Frontiers, 1836-1920 I. The years from 1839 to 1920 constitute a distinct era in the history of Philippine sugar industry.

Why distinct?
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There was enormous expansion in the export and cultivation of sugar. Sugar society became firmly linked to the world market economy and responsive to its fluctuations. As never before, sugar developed into a separate, wealthy sector of the native economy, unique in the high degree of foreign participation. Sugar regions served as models of a cash-crop society (a cash crop is a crop which is grown for money. The term "cash crop" is used to differentiate from subsistence crops, which are those fed to the producer's own livestock or grown as food for the producer's family.) o The leaders of sugar regions became influential persons in the colonial order of Spanish and American regimes Sugar growers transformed the Philippine countryside from deep jungle into extensive sugar haciendas, specifically major portions of western Negros and northern Pampanga. o However, Negros and Pampanga developed along dissimilar lines in terms of socioeconomic structures.

Expansion of Sugar Trade II. The expansion of sugar trade in the Philippines during 1836-1940 was entwined with foreign markets and foreigners.
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The world economy supplied an ever-increasing demand for sugar. Outsiders supplied the sugar industry with credit and technology. o In the earlier era, Filipino made their contribution to the sugar business in the cultivation sector, although Negros became responsible for the processing as well. o Until near the end of the period, Kapampangan continued to depend on foreigners for the last step of their manufacturing, and the division of labour throughout the industry between those who did the overseas marketing and those who produced sugar persisted during the time of expanding frontiers. Some facts Between 1836 and 1916, sugar exports rose some 2.135 percent, from 15,097 metric tons in the former year to 337,490 in the latter. By 1836, sugar had achieved first place on the list of exports; it continued to vie with abaca for that position throughout the rest of the nineteenth century. What was the impetus to this dramatic transformation?

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III.

There was an enormous heightening in the demand for sugar that started even before the mid-nineteenth century, especially among industrial nations.
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Sugar consumption in Great Britain rose from an annual average of 16.4 pounds per capita in the years 1840 to 1844 to 90.8 in the five years from 1910 to 1914. There was an annual rise per capita in the United States that went from 14.1 pounds in 1835 to 86 in 1920.

Only during periods of major war did the rates dip in either country. from increase in demand, there was also population growth. US, population multiplied from 17 million in 1840 to 125 million in 1920 Great Britain, population multiplied from 19 million in 1841 to 42 million in 1921. Although Philippines remained only one of many suppliers, exploding world demand guaranteed the islands a bigger export market each year.
o Aside o o

IV.

The destination of Philippine sugar exports varied considerable over the period, reflecting changing realities in world market conditions.
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The US purchased consistently. Great Britain bought more in the nineteenth century o This is contentious because the sugar originally consigned to Great Britain ended up in American East Coast refineries. Australia, which was a significant outlet at the advent of era, faded after 1870s as it began to acquire more sugar from other sources and to develop its own cane industry. In the 1880s and continuing through the rest of the period, China and Japan became big buyers, taking up the slack as European purchases waned. Spain remained a limited consumer for its most far-flung colony, buying relatively small amounts of the very best grades of sugar available. o More aggressive buying practices by British and American merchants in the Philippines partially account for this Spanish weakness. o More importantly, Spain had other suppliers closer to home, in the Caribbean and Europe. California, which early promised to be a large market, eventually came to depend on Hawaiis rising export as its chief source. Foreign trading firms possessed with commercial intelligence

V.

The complexity of shifting world markets created a need for good, current commercial intelligence which foreign trading firms provided.
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British and American trading firms dominated and possessed expertise, contacts, finances, and facilities. o Ker and Company o Smith, Bell and Company o Warner, Barnes and Company o Russell, Sturgis and Company o Peele, Hubbell and Company Throughout the nineteenth century, they controlled the export trade although the Spaniards tried through tariff legislation to end that stranglehold in the 1880s and 1890s. o Spains effort came too late and the only change in leadership in the trade arose from the role of Philippine Chinese exporters during the last decade of the nineteenth century. o British, American and Chinese firms maintained their dominance of that trade into the twentieth century as well. Events that led to the short-term fluctuations in the sugar export industry

In the 1840s the decline of West Indian production resulting from prohibition of slavery stimulated British demand for Philippine sugar.

Sharp rises in the 1850s and the early 1860s followed upon temporary curtailment of alternate sources of greater military need associated with the Crimean war (The war arose from the conflict of great powers in the Middle East and was more directly caused by Russian demands to exercise protection over the Orthodox subjects of the Ottoman sultan.)and then with the American civil war. o Limitations of American cane production, especially in Louisiana, favoured increased use if Philippine sugar by the East Coast refiners. Beet sugar industry, which expanded in Europe and US, offered a new competition for cane. o Germany, Russia, Austria-Hungary and France planted beets between 1850 and 1900. o California, Michigan and Ohio did the same thing. o To stimulate these industries, countries on the Continent legislated bounty systems rewarding local production of export sugar. These flooded the English and American markets with cheap, high-grade sugar. o The McKinley Tariff Bill included two cents per pound rebate on homegrown US sugar. o The Dingley Tariff raised duties on imported sugar at a time when world prices were low. In the 1840s world sugar prices dropped because of diminished processing costs. o In the 1880s, prices fell by almost half. o The bounty system represented one early factor accounting for low rates, but oversupply affected it too: too much cane and beet sugar combined. o Manila prices did not fluctuate, but the amount of sugar exported leveled off as the English trade permanently declined.  Only the active role of Chinese traders and the China and Japan markets for muscovado (unrefined brows sugar with strong molasses flavour) maintained Philippine exports at their previous levels.  The Asian trade, especially that of China, demanded mostly the lower grades of muscovado at cheaper prices and did not compensate for the lost Western markets. The Philippine revolution further caused diminution of suagr exports, as disruptions at the port of Manila and combat in central Luzon curtailed deliveries from that northern island. o Port facilities in Manila closed. o Philippiness only refinery at Malabon shut down. o In the south, hostilities proved far less costly, especially in Negros. o Shipments through Iloilo and Cebu dropped only modestly through the period. Declining exports in the early years of American occupation had several causes. o Disastrous outbreak of the cattle disease rinderpest that killed 80% of the carabao. Nearly one third of the carabao in Pampanga and one quarter of those in Tarlac died. o The disease arrived came from French Indo-China. o There was an outbreak of human cholera. o Severe droughts and locust infestations added to the miseries of industry. There was a shortage of good outlets as well. o Competition against Java for the China market. o Japan obtained its sugar from Formosa. o Englsih market never returned.
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The Dingley Tariff inhibited US sales in spite of the fact that the Philippines received a 25 percent reduction in duty after 1903. Lessening of the Cuban duty by 20% coupled with cheaper cost of transportation from Cuba plus free entry of Hawaiian and Puerto Rican sugar kept the Philippines at a competitive disadvantage on the American market. Weak markets prevented recovery in central Luzon. Several old sources of credit had dried up. The two American firms that supplied cash and machinery had gone bankrupt. The large British lender faced deep financial trouble because if its inability to sell its overstock of sugar in New York. Lack of these led to the creation of the Agricultural Bank. However, the bank made few loans to farmers, because they lacked the good, clear land titles acceptable as collateral.

VI.

Philippine sugar producers focused on the need to garner tariff concessions on the American market. y William H. Taft, the first head of the Philippine Commission and later president of the US, plus the efforts of other lobbyists for the Philippines pushed for import privileges which proved to be successful o Payne-Aldrich Bill of 1909 Philippines received a 300,000-ton duty-free share of the US sugar market. o Underwood-Simmons Bill, weight limitation was dropped. o Despite all these, Philippines still competed with Cuba, Puerto Rico, and Hawaii. Quality gap: from low-grade sugar to a higher degree of purity

VII.

The world market demanded a higher degree of purity of sugar. y Charles Howard invented the steam-heated vacuum pan that boiled suagr syrup more efficiently and quickly at a lower temperature. y Invention of the centrifugal separator, a steam-driven cylinder that removed molasses from crystal sugar cleanly and rapidly, followed. y By the late 19th century, Java, Hawaii and Cuba were already using these innovations. (cost was high) y The Philippines remained the last major world producer of cane sugar without centrals. o Philippines used steam,-driven metal grinders; hornoseconomicos (burned ground cane refuse as fuel) and batteries of open kettles. The first two used in tandem produced more efficient extraction rates of juice from cane; the latter improved the polarization of mat sugar. y By the latter part of century, Negros turned out a good sugar with an 85 average polarization (degree of sucrose content) that compared favorable with the pilon sugar of Pampanga; neither kind matched the 96 of centrifugal sugar. y The introduction of cheaper equipment was undertaken by Loney and Gaston on Negros and de la Gironiere, Delaunay and Vidie on Luzon. y The big trading houses supplied machinery and financed its purchase when native planters followed the lead of those innovators. y The refinerys operation at Malabon was limited in size by the circumscribed market for fully refined sugar. y For the most part, Philippine growers did not even care to invest in between farming techniques to improve their profits, and the Philippines possessed the lowest yield per hectare of all the major sugar-producing regions of the world. .

o Not until well into the twentieth century did planters begin to fertilize their fields, rotate and irrigate their crops, and select the best cane for planting.

VIII.

Sugar depression The major casualty of sugar depression of the early twentieth century was the pilon industry of central Luzon and of Pampanga. y Pampangan farmers damaged themselves by lacing their sugar with molasses. y They became more dependent on the Manila fardarias to raise the quality of their product. y Annual exports from Manila to North America and England began to drop drastically, while Iloilo shipments of Visayan mat to those destinations continued to rise. In the next ten years, Pampanga began to move away from pilon when some planters switched to making mat sugar by hiring sugar maestrillos expert in the Visayan boiling technique. y Other farmers commenced sending their cane to the newly erected central at Canlubang, Laguna, despite the serious loss of sucrose content caused by the delay between harvesting and grinding. Obstacles in establishing Philippine centrals
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IX.

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Problem of cane supply. Large, modern mills required that ample stocks of sugar cane be delivered throughout the milling season, and most centrals in other countries possessed guaranteed stocks through ironclad lease arrangements or through ownership of the surrounding fields. In the Philippines, acquisitition of large tracts of public land was illegal, and there were insufficient private estates for purchase or lease. Participants in the Philippine sugar industry generally lacked the resources and incentives to purchase expensive factories. Local lending institutions could not supply money for equipment. Private families feared making big investments on their own. Lack of expertise became a bigger problem. Solving the problem of cane supply Allowing corporations to bypass the Public Land Act 1902 (which prohibited granting f public lands greater than 16 hectares to individuals and 1,024 hectares to corporation) and to buy extensive tracts of land formerly owned by the religious orders. With the aid of Philippine Commissioner Worcester, 18,000 hectares of unused friar land in Mindoro was bought. A sugar central was erected thereafter. o The project failed because of malaria and inadequate work force. However, this set a precedent a central capable of milling 1500 tons of cane daily. California interests under Ehrman and the Pacific Commercial Company acquired 8,000 hectares of Calamba and Binan estates in Laguna and used these for erecting a large central at Canlubang. o The enterprised flourished that another central was put up in Del Carmen, Pampanga. The real answer to the problem was the establishment of San Carlos Milling Company.

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Solving the difficulty of financing centrals Large infusions of foreign capital, mainly American At Canlubang, California interests came to the fore, and with Pasumil, the Spreckels West Coast refining interests joined Ehrman in supplying capital

Negros Occidental: The Formation of a Plantation Society X. The peopling and exploitation of the western Negros wilderness was much like the developments happening on the global frontier y Between 1845-1918, annual production of sugar increased while population rose by more than 1.021 percent y Haciendas grew from jungles, and amidst these haciendas, permanent towns rose y Migrants from depressed areas such as Bohol, Cebu and Antique moved to Negros, established homesteads and grew rice and corn. Many were absorbed into haciendas. Factors that initiated Developments in Negros Negros did not begin to attract large numbers of hacienderos because of here reasons: o the threat of Moro coastal raiders, before they were defeated in 1857; o Negros reputation as lacking social and physical amenities (but the Recollect friars practice of religious control and the subsequent economic developments have addressed these concerns); o and the lack of necessity to develop Negros (the arrival of British cotton in the 1850s compromised the native cloth industry, Chinese mestizo merchants looked to the increasing demand for sugar as an alternative business) British Vice-Consul Loney also initiated developments through o New British milling equipment o Provision of low-interest rate for payment o Construction of better port facilities o He established his own export-import company in 1860 and acquired a hacienda o Took cash loans from an American firm, initiating more firms to enter sugar business, which encouraged growth of business in Negros o These firms became the biggest suppliers of imported goods and machinery, as well as credit to planters Iloilo opened to international commerce in 1855, allowing exporters to bypass Manila and reducing shipping costs. Iloilo became main port for Negros Expanding world demand from made 1850-1860 the time of greatest intrusion of Negros into sugar industry The Negros Planters Entrepreneurs fell into two categories: actual settlers and speculators (who acquired estates through other means, legal or illegal.) Chinese merchants, Filipino revolutionaries, and Spanish mestizos composed the entrepreneurs. People usually moved to areas where they had pre-existing contacts. A few rich families became composed most of the Negros plantation elite Plantation Lands

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Land was usually along rivers or streams, rice fields, or unused property of local officials, although some were established in the jungles. Negros mostly grew out of edges of prior settlements New haciendas and towns were devoid of amenities found in outside world, and there were many health risks such as malaria involved. The matter of titling lands was informal given the absence of government surveys, records, land offices Purchase agreements involved drawings and descriptions, no exact specifications outlining property. Lot size was described by how much seedlings it took to fill the land. Acts of buying and selling became a form of land recognition/ownership when government introduced land registration Legitimation for Acquisition of Large Agricultural Lands Began in mid -1870s, when Spanish government made a system for distributing unoccupied public lands belonging to the crown (realangas) Petitioners could purchase lands or claim them with proof of prior cultivation (denuncia) Lands offered at very low prices accrued wealth for those who purchased them US Regime sought to follow the American ideal of small land for farmers. Homestead Act of 1902 granted maximum of 16 hectares of public land per individual, which was not very generous compared to before Actual registering of land in Negros was problematic. There was no functioning land office, and the process of surveying and establishing clear titles for lands proved to be cumbersome. Few owners had titles before 20th century Americans introduced Torrens title, but this was still troublesome because owners wanted to avoid tax extortion on registered lands. The government instituted system to force everyone to register (survey, lawsuits, etc) Negros occidental was one of first few surveyed, and by 1922, titles for most of the public lands were settled by litigation In the process, planters evicted farmers (original inhabitants) through various nefarious ways(land grabbing, usurpation): o Falsified documents obtained through friends and relatives in office o Violence Confronted with these pressures, peasant farmers were forced to return to the wilderness or work under the land-grabbing hacienderos Plight of aboriginal inhabitants was worse, they had no formal titles and so all their lands became public. To resist the government meant extermination. They escaped into the interior mountains to practice their ways and avoid being part of the plantation workforce The Plantation Business Investing in working plantations became a way to enter the sugar industry Other forms of business such as credit, transportation of sugar to markets, and sugar brokerage cropped up American firms provided loans to planters. Lenders preferred land as collateral, and mortgages usually went on large properties valued in thousands of pesos. Notarial data shows that there were few foreclosures, reflecting the high reliability on the part of mortgages. Creation of Agricultural Bank of the Phil Islands, and its successor, PNB in 1916 gave planters access to credit on more favorable terms. Government-

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sponsored lending institutions gave larger loans on less interest, but this only partially alleviated the credit problem because they did not have enough funds and they demanded a Torrens title. Credit supply persisted as a lucrative business activity. Influential families with capital conducted business from Iloilo while hacienderos in Negros depended on loans from these wealthier businessmen. Lenders profited from hard times, and could invest in promising times. Within the planter class, considerable differentiations in wealth existed and the gap steadily grew wider.

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Haciendas Haciendas were at the heart of economic and social life in Negros Occidental. Census used these as units of enumeration (together with barrios). Haciendas varied in size, from a few to several hundred. Lack of transportation made haciendas into isolated, self-contained communities, developments of roads have been initiated but until today, many haciendas are hard to reach Absentee ownership became a common practice in Negros. Each hacienda had a planter in charge, a leaseholder, or an administrator. There were various lease holding options: o Straight cash rentals: least favored choice,provided tenants with least protection against fluctuating prices o Acsa or agsador system-((lease managmenet) offered many protections not available under cash tenant system. Acsas leased particular portions of haciendas, supervising laborers and delivering cane to the mills. He shared his produce with the owner. Acsas act as planters, taking complete responsibility. The most common system of sugar farming was the management of salaried workers. o Administrator kept the books, oversaw machine shop, took care of the tools, machines, and oversaw foremen, who were in charge of sometimes hundreds of permanent employees ho tilled fields, operated mills. There was a huge social and economic gap between the hacendero families and their workers (wealth, education, mobility,, wider economicopportunity for the former) Workers in hacienda: o Encargados: estate supervisor-oversees everything (clerical, logistical, managerial matters) o Cabos- carried out encargados orders o Maestrillos- supervised crystallization of muscovado sugar. o Machinists o Clerks o Bulk consisted of semi-skilled workers, as young as six to advanced age, who maintained fields, looked after carabaos (Dumaan). They lived in Nipa houses and worked all year round, receiving very little pay. Dumaan usually purchase necessities from stores set up by haciendas, the interest charges of which even generate debt for them. These subsistence workers were so tied to the hacienda that sales not only included estates, buildings, machinery, and crops but also the Dumaan labor force. There was originally no work force available, so haciendas had to import laborers, hire aboriginals and peasants. Workers usually lived and worked in haciendas for life.

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Judicial officers and executive suthorities were usually taken from hacienderos, and so legal controls favored haciendas. Workers remained in haciendas because of debt and lack of alternatives, but also because of force exerted upon them by planters. Two codes of law existed in Negros: one for workers and one for planters. Planters used guns and intimidation to subdue workers, and the latter seldom escape from this oppressive system. Absence of societal and governmental restraints in a climate of unfettered capitalism permitted the lavish expenditure of resources, land-grabbing, and abuse of labor to go unquestioned.

Pampanga: The Formation of a Tenant Society XI. Sugar cultivation moved to dryer, higher ground. Wherever sugar cultivation was possible, the Capampangans took up the endeavor. Pampanga did not have the same changes as Negros as a result of the upturn in the sugar industry. The population did not grow at a substantial rate, and the number of towns did not change. In places where sugar factored in though, Pampanga experienced population shifts. The opening of the Pampanga portion of the Manila-Dagupanrailroad gave direct access to the port city for sugar. The developments from jungles to plantations were similar to Negros, but one striking difference is that Pampangas growth was under an indigenous elite. Capampangan planters had grown cane and produced sugar for a long time. This indigenous elite was subsequently infilitrated by Chinese, Spanish mestizos. Consequences of Settlement Pattern Pampangan elite were bound by common ethnic tie, relied more on pacto de retro for capital (rather than outside sources)- pacto de retro, between rich and poor, may be used to acquire land, but between equals, it could serve to raise cash for additional agricultural and commercial endeavors. This opened up many options to both buyer and seller. Farmers tended to have scattered holdings rather than big haciendas. The tendency among landowners is to sire large families and the prevalent system of equal inheritance among children altered the size of the lands owned. Owners usually owned both rice and sugar plantations, to cope with changing sugar markets. Capampangans transferred their traditional labor system to newly tamed lands. Farmers rarely profited and they seldom were able to better their socio-economic condition. Pampangenos carried with them old forms of sugar farming. Negros grew production 751 times, compared to Pampangas 5.8 times. Negros was more responsive to public demands. Pampanga Sugar upturn changed Pampanga in many ways- the landowning class became more business-oriented regarding farming, it brought prosperity amidst economic depression in other places, and it widened the socio-economic gap between rich and poor. Landed elites chose to focus on their business rather than entering local politics, but those who held positions were still hacienderos, or those at their service. Access to education improved the status of the dominant economic and political powers even more. The poor seldom had the chance to complete their education.

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Americans focused on schooling, but the beneficiaries were the children of the rich. This education was used by the rich for their own legal benefit. The cadastral system was completed by 1935 and the program worked for the landed elites. y Because Pampanga was smaller and had better roads, there was more focus on social life (town centers, markets, stores). Social getherings also created an exclusive environment for the rich. On the other end of the spectrum, the peasants experienced no improvement in thei socio-economic status. Sugar and Philippine Society, 1836-1920 XII. The sugar business was vulnerable because it depended on foreign markets. The very status achieved by the industry worked to the detriment of other Philippine enterprises. y Sugar soaked up much of the private/ governmental credit that could have gone to other businesses. y Because of high demands, hacienderos encouraged produce of sugar to the detriment of other crops like rice (which contributed to shortages) y It served to solidify political and colonial hierarchies in society (elite families, corruption) y Institutuionalized gaps between rich and poor preclude any meaningful political participation by the oppressed, compromises idea of participative democracy y Colonizers treated haciendas too nicely, (minimal taxation), therefore, no sufficient revenues were raised to develop agriculture industry y In Pampanga and Negros, there has been no development since, and both have been stuck in the pitfalls of their respective hacienda systems.