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Bill on January 13 uttered a forceful warning that once the stabilizing and protecting power of the United States is withdrawn from the Philippine Islands they cannot long remain outside the conflict of tremendous forces now contending for physical and spiritual mastery in the Far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
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