The gross revenues of the Philippines are about 10,000,000 dollars. The budget for 1859 is as follows:—

Thus about one-tenth of the gross revenue is received by the mother country in the following shapes:—Salaries of Spanish consuls in the East, 22,500 dollars; remittances to Spain and bills drawn by Spain, 680,600 dollars; tobacco and freights, 168,750 dollars; credits to French government for advances to the imperial navy, 140,000 dollars.

Of the direct taxes, 68,026·77 dollars are paid as tribute by the unconverted natives, 114,604·50 dollars by the mestizos (half-races), 136,208·78 dollars by the Chinese, and 1,609,757·87 dollars by the Indians (or tribes professing Christianity).

The produce of the customs is so small, and the expenses of collection so great—the cost of the coast and inland preventive service alone being 265,271·99 dollars; general and provincial administrations, between 70,000 and 80,000 dollars—that I am persuaded it would be a sound, wise and profitable policy to abandon this source of taxation altogether, and to declare all the ports of the Philippines free.

I have also come to the conclusion that the monopolies, which give a gross revenue to the treasury of more than 7,000,000 dollars, are, independently of their vicious and retardatory action upon the public weal, far less productive than taxation upon the same articles might be made by their emancipation from the bonds of monopoly. I leave here out of sight the enormous amount of fraud and crime, and the pernicious effects upon the public morals of a universal toleration of smuggling, as well as the consideration of all the vexations, delays, checks upon improvement, corruption of officials and the thousand inconveniences of fiscal interference at every stage and step; and only look at the acknowledged cost of the machinery—it amounts to about 5,000,000 dollars—so that the net produce to the State scarcely exceeds 2,000,000 dollars.

The whole receipt from the tobacco monopoly is 5,097,795 dollars. The expenses for which this department is debited are (independently of the proportion of the general charges of administration)—

So that the net rendering of this most valuable production is only 1,886,042·14 dollars, or 37 per cent. upon the gross amount, 63 per cent. being expended on the production of the tobacco and manufacture of the cigars. I am of opinion that from 4,000,000 to 5,000,000 dollars might be realized with immense benefit to the public by a tax upon cultivation, or the imposition of a simple export duty, or by a union of both. Production would thus be largely extended, prices moderated to the consumer and the net revenue probably more than doubled.

From the produce of the lottery, 253,500 dollars, there have to be deducted—expenses of administration, 4,472 dollars; prizes paid, 195,000 dollars; prizes not claimed, 1,000 dollars; commission on sales of tickets, 4,680 dollars; making in all, 205,152 dollars; so that this fertile source of misery, disappointment, and frequently of crime, does not produce a net income of 50,000 dollars to the State. It may well be doubted if such a source of revenue should be maintained. The revenue derived from cock-fights, 86,326·25 dollars, is to some extent subject to the same condemnation, as gambling is the foundation of both, but in the case of the galleras the produce is paid without deduction into the treasury.

In the Bisayas palm wine has been lately made the object of a State monopoly which produces 324,362 dollars, but is very vexatious in its operation and much complained of by the Indians. The tax on spirituous liquors gives 1,465,638 dollars. The opium monopoly brings 44,333·34 dollars; that of gunpowder, 21,406 dollars. Of smaller sources of income the most remarkable are—Papal bulls, giving 58,000 dollars; stamps, 39,600 dollars; fines, 30,550 dollars; post-office stamps, 19,490 dollars; fishery in Manila harbour, 6,500 dollars.

It is remarkable that there are no receipts from the sale or rental of lands. Public works, roads and bridges are in charge of the locality, while of the whole gross revenue more than seven-tenths are the produce of monopolies.

Of the government expenditure, under the head of Grace and Justice, the clergy receive 488,329·28 dollars, and for pious works 39,801·83; Jesuit missions to Mindanao, 25,000. The cost of the Audiencia is 65,556; of the alcaldes and gobernadores, 53,332 dollars.

In the war department the cost of the staff is 154,148·80 dollars; of the infantry, 857,031·17 dollars; cavalry, 52,901·73 dollars; artillery, 192,408·71 dollars; engineers, 32,173 dollars; rations, 140,644·31 dollars; matÉriel, 149,727·10 dollars; transport, 112,000 dollars; special services, 216,673·89 dollars. In the finance expenses the sum of 310,615·75 dollars appears as pensions.

The personnel of the marine department is 235,671·82 dollars; cost of building, repairing, &c., 266,813·17 dollars; salaries, &c., are 155,294·98 dollars; rations, 190,740·84 dollars.

The governor-general receives, including the secretariat, 31,056 dollars; expenses, 2,500 dollars. The heaviest charge in the section of civil services is 120,000 dollars for the mail steamers between Hong Kong and Manila, and 35,000 dollars for the service between Spain and Hong Kong. There is an additional charge for the post-office of 6,852 dollars. The only receipt reported on this account is for post-office stamps, 19,490 dollars.

I have made no reference to the minor details of the incomings and outgoings of Philippine finance. The mother country has little cause to complain, receiving as she does a net revenue of about 5s. per head from the Indian population. In fact, about half of the whole amount of direct taxation goes to Spain, independently of what Spanish subjects receive who are employed in the public service. The Philippines happily have no debt, and, considering that the Indian pays nothing for his lands, it cannot be said that he is heavily taxed. But that the revenues are susceptible of immense development—that production, agricultural and manufactured, is in a backward and unsatisfactory state—that trade and shipping might be enormously increased—and that great changes might be most beneficially introduced into many branches of administration, must be obvious to the political economist and the shrewd observer. The best evidence I can give of a grateful remembrance of the kindnesses I received will be the frank expression of opinions friendly to the progress and prosperity of these fertile and improveable regions. Meliorations many and great have already made their way; it suffices to look back upon the state of the Philippines, “cramped, cabined and confined” as they were, and to compare them with their present half-emancipated condition. No doubt Spain has much to learn at home before she can be expected to communicate commercial and political wisdom to her dependencies abroad. But she may be animated by the experience she has had, and at last discover that intercourse with opulent nations tends not to impoverish, but to enrich those who encourage and extend that intercourse.