[Manila tobacco handicapped.] According to Agius ("Memoria,” 1871), in the European market the Manila tobacco was admitted to be without any rival, with the sole exception of the Vuelta abajo of Cuba; and most certainly in the Asiatic and Oceanic ports its superior quality was undisputed, as the Havana tobacco loses its flavor on the long voyage to these countries; but now, from year to year, it is surely losing its reputation.  If, then, the Manila cigars have not hitherto succeeded in making themselves acceptable in Europe on account of their inferiority, the blame is attributable simply to the system of compulsory labor, and the chronic insolvency of the Insular Treasury, whilst the produce of other tobacco countries has steadily progressed in quality in consequence of free competition.  The fame of the Manila cigars may also have suffered in some slight measure from the wide-spread, though perfectly erroneous, idea that they contained opium.

[Hampered by government restrictions.] How greatly the produce might be increased by means of free trade is shown under other circumstances by the example of Cuba.  At the time when the Government there monopolized the tobacco trade, the crops were only partly sufficient to cover the home consumption; whereas, at the present time, Cuba supplies all the markets of the world. [237] The decision of Captain-General De la Gandara upon this question is in the highest degree worthy of notice.  In a Ms. Report to the Colonial Minister, March, 1858, concerning a measure for rendering the regulations of the tobacco monopoly still more stringent, he says:  “If the tobacco cultivation is placed without restriction into the hands of private traders, we shall most probably, in a few years, be in a position to command nearly all the markets in the world.”  Most of the islands produce tobacco.  According to the quality of the produce, the tobacco provinces rank in the following order:  First, Cagayan and Isabela; Second, Igorots; Third, Island of Mindanao; Fourth, Bisayas; Fifth, Nueva Ecija.

[Origin of monopoly.] From the Government Order, dated November 20, 1625, it is evident that even at that early period the sale of betel nut, palm spirit (toddy), tobacco, etc., was a Government monopoly:  but it does not seem to have been very strictly carried out.  The tobacco monopoly, as it stands at present, the whole trade of which from the sowing of the seedling plants to the sale of the manufactured article is exclusively in the hands of the Government, was first introduced by Captain-General Jose Basco y Vargas.  And a Government Order, under date of January 9, 1780 (confirmed by Departmental Regulations, December 13, 1781), further enacted that the tobacco regulations should be extended to the Philippine Islands, in like manner as in all Spanish possessions in this and the other hemisphere (de uno y otto mundo).