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MANILA DAILY BULLETIN 



ed empty half way around the world. The 

 European factory enjoyed better labor con- 

 ditions and better facilities for manufacture. 

 They had a market near at hand for the res- 

 idual cake, whereas cake shipped from the 

 Philippines was thought to arrive in inferior 

 condition and was a dangerous fire risk for 

 the steamers transporting it. Furthermore 

 the European factory had a larger market 

 from which to draw its raw material which 

 was not so subject to violent fluctuation. 



It was clear, however, to Mr. Thompson, 

 that there were compensating features to 

 offset the advantages possessed by the Euro- 

 pean and American mills and he persisted 

 in this field until he interested new capital 

 in erecting the second mill ever put up in the 

 Philippines. This mill, the Philippine Vege- 

 table Oil Co., known throughout the Islands 

 as the "P. V. O." was erected on the north 

 bank of the Pasig in Manila; in 1913 nearly 

 opposite the site of the mill which had been 

 burnt down. It has been in continuous opera- 

 tion ever since, and has made large profits. 



The great success of the P. V. O. and its 

 successors was due to the natural advantages 

 possessed by oil shipments over copra. Bar- 

 reled oil takes up little over half of the bulk 

 space required for copra based on oil con- 

 tent, and thus enjoys a lower freight rate. 

 Oil can be shipped on any steamer whereas 

 passenger vessels can not accept copra be- 

 cause of the objectionable odor. There is 

 less loss in handling the raw material and a 

 better grade of oil can be turned out because 

 the copra when fresh does not yield so high a 

 content of free fatty acids; furthermore, for 

 a given weight of copra a larger extraction of 

 oil can be secured before than after shipment. 

 Last, but not least of the many advantages 

 of local mills, is the ability to ship oil in the 

 ballast tanks of steamers or special fuel oil 

 tank vessels. This was not contemplated 

 in the early days of the industry but is now 

 almost universal. 



The third venture in the Philippines was 

 the mill built at Opon near Cebu, by the 

 Visayan Refining Co., a subsidiary of the 

 American Philippines Co. This latter com- 

 pany was organized through the efforts of 

 Dean C. Worcester, who had been for thirteen 

 years Secretary of the Interior in the Phil- 



TRANSPORTING COPRA TO MARKET BY PACKHORSES 



ippine service. Mr. Thompson was active 

 in the construction of this mill also, and it 

 differed from the earlier mills in that it not 

 only used the Expeller system which had 

 proven so satisfactory, but also used improved 

 hydraulic presses. The earlier French sys- 

 tem had been to express oil with heavy pres- 

 ses, and as this was a non-continuous process, 

 it was slow, expensive, and required much 

 labor. In the Expeller system the triturated 

 copra is fed steadily in against a revolving 

 screw which expels the oil through one ori- 

 fice and the cake through another. While 

 much quicker, it does not obtain so large a 

 proportion of the oil as the slower press pro- 

 cess. It is now general practice in many 

 Philippine mills to use both systems, although 

 during the war, when prices were such as to 



TIIF. CONSTRUCTION OF FIRST-CLASS ROADS THROUGH THE COCONUT GROVES HAS REDUCED TRANSPORTATION COSTS 

 TO THE MINIMUM. AUTOMOBILE TRUCKS HAVE TAKEN THE PLACE OF PACK HORSES 



place a premium on speed rather than eco- 

 nomy, the Expellers were used almost ex- 

 clusively. 



Both of these mills were in full operation 

 when the war started in 1914, and the re- 

 sultant demand for glycerine, for edible vege- 

 table fats, and for an oil which could be 

 substituted for non-obtainable animal and 

 other fats caused a great demand for coconut 

 oil. At the same time, however, freight 

 rates went to a point where it was hardly 

 possible to ship copra so that the price of 

 copra in the Philippines declined to a very 

 low figure. With a low cost for its raw mate- 

 rial and a full market for its products, the 

 oil industry started on its bonanza days. 



When the profits in the industry first be- 

 came apparent there arose a tendency to erect 

 new mills. The first of these was the Phil- 

 ippine Manufacturing Co., Tondo, Manila, 

 which was already manufacturing soap. Car- 

 rero, Vidal & Co., Luzon Refining Co., and 

 the Philippine Oil Products Co. were also 

 started late in 1916 and in 1917. Some of 

 the new mills sold their product to the older 

 established mills, leaving them the task of 

 marketing the oil in the States. This meth- 

 od represented a substantial profit but 

 the biggest returns were secured by the in- 

 dependents, who marketed their own oil. 



Aided by the exceptionally favorable 

 market conditions great profits were made by 

 all mills, and there was a rush to bring out 

 new Expellers. The United States was 

 at war and shipments were greatly delayed 

 so that the new machinery ordered at that 

 time is still coming into Manila in small 

 batches "up to this day. Perhaps the most 

 successful importers were those who paid 

 fancy prices for second hand machines in the 

 southern cotton seed oil mills and thus ob- 

 tained prompt delivery. Those who could 

 not enter the industry with their own ma- 

 chinery became anxious at least to own stock 

 in the established companies. The resultant 

 boom in stocks was the first in Manila's 

 history, and is a promising indication of the 

 impending change from a purely agricultural 

 to a partly industrial basis for -the Islands. 

 It is a very good sign that the chief interest 

 in this industrial activity was taken by the 

 Filipinos themselves. Heretofore, the ex- 

 ternal commerce of the Islands and its large 

 scale industrial enterprises have tended to 

 be in the hands of other than native capital. 



