Proceedings of the first Independence congress : held in the city of Manila, Philippine islands, February 22-26, 1930 / Published under the direction of Dean maximo M. Kalaw, executive secretary, University of the Philippines.

78 INDEPENDENCE CONGRESS PROCEEDINGS

but, on the other hand, to increase it perhaps in those items
where the increase would be permissible and tolerable, both for
the purpose of increasing the revenues and of protecting existing
local industries and fostering the establishment of new ones.
But we should extricate ourselves from the illusion that such
a procedure would be sufficient to solve the financial problems
that an independent government would meet, because in a
greater degree than any other source of revenue, customs duties,
upon exceeding certain limits, cease to be productive, and they
create an apparent paradox that an increase, for instance, of a
hundred per centum in a certain tariff rate would yield the
result of a fifty per centum reduction or more in the net revenues
from such item, owing to a decrease in consumption, which
causes the enhancement of the price of the commodity, and to
the greater cost of collection brought about by high tariffs,
the instigators of contraband. With reference to imported
articles of prime necessity, it would be inhuman, in many cases,
to cause increases in their prices by high tariffs. For instance,
we have the drugs and medicines which alleviate suffering, or
books, paper, and printing material which disseminate culture.
In general, high and prohibitive tariff rates engender hostility
towards the country that imposes them on the part of other
countries that are affected, and give rise to retaliatory measures
harmful in many cases. The immediate solution to the financial difficulties of our Government will be found in the increase
of those taxes which we may consider inescapable, such as some
of the direct taxes, against which we can not defend ourselves
by practising thrift or by discontinuing consumption. Customs revenues will have to be considered as supplementary.
The kind of tariff that should be adopted for the future, once
the period of readjustment has ended, will depend on the condition of our economic development. An agricultural country
desires a high tariff for its own products with the object of
monopolizing the local market; duties for revenue on manufactured goods in general, and low duties and even free entry for
agricultural machinery and implements; and, as its population
increases and it becomes industrialized, it begins to ask for
high duties on manufactures for the protection of her rising
factories, and low duties on raw material that is not produced