duties under the Payne-Aldrich Act of 1909. In 1913, quota limitations on Philippine raw materials
exported to the United States were completely lifted. The free trade between these two types of
commodities perpetuated the colonial and agrarian economy. The increasing avalanche of finished
goods into the country crushed local handicrafts and manufacturers and furthermore compelled the
people to buy these finished goods and to produce raw materials mainly.
U.S. surplus was invested in the Philippines both in the form of direct investments and loan
capital. Direct investments went mainly into the production of raw materials and into trade in U.S.
finished products and local raw materials. Minor processing of raw materials was also introduced.
Mineral ores were extracted for the first time on a commercial basis. On the other hand, loan capital
served to support foreign trade and cover trade deficits, convert pesos into dollars for profit remittances,
pay salaries of American bureaucrats and business personnel, cover the needs of the colonial
government for various equipment and the like. Every year, raw material production and, therefore, the
exploitation of the people had to be intensified by the colonial regime in order to increase its rate of
U.S. imperialism improved the system of transportation and communications as a means to tighten
its political, economic, cultural and military control of the Philippines. U.S. corporations derived huge
profits from public works contracts in the construction of more roads, bridges, ports and other
transportation facilities. These public works in turn widened directly the market for U.S. motor
vehicles, machinery and oil products. The colonial exchange of raw materials and finished products
was accelerated. Troop movement for the suppression of the people also became faster.
The establishment of an extensive public school system and the adoption of English as the medium
of instruction served not only to enhance the political indoctrination of the Filipinos into subservience
to U.S. imperialism but also to encourage local taste for American commodities in general. It also
opened the market directly for U.S. educational materials. The mass media was developed not only to
spread imperialist propaganda but also to advertise all kinds of U.S. goods and, in particular, to sell
various kinds of printing and communications equipment. Even the campaign for public sanitation and