An interesting part of abaca lore in Davao was the fiber’s trip to Washington here it became the center of discussion before the National Defense Commission (NDC) in 1940 with Joaquin M. Elizalde, the National Abaca Corporation and Other Fiber Corporation (NAOFC) resident commissioner, appearing as representative of the Philippines.
In part, the Philippine Free Press, in an article penned by James G. Wingo, which appeared in its November 30, 1940 issue, said:
“[Elizalde] appeared before the [NAOFC] to protest against the federal classification of Davao fiber for the manufacture of Manila rope, for this would exclude the fibers produced in other provinces. [He] pointed out that there no longer was any necessity for the specification of Davao fiber since the recently created [NAOFC] had taken steps to ensure the production of only quality fibers, which meet the federal rope specification.”
Additionally, the commissioner “tried to dissipate U.S. officials’ fears about the country’s supply of hemp by promising Philippine cooperation in laying aside sufficient abaca stock for U.S. emergency needs.”
The investigation was an offshoot of reports that abaca fibers sources from other provinces were similarly grade with Davao’s, creating apprehension among ropemakers, especially those serving U.S. defense requirements, who used only hemp produced in Davao region. There were report of substitutions that reached the authorities that ignited them to make a probe.
The Journal of American Chamber of Commerce, in its January 1941 edition, made a clear manifestation on how hemp was graded based on quality, and grading the product accurately.
“Hemp is bought by quality, not by arbitrary grade. No entity, not even the government, gets by n a grade mark. Buyers ascertain whether the assertions as to grade are phonies or not. Reputable grading is therefore the crux of trading in fibers… Where they could use Davao G, they might use Luzon I, or S2, if they use the Luzon output at all; the thing is that when in the market for Davao G they want fiber of that general quality, and Luzon G is not invariably the answer, or not the answer at all. Where substitutions are not possible, Luzon is not bought.
“Calling a fiber G does not make it G. Accurate grading does. The big buyers for the rope mills abandoned Luzon and went to Davao many years ago, yet long after the government inspection and grading went into force, because Davao proved to be the better source of actually standardized fiber, and was riding all the time in quantity grown. Davao strips chiefly by machine, Luzon strips altogether by hand.”
But there was an underlying factor that could have encouraged some traders to shortchange the U.S. buyers, foremost of which was the insistence of American traders to bring down to the ground the prices of hemp, short of dictating the movement of the local market. As a result of this undercurrent, the government decided to establish the NAOFC under Commonwealth Act No. 332, approved on June 18, 1938, to regulate prices of hemp fiber.
The objectives of the NAOFC, in its original form, were to insure a permanent, sufficient and balanced production of abaca and other fibers for the requirements of the local industry and for exportation; to check all speculation tending to promote a decrease in the prices of abaca and other fibers and to stabilize said prices at a level sufficient to cover the cost of production plus a reasonable profit; and to assist in preventing a shortage as well as an excess production of abaca and other fibers and in either case serve as regulating organ in order to avoid a disorganization of this important activity of the national economy and its consequences, such as suspension of work, unemployment, and other social calamities.
In fine, the NAOFC also carried the following functions: to buy, sell, export, barter, and deal in any other manner in abaca and other fibers; to buy, sell, assign, own, operate, rent or lease merchant vessels, rails, railroad lines, and any other means of transportation, stripping machines, presses, warehouses, buildings, and any equipment and material for stripping, warehousing and everything linked to the proper handling of abaca and other fibers; to act as agent, broker, commission merchant, or representative of the producers, merchants, pressmen or other dealers in abaca and other fibers and the products derived them; to grant loans to planters when it deems it advisable, on reasonable terms, on account of abaca and other fiber crops.
Moreover, it also was imbued with the authority to borrow, issue bonds or raise funds for carrying out the objects of NAOFC whenever there was need for the industry; to enter into, make and execute contracts of any kind necessary or incidental to attain its purposes, with any person, firm or public or private company, or with the Philippine government or any foreign sovereignty; to have an office or offices outside of the Philippines and transact business and exercise its powers in any part of the Philippines or any foreign country, state or territory; to do everything directly or indirectly necessary or incidental to, or in furtherance of the purposes of the corporation; to perform all acts which a co-partnership or natural person is authorized to perform under the laws now existing or which may be enacted later.
But the Americans opposed the purpose of NAOFC, which is “to lay floor under abaca prices much as America herself lays a floor under cotton prices.” This position, the foreign traders were firm in saying, was “quite at contraries with the America’s intention to buy fiber as cheap as possible,” a practice that had been eased a bit only with the adoption in recent decades of free trade agreements and special trade privileges.
