PRESIDENT HOOVER in vainly vetoing the Philippine Independence Bill on January 13 uttered a forceful warning that once the stabilizing and protecting power of the United States is withdrawn from the Philippine Islands they cannot long remain outside the conflict of tremendous forces now contending for physical and spiritual mastery in the Far East. He also reminded Congress that this archipelago, for a generation a dependency of the United States, cannot by mere legislative fiat be summarily removed from the sphere of American interests and responsibility. Mr. Hoover's grave warning directs attention to the fact that the Islands have already become an area of keen competition between China and Japan, and suggests that American withdrawal might bring them, and consequently the United States, into the very vortex of the storm now raging in the Orient.

I. THE CHINESE IN THE ISLANDS

Probably 125,000 alien Chinese are now resident in the Philippine Islands, while at least 750,000 of the most prosperous and influential Filipinos are in part of Chinese blood. Through more than four centuries the Chinese element, ceaselessly renewed by immigration from the mainland, has maintained its peculiar national characteristics and performed its indispensable economic functions. Highly organized, closely connected with their countrymen at home, and possessed of the personal characteristics that bring material success, the Chinese long ago wrested the bulk of the business of the Philippines from the Filipinos and all other competitors. They now conduct between 70 and 80 percent of the retail trade and a large proportion of the other internal commerce of the Islands. During recent years their power and numbers have been rapidly increasing.

The commercial and credit system of these Philippine Chinese covers virtually every business in the Philippines and reaches from Manila to the remotest island. Three-quarters of the commercial credit facilities of the country are in their hands. In the great rice regions the Chinese finance the production of this basic food crop and almost completely control the milling and distribution of it. Throughout the Islands the retail lumber trade is almost entirely carried on by them, and they cut and mill nearly 40 percent of the timber annually put on the market. They dominate many handicrafts and have an important stake in automobile transportation. A year ago it was discovered that Chinese-owned vessels were participating in the inter-island trade under fraudulent Philippine registry. Three Chinese steamship companies maintain a regular service between Manila and Amoy. In the rich, undeveloped island of Mindanao and in other frontier territory the Chinese have always been the commercial pioneers, and they are now beginning to participate in the agricultural exploitation of some of these areas. The total Chinese investment in the Philippines is estimated at more than $100,000,000, or about half of the American investment in all of China.

The remarkable accomplishments of the Chinese in the Philippines are the result of private initiative and in the main have served social and economic rather than political ends. But though these achievements have not had material assistance from the Chinese Government, the presence of so large a group of energetic aliens has inevitably given rise to serious problems in the Philippines. Chiefly because of their dominant economic position, the local Chinese as a class are disliked by the Malayan masses in many parts of the country. Throughout history they have been subject to occasional attack and spoliation by Filipino mobs, and for this and other reasons constitute a serious danger to law and order. From time immemorial, too, they have been exploited by governmental officials, and have sought to defend themselves against this type of abuse by the use of money. Legislation concerning them has recently become an important issue in domestic politics and has aroused serious resentment in China. Thus far, foreign authorities have protected the Philippines from mass Chinese immigration. This protection has become increasingly ineffective, however, in part because the local administration of the American Chinese exclusion law is inefficient and corrupt, in part because conditions in China have increased the pressure for entrance into these nearby islands of comparative security and opportunity. What will happen when the Filipinos have to stand entirely on their own feet in this matter? One final consideration: unassimilable in the first generation, controlling three-quarters of the business of the country, yet having no direct voice in government or any responsibility for it, the Chinese unquestionably add to the difficulty of developing a successful Philippine democracy.

Within the past few years the Filipinos have become increasingly concerned over the problems arising out of the position of the Chinese in their country. One of their most able officials recently told his people precisely what they must do if they wish to reduce the power of these alien economic masters. "We should learn to do the work of the Chinaman if we propose to take his place," he declared. This achievement, he added, would require a new attitude toward life, "the overhauling of our national psychology." Evidently, however, he realizes that the psychology of a nation cannot easily be overhauled, for he proposed that instead of seeking to eliminate the Chinese the Filipinos should endeavor to "enter into partnership with Chinese capital and talent in the development of our resources, commerce and industry."

Natural forces would make easy the formation of such a partnership between these two neighboring peoples. Indeed, in the event of the early withdrawal of the United States from the Philippines the consummation of that partnership could be prevented only by the intervention of some other powerful nation. And once the partnership had been formed, the same natural forces would inevitably determine which race would become the senior partner and, eventually, the sole member of the firm.

II. THE JAPANESE IN THE ISLANDS

Like the Chinese, the Japanese played an important part in the pre-Spanish and early Spanish life of the Philippines. Fifty years after the founding of Manila it was reported that some 3,000 of them were resident in that city alone, and it is probable that their subsequent disappearance from the Islands was due to their government's isolationist policy rather than to any inability or unwillingness on their part to live away from home and in the tropics. After the Mikado's empire had again been opened to world intercourse, Japanese gradually reappeared in the Philippines. Since 1900 they have come in more rapidly, and it is estimated that there are now some 19,000 in the Islands, 12,000 of them concentrated in the province of Davao. Unlike the Chinese, the Japanese have brought many women with them and have not intermarried freely with the Filipinos. For this reason and because their reappearance in the Archipelago is comparatively recent there is no considerable group of Japanese-Filipino mestizos in the local population.

In further contrast with the Chinese, the majority of the Japanese in the Philippines have always been artisans, agriculturalists and fishermen rather than merchants. The minority engaged in commercial pursuits has increased within recent years, however, and the rate of increase has been accelerated since 1931 by Japanese efforts to overcome the boycott of their goods by the Chinese middlemen through whom most of the imports from Japan have always been sold to the ultimate Filipino consumer. Although Japan's Philippine trade is not large compared with her total commerce, her economic situation is such that it is not without importance to her. Furthermore, it is steadily increasing, and as the Philippine Islands are capable of supporting a population of from 40 to 50 millions it is of great potential value. In the event of the termination of free trade between the Islands and the United States, it is natural to suppose that Japan would make a determined and successful effort to capture a larger and larger proportion of this market lying at her door. Such a policy would mean a considerable further increase in the Japanese commercial population of the Islands and in Japanese business investments there.

It is not as merchants but as fishermen, however, that the Japanese residents of the Philippines have come into the most direct and acute competition with the native population. Just as the Chinese control the distribution of rice in the Islands, the Japanese have become a powerful factor in the supply of fish, the second staple food of the Filipino people. They have attained this position through possessing a virtual monopoly of deep sea fishing and the use of modern fishing methods in Philippine waters. Thus far the Filipinos have failed to substitute these methods for the inshore traps, nets and lines of their ancestors.

The recent rapid expansion of the Japanese fishing industry has led to a popular demand that the Japanese be curbed by law before they completely dominate the supply of this essential food. In 1930 a bill designed to accomplish this purpose was vetoed by the Governor-General, chiefly on the ground that it was so carelessly drawn that it expressed exactly the opposite from the legislative intent. Japan's attitude towards any governmental action involving the elimination of her citizens from a business which they have developed without interference over a period of 28 years was officially expressed at that time in a letter in which the Japanese Consul-General in Manila urged Governor-General Davis to veto the bill "in the cause of the existing cordial relations between Japan and the Philippines." Since then feeling over this very delicate situation has increased on both sides. Among the Filipinos it has been heightened by the occurrence of incidents in which the crews of vessels from Japan defied Philippine authorities when apprehended in illegal fishing and lumbering operations in the northern waters and islands of the Archipelago. Referring to these incidents, the Tribune, a leading Filipino newspaper, declared editorially that "this incursion into Philippine territory by the Japanese portends for the future consequences of national import. Not the events of today, but the probable events of tomorrow fill the minds of the Filipinos with apprehension. The shadow has been thrown on our portals."

But of all the activities of the Japanese in the Philippines the great agricultural colony which they have established in Davao is the most spectacular and probably the most significant. In 1904 about a hundred Japanese laborers who had been thrown out of employment by the completion of the Baguio road in northern Luzon were brought to this province at the southeastern corner of Mindanao to work on the hemp plantations of a group of hardy American pioneers. Today there are some 12,000 Japanese in Davao and they have been chiefly instrumental in turning a wilderness into the most important hemp producing center in the world. The early Americans were replaced as the dominant group in the province because they received neither new blood nor new capital from home.

The Japanese pioneers in Davao are closely organized, amply supported, and ably directed. In the selection of immigrants, the transportation of them to the colony and their placement on the land, the collective welfare of the group is guarded by close coöperation between the private interests concerned and the Japanese Government. The organized Japanese community provides its people in Davao with excellent hospital facilities, schools, recreation centers, legal services, and aid in time of trouble. It also gives them financial backing and technical assistance in solving their problems as planters. At every step the Japanese Government continues its support and assistance through a capable consul and scientifically trained agricultural experts. Two Japanese steamship lines maintain a weekly service between Davao and the homeland.

Although some of the Filipino settlers in Davao are genuine pioneers whose courage and industry would be creditable in any people, many more, especially those sent down by the Philippine Government, are unfitted by experience and temperament for life in a new country. In either case they almost entirely lack capital or financial backing, organization, leadership, or the spirit of mutual coöperation. In recent years they have been exploited by a local government that is inefficient and often grossly corrupt. In these circumstances it is not surprising that the vast majority of the Filipino settlers who are able to acquire homesteads in the hemp districts lease their property to Japanese, who, as aliens, cannot acquire or lease public land in the Philippines.

In his 1930 annual message to the Philippine Legislature, Governor-General Davis referred to Mindanao as a "Land of Promises -- unfulfilled. A treasure-house of national wealth -- with the door kept carefully locked." A year later he added: "The promises are slowly being fulfilled, the door unlocked -- but not by us." Modern Davao is, indeed, primarily a Japanese achievement. In this great frontier region the Japanese have caught the torch of progress from the hands of the unsupported American pioneers. If they have created a "little Japan" in Mindanao, they have done it by means within the law and by methods that have benefited all settlers in the region. But the Filipinos look on the accomplishment with growing apprehension.

Davao would seem to raise serious doubts as to the validity of the conclusion, based chiefly upon experience in Formosa, that the Japanese are not successful tropical colonizers. The facts are that the Japanese colonists in this southern Philippine province have been highly successful, but that their success has been attained in an undeveloped territory from which the competition of Chinese agriculturalists has been artificially (politically) excluded. The implication of these facts seems obvious.

III. CONCLUSION

The Philippine Archipelago contains vast unutilized riches of soil, mines, forests and sea. The Filipino people, protected in an area that would support four or five times its present population, lack the capital, the character, or the numbers to develop their magnificent domain rapidly. It lies within easy reach of the crowded territories of two needy, powerful and desperately competing neighbors. Should the United States withdraw within the next few years, the new-born Philippine Republic would be a feeble state and its future would be most uncertain. Each of the two great Oriental powers would almost inevitably be impelled to protect its existing and future interests there against both internal disturbance and the encroachment of its rival. Each has its own effective methods of economic penetration, and the conflict between them already involves most of eastern Asia and its appurtenant islands from Siberia to India.

One of these competing nations has repeatedly demonstrated that it does not lack the will to use its military power, now supreme in the Orient, in support of its national policy. The other is adept with the experience of centuries in other methods of warfare and is more politically minded and physically powerful than ever before. The Filipinos themselves, helpless though they would be, would hardly stand by and unresistingly allow their land to pass into the hands of any other nation, whether by peaceful methods or by war. A generation ago, with scant organization, few arms, and no tradition of unified spirit or action, this people for two years fought the United States in the name of liberty. Finally, the Philippine Archipelago occupies a strategic relationship to the southern and eastern flanks of Japan and China which is comparable with that of Manchuria to the north and west. In any major struggle between Oriental and Occidental powers an independent Philippines would be in a position comparable with that of Belgium in August 1914.

To carry the Philippine Bill into effect under present circumstances may well produce internal chaos and international strife in the one Far Eastern area within which American responsibility is the most direct and inescapable. For the United States to follow such a course while vigorously asserting that it will protect its individual interests and meet its general obligations towards world peace in the Orient would be to pursue a policy of divided counsels, impotence and futility. The Philippine problem may have been transferred by Congress to a broader and more perilous field. It has not been solved.

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