The Negros revolutionary leaders were all hacendados, most with landholdings running into hundreds of hectares. Their wealth rested on these lands but they were also dependent on the market, particularly the international market. The local consumption was very small, not only because most people were poor but also there were no local industries using sugar in large quantities. These industries and the consumers were abroad.
More so, American sugar buyers were active in Iloilo and Manila but did not enter the hacienda system as did the Spaniards. Americans therefore were traders and financiers of the Negros sugar and had profited considerably from loan interests and export of the cheap commodity.
Consequently, the decisions of the Negros leaders leaned heavily on where their bread was buttered. Taking the side of the Americans against an unstable Aguinaldo government that had little national support was a practical economic and political decision.
The American military force, anchored in Iloilo Bay was invited “to protect” Negros against two possible threats that would negate the freedom that Negros won on November 6, 1898. First, is the possibility that Spain would cede Luzon to the US in exchange for retaining Visayas and Mindano as part of the agreement in the Paris Peace negotiation.
Second, the fear that Papa Isio would rise against the hacendados in pursuit of his agenda to expel all foreigners, return the lands to the people who work on them in accordance with ancient laws and allow people to worship as they pleased. Isio had an armed, fanatical force bigger than those of the hacendados.
These two possibilities threatened the hacendados’ wealth, lives and freedom.
The Americans accepted the invitation when the Philippine American War erupted in February 1899. Spain ceded the entire Philippines to the US on December 30, 1898 so that the arrival here in March 1899 of Colonel James Smith as military governor was not so much to please the Negros leaders as to impose American rule. The Negros government continued the farce of functioning but it actually did not have authority.
Papa Isio returned to the hills to continue his anti-foreign, anti-landlord cause while, the American sugar producers lobbied to block tariff-free Philippine sugar. Since the Philippines had become a US territory, its sugar became much cheaper than before as it did not have to pay cross-border taxes.
The blockage practically stopped export to the US while shipment to Spain virtually ceased for its noncompetitive price since it had to pay tariff and customs duties. Allegiance to the US did not help the industry.
With a very small local market, the Negros sugar industry sank, forcing Governor Leandro Locsin in 1901 to recommend to the Governor General the reduction of 32 towns to 21 by converting the cash-strapped into barrios. Most of these towns were dependent on land taxes and the hacendados could not pay. Worse, swarms of locust ravaged the land.
The financiers enforced foreclosures and took over many large haciendas while the Spaniards sold their lands or gave them up to their financiers and left the Philippines. The wealthiest province was in dire straits. It was the twilight of the haciendas.
Traders in the US dealing with Philippine sugar attempted to salvage the situation by proposing that the Philippine sugar industry should adopt improve means of production to be able to compete with American sugar even if they had to pay tariff duties.
Does the proposal sound familiar today?
But it was not easy. The US sugar interest knew that the Philippines would demand that as a territory they should not pay tariff as those states in the mainland dealing with another state. This was granted as a matter of law. But there was the catch.
The US sugar lobby was able to get the Congress to pass a law that limited the ownership by Americans or foreigners of Philippine land to not more than 24 hectares. This was supported by US libertarian groups concerned that big corporations and individuals would be purchasing large plantations to the detriment of the native population.
The law appeared altruistic and protective of the Filipinos that nationalists supported it.
But it had a negative effect. The limitation prevented large capital from entering the Philippines; in fact, the law forestalled the competitiveness of Philippine the sugar resulting in more foreclosures and buy-outs of haciendas.
Let’s continue on August 4.
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