Besides the Balivag industry above referred to, the natives manufacture excellent homespun fabrics of cotton, hemp, silk, and pina, the fibers of the pine-apple leaf. Pina-cloth embroidery is also a domestic industry. These articles do not enter at all into the export trade today, but they may certainly be expected to do so before long, the more so if the industry continues to advance as it has done during the past year or so, as regards not only the fabrics themselves, but also the designs and colors. Some coarse hemp textiles have already been exported within the last few years. The finer hemp and hemp and silk fabrics, though much prized by ladies for dressmaking, have not yet entered into the trade, not having so far found favor with the Parisian costumers. A most interesting display of the produce of the Philippines was made at the exhibition (Exposicion Regional de Filipinas) which was held at Manila by the government in 1895. It is certain that the Philippines, whose future is already assured by their mineral wealth, will play a part in the industry of the coming years equal to, if not surpassing, that of Japan. COM ERC There seems to me to be no doubt that even before the arrival of the Spaniards these islands had relations with the Malay archipelago and China, and to a certain extent carried on barter, particularly with the latter country. Regular trade, however, first began to develop in 1571, when Legaspi established himself in Manila. The inhabitants of Cagayan related to Don Juan de Salcedo in 1572 that their cotton fabrics were brought every year by Chinese and Japanese vessels. Manila is without doubt the most advantageously situated port and trading place in the East, and forms the center of the trade between China, Japan, the Dutch archipelago, and Australia. The position of the Philippines is likewise extremely favorable for the west coast of America, and Manila should be the natural mart of eastern Asia. That it does not already occupy this position is owing to the bad system of administration on the part of the government. Had it been otherwise, I am exceedingly doubtful whether Hongkong could ever have reached its present state of importance in the face of Manila. During the northeast monsoon most ships going through the straits to China run right across to Luzon to get protection against the strong adverse winds. It would therefore be quite in their course to touch at Manila, but they avoid the port for the reason stated abovethe chicanery of the customs officials. For the same reason the regular steamers between Hongkong and Australia steam right past the Bay of Manila without running in. Passengers from Manila to Australia have therefore first to cross to Hongkong, and then take passage from there, returning again directly past Manila and Zamboanga (so close to the latter that the people may almost be recognized on the shore), to the first touching placeThursday island or Port Darwin.