[Governor Basco’s innovations.] Before the administration of this very jealous Governor, for a period of two hundred years the colony received annual contributions from New Spain (Situado de Nueva Espana).  In order to relieve the Spanish Exchequer, from this charge Basco introduced (at that time national economic ideas prevailed of making the natural resources of a State supply its immediate wants) a plan upon which, fifty years later, Java modelled its “Culture System.”  In the Philippines, however, the conditions for this system were less favorable.  In addition to the very slight submissiveness of the population, there were two great obstacles in the opposition of the priests and the want of trustworthy officials.  Of all the provincial trades brought into existence by the energy of Basco, the indigo cultivation is the only one that remains in the hands of private individuals, the tobacco trade still being a Government monopoly. [238] Basco first of all confined the monopoly to the provinces immediately contiguous to the capital, in all of which the cultivation of tobacco was forbidden under penalty of severe punishment, except by persons duly authorized and in the service of the Government. [239] In the other provinces the cultivation was to a certain extent permitted; but the supply remaining after deduction of what was consumed in each province was to be sold to the Government only.

[Speculation with public funds.] In the Bisayas the magistrates purchased the tobacco for the Government and paid for it at the rate previously fixed by the Government factories at Manila; and they were allowed to employ the surplus money of the Government treasury chest for this purpose.  A worse system than this could scarcely be devised.  Officials, thinking only of their own private advantage, suffered no competition in their provinces, employed their official power to oppress the producer to the utmost extent, and thereby naturally checked the production; and the Government treasury chest consequently suffered frequent losses through bankruptcies, inasmuch as the magistrates, who drew a salary of $600 and paid a license of from $100 to $300 for the right of trading, in order to make money quickly, engaged in the most hazardous speculations.  In 1814 this stupid arrangement was first put an end to; and forthwith the tobacco supplies from the Bisayas increased, through the competition of the private dealers, who then, for the first time, had the power of purchase; and from 1839 the planters were empowered to obtain higher prices than those afforded by the greedy monopolizing magistrates.  At present, the following general regulations are in force, subject, however, to continual variation in details.

[Changes bring improvement.] By a Departmental Order, September 5, 1865, the cultivation of tobacco was permitted in all the provinces, though the produce was allowed to be sold only to the Government at the price regulated by them.  The wholesale purchases are made in Luzon and the adjacent islands in fardos, [240] by “colleccion,” that is, direct through the finance officials, who have the management of the plants from the sowing; but in the Bisayas by acopio; that is, the Government officials buy up the tobacco tendered by the growers or speculators by the cwt.