What’s in a Million?

Two Stories about Philippine Tax Stamps

Douglas K. Lehmann

I. A Million Dollar Sale of Sugar 3 Mysteries Surround a 1934 Bill of Exchange

CPI 1934 $1 = $15 Today (No WPI in 1934)

What was the Tax Rate?

Bill of Exchange 4c for every P200 ($100,000 = P200,000) 1,000 increments times 4c = P40 6 x P3 (W-726 orange red) or P18 + 22 x P1 (W-725 dark green) or P22 = P40

(1) What was the Commodity?

Sugar, coconut, hemp or tobacco = top 4 exports Tobacco too costly (5.5M cigars), coconut and hemp too light 1934 price of Sugar = P113.55/MT

$100,000 = 1.761 MT 1930 Hofuku Mari shipped 1.020 MT 1925 Mariston shipped 3.062 MT

59% Philippine exports was sugar in 1934 99% of raw sugar went to the USA in 1934 1934 largest sugar export between World Wars I and II 1934 import quotas established for sugar retroactive entire year Excess in pipeline kept in bonded custom warehouse for sale after January 1, 1935 This shipment made the quota! End of the refinery season

(2) Who was the Exporter?

14 Sugar major “Centrals” in the Philippines Centrals used modern machinery and required large loans 8 Centrals were Private and 6 Centrals owned by the Government The Philippine National Bank (PNB) was the national bank

PNB had a special staff to finance/select top management 5 Bank Centrals in Negros Occidental and 1 in Parnpanga

(3) Who was the Importer?

Bank of California, N.A. located in San Francisco Transfer made by Wells Fargo Bank & Union Trust Company, S.F. Transfer dates of 1 & 2 November 1934 = 1 month shipment California had many beet sugar refineries in 1934 Only 1 refinery in California used cane sugar This shipment would take 6-hours to refine

1934 oil-driven vacuum-pans boil 50 tons sugar/2 hours

California and Hawaiian Sugar Refining Company, Crockett, CA

Today subsidiary of American Sugar Refining, Inc (Domino Sugar) 2,400-foot deep water frontage (between interstate 80 bridges) 17-18,000 5-lb bags sugar/day (jute lined with cotton) Imports from Peru, Java, PI Distribute West of Mississippi River Some refined sugar exported back to the Philippines!

What bridges did the ship go under to get to Crockett in 1934?

Crockett the Queen City of the Carquinez Straits and one of the largest industries of the Pacific Coast.

(4) Why the extra 16c?

Unsolved Transfer between PNB and the Bureau of Internal Revenue (BIR)

Left hand pays right hand Insurance policy issued? Governments tend to self-insure A private insurance rate would be in excess of 5P My theory = An arrangement to placate the BIR?

II. The Muscatine Meeting The story of 3 Tax Documents and 5,000 Cigars

Manila Circa 1930 – Paper and cellophane all imported

Muscatine, Iowa On the Mississippi River and served by the railroad in 1855 1849 changed name from Bloomington to Muscatine (only one in USA) 1880’s population 23,000 and steady thereafter Factories flourished as a commerce center Settled by German immigrants in two waves of 1838-50 and 1850-70

1865

Importer = Herman Gremmel

1872 Hermann Gremmel Cigar Factory and Store 1890s Christopher T. Gremmel, family of 10 1933 Edward H. Gremmel manager (Age 48) 400 cigars per HOUR (Cigarette machines 40/minute) Gremmel used quality tobacco (domestic and Cuban) Niche existed for a cheap cigar and Philippine imports satisfied this need

Exporter = La Insular Cigar and Cigarette Factory

Established 1883 20 Plaza Binondo (destroyed 1944) 3,000 women, boys, & girls 300-400 hand-rolled cigars per day per person

Shipped 5,000 loose cigars in a single boxed

wooden crate

Document One

(1) Bill of Exchange

$80.85 purchase price Deposited in the Muscatine Bank and Trust Company, Sep 16, 1933 5-week transit time First National Bank of Chicago debited the Philippine National Bank First National Chicago Tax Rate = 4c per P200, 1915 (right) $80.85 = P 161.70 or 1 increment of 4c 4c light green documentary stamp W-721 Cost per cigar was 1.8c, likely selling price 2 for 5c

Document Two

(2) Customs Document

First Tax = P2 (W-866A carmine) fixed customs document fee Second Tax = 20c (W-723 blue) customs officer’s signature fee Certified 90% or more a product of the Philippine (80% or more admitted duty free) Here labor and wooden box comprise the Philippine product cost (paper and cellophane US made as no paper mills in the Philippines)

Document Three

(3) Insurance Policy

Warehouse to warehouse insurance Policy value of $90 (product, transportation, and administrative costs) Covers fire, piracy, theft, plus water, sweat & handling damages There are war exclusions Tax Rate = 2c for every P4 of the premium, so the premium was 1-2% of the cigar value. 2c W-720 carmine documentary stamp. Wise and Company Manila agent for the North China Insurance Company, Limited since 1875

All Three (3) Documents

Document One Document Two Document Three

Same bank stamp Number 56303 First National Bank of Chicago (bottom arc only shows O of Chicago)

What are the odds of 3 documents ending up in the same collection?

Chance of finding any 1 of the 3 documents = 1 in a 100 Chance of finding 2 of the 3 = 100 x 100 or 1 in 10,000 Chance of finding all 3 documents = 100 x 10,000 or 1 in 1,000,000

That is One in a Million!