipinos) who paid no rent in the first two to three years. After that, the inguilino paid a flat rent to the owner, depending on the pro- ductivity of the soil, Once the rent was paid, the balance was shared between the inguilino and the tenants, Tenant earnings were reduced by one or two layers of nonproduetive rent collectors above them. A marked disparity soon devel oped between the inuilino and the share cropper, as their lifestyles made clear. Ingui linos typically lived in the town, rather thanRight: Threshing rice by beating it against on the hacienda, in “very fine houses.” They were so active “in a very lucrative commerce” that land rents made up the smallest portion oftheir income. In contrast, the kasamahanes were “poor, unfortunate people” who, said one Spanish account, were “difficult to trust, because they would leave without paying the rent at the fst opportunity.” In fact, tenants were known to have sold and mortgaged land as if they owned it Those who purchased the right to use the land either tilled it themselves or sublet it to other share tenants, The series of subtenancy arrangements thus made land tenure arrange- ments highly complex and, for those at the bottom rung, extremely difficult, The degree of subtenancy also varied from place to place, with areas such as Tondo exhibiting this phe- nomenon earlier than the rest. There were also cases of inquilinos evicted from the land for their failure to pay rent But the kasamahan was not necessarily spared from the inguilino’s default on the rent, be- cause at times his share of the crop, or his animals and tools, were attached to the inquilino’s payment Land sizes and population growth The growth of tenancy went hand-in-hand with the expansion of land sizes. A sample survey of rice and sugar holdings in Bian, Laguna in 1890 showed that there were more owners of small- and medium-sized lands (from less than 1 up to 20 hectares, respec- tively) and fewer owners of lands ranging in size from 20 to 150 hectares. ‘The same trend applied to other parts of Laguna and Bataan. Apart from the religious orders, the owners were Chinese mestizos and native principates as denoted by the ttle “Don” before their names in the land re tries. Patterns of land tenure were also shaped by the demands of population growth. With the increase in the population and the clos- ing of the frontier, the surplus in land was supplanted by a labor surplus that had to be fed, clothed, and housed. The number of persons per hectare of cultivated riceland, or nutritional density, gives an idea of how well, or badly, rural households lived, espe- cially if their main source of livelihood wassubsistence agriculture, as in the Tagalog provinces. The nutritional density of estates in Binian deteriorated from 2.6 in 1800 to 5,7 in 1852, which might not have gone so padly had methods of production (includ- ing machinery) been improved “The sugar haciendas in Laguna, particu larly the Dominican estates in Binan, Santa Rosa, and Calamba, were the most striking examples of commercialized agriculture. In the early 1800s the lands were still hardly populated; in fact, the Hacienda of Calamba in 1835 had only 48 tenants and its revenue from sugar amounted to only several bun: dred pesos. But by 1895 its sugar income had grown to more than 40,000 pesos. After 1891 (when the family of Rizal and other inquilinos were evicted from the hacienda), the new Spanish tenants brought in steam powered mills, The result was a dramatic increase in sugar production that made the Dominican estate one of the largest producers in 1896. Social tensions in the hacienda were not a 19th-century development. Indeed, the 1745 attacks against the religious estates in Cavite 4 Spread: Hauling sugarcane with a caterpillar engine in Calamba, Lagunape ge ee 2 Right: The palatial home of a well-to-do ‘Manila merchant Oppasite: Loads of earthenware pots for cooking make their way o the market. and Bulacan count among the better known agrarian revolts in the Philippines. Although no similar uprisings happened again until the revolution against Spain, rural unease con- tinued to persist In the late 1890s, the religious orders be- gan to incorporate their large and heavily populated haciendas. The Dominicans, for example, called theirs the Philippine Sugar Fstates Development Corporation and in- stalled foreign directors on the board. After the government allowed foreigners to buy land, the Augustinians sold their estate in Pasig to Warner, Barnes, and Company, a British firm. These developments began to raise fears of displacement on the part of the tenants. Were it not for the outbreak off the Philippine revolution, more such moves by hacienda owners would likely have been taken. The transition to an agricultural export economy took a heavy toll on the farming, population. The system of cash advances against unproduced crops strengthened the position of creditors, both Chinese and na- tive, and expanded their influence into areas newly drawn into the market economy. If only the loans were used for the improve- ‘ment of production and refinery methods, they could have contributed significantly to the transformation of the economy. But most loans were used either as seed capital to clear forests or to maintain subsistence, since land yields went to tribute collected by the government and to rent payments to the owner of to the inquilino’ share. Given the low income and the subsistence standard of living, it was not possible to generate an in- ternal marker despite the cash value of crops. Social levels more defined Significantly, the different social levels be- came more tigid over time. Labor and rent became sources of the landowners’ wealth, and while land remained a valued inv ment, improvements on it were not seriously undertaken by landlords, Both labor and rent were reckoned either in terms of cash or ag- ricultural produce, ora combination of bothy depending on whether the produce was fdr a local or an outside market Peasants became dependent on persons who did not live on the estate, had no real interest in better farming techniques, and were removed several times from them by layers of rent collectors. By the close of the century, three social classes had taken shape: the landed class (called “cacique” in Central Luzon); a middle class of fairly well-off ten- ants, merchants, and white collar workers; and landless peasants who included share- croppers, poor tenants, and seasonal agri- cultural workers,