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V4 % UO . t^u.AJ?-C^V.-jril^-«^

THIRD ANNUAL REPORT

OF TH£

PHILIPPINE COMMISSION.

1 9 O 2.

I^^A^TiT 1

BUREAU OF INSULAR ABT-AIRS, "^Var Department.

WASHINGTON:

OOVEKNMBNT PRINTING OFFICB. 1903.

CONTENTS.

Page.

Message from the President, transmitting report xi

Letter from the Secretary of War xi

Kefobt of the United States Philippine CJommission 3

Keport of the civil governor 13

General conditions 13

General conditions of the Filipino provinces 15

The labor question 21

The friars' lands 24 •^

Office of the executive secretary 25

Provincial governments 25

Civil-service board -. 28

Insular purchasing agent 29

The ci ty of Manila 30

Benguet 31

Department of commerce and police '. 32

Constabulary 32

Bureau of posts 35

Coast guard and transportation 36

Coast and geodetic survey 37

Franchises and corporations 37

Coastwise trade 38

Improvement of the port 38

Consulting engineer 38

Exhibit A. Executive bureau 41

B. Report of the governor of the province of Rizal 46

C. Civil-service board 49

A. Results of examinations 64

B. Appointments made 57

D. Insular purchasing agent 59

E. Municipal board, city of Manila 77

B. Statement of exempt property 143

F. Benguet road 153

Fl. Filipino as a laborer 159 v^

F2. PWlippine labor 169

F3. City engineer of Manila labor 177

G. Philippines constabulary 179

H. Bureau of posts 226

I. Bureau of coast guard and transportation captain of the port. 243

K. United States Coast and Geodetic Survey. . .'. 247

L. Improvement of the port of Manila 249

M. Consulting engineer 255

K Native labor 257 v/^

III

IV CONTENTS.

Rkpobt op the sbgrktary op the interior 261

The board of health for the Philippine Islands and the city of Manila 261

Legislation recommended by the board 262

Organization of provincial and municipal boards of ^health 262

Serum and vaccine institutes 264

Contagious-disease hospital 264

Special work of the board in Manila 264

Epidemics 266

Bubonic plague 265

The cholera epidemic 267

Cholera work in Manila 268

Cholera hospitals and detention camps 269

Opposition to cholera work in Manila , 270

Results of cholera work in Manila 271

Death of Dr. Meacham 274

Deathof Mr. J. L. Mudge 274

Special mention of the 8er\'ice8 of other health officers 274

The quarantine service 276

Civil hospital 277

Civil sanitarium at Baguio, Behguet 278

The proposed leper colony 280

The forestry bureau 281

Increase in working force 282

Botanical collections 282

Forestry regulations 283

Philippine sawmills 28.'^

Extent of forest lands 284

Rubber and gutta-percha 284

Quantities of forest products taken from public lands 286

Mining bureau 286

Mineralogical and geological 8ur\'ey8 287

Legislation recommended 288

Bureau of patents, copyrights, and trade-marks 288

Bureau of government laboratories 289

The serum institute 291

Work of the chemical laboratory' 292

Work of the biological laborator}' 293

Locust fungus 294

% Public lands 294

Legislation recommende<l 295f/'

Present state of agriculture 297

The bureau of agriculture 298

Soil investigation 300

Fiber investigations v . 300

Work in Batangas province 301

Farmers' bulletins 301

Experimental work at Baguio, Benguet 301

Agricultural opportunities in the Philippines 302

Future work of the bureau of agriculture 304

Weather bureau 305

New apparatus 306

Crop service 306

Rei>orts .• '. 306

Astronomical and magnetic work 306

CONTENTS. V

Rbport of the secretary op the interior Continued. Page.

Bureau of non-Christian tribes 306

Appendix A. Report of Col. L. M. Maus, commissioner of public health. . 309 Cxlxibit A. Report on Asiatic cholera from the Santa Mesa Cholera

Hospital 358

B. Report of the superintendent of the pail system 3d3

C. Report of the assistant sanitary engineer 378

D. Report of the city veterinarian 380

E. Report of the Santiago Cholera Hospital 383

F. Report of the Santiago Cholera Hospital 389

Appendix B. Report of Dr. Frank S. Bourns, commissioner of public

health 391

Exhibit A. Cholera statistics 394

B. Report of Station A, board of health 395

C. Report of Station C, board of health 396

D. Report of station D, board of health 397

E. Report of station F, board of health 397

F. Report of station G, board of health 398

G. Report of station H, board of health 398

H. Report of station I, board of health 400

I. Report of station J, board of health 400

J. Report of station K, board of health 401

K. Report of station L, board of health 402

L. Report of Santiago Cholera Hospital for August, 1902 403

M. List of drugs sent to the provinces in August, 1902 404

N. Report of the veterinarian of the board of health for

AugU8t/l902 408

O. Rei)ort from the bureau of government laboratories of

work done in August, 1902 408

P. Report of the Vaccine Institute for August, 1902 409

Q. Report of operations of the pail system 410

Appendix C. Abstracts from the cholera report of Capt. C. F. De Mey . . 411

D. Report of the chief quarantine officer for the fiscal year

ending June 30, 1902 414

E. Report of the chief quarantine oflScer for July, 1902 428

F. Report of the chief quarantine officer for August, 1902 431

G. Report of the attending physician and surgeon for civil offi-

cers and employees for the year ending August, 1902 437

H. Report of the attending physician and surgeon in charge of

the civil sanitarium at Baguio, Benguet, for the year ending

AugU8t31, 1902 443

I. Report of the committee appointed to select a site for a

leper colony 445

J. Report of the chief of the forestry bureau 451

K. Report of the chief of the mining bureau 529

L. Report of the officer in chai^ge of the bureau of patents,

copyrights, and trade-marks 539

M. Report of the superintendent of government laboratories

for the year ending August 31, 1902 545

N. Report of the chief of the bureau of public lands for the

year ending August 31, 1902 583

t:

VI CONTENTS.

Report of the secretary of the interior Continued. Pa^. Appendix O. Report of the chief of the bureau of agriculture for the year

ending August 31, 1902 587

Exhibit A. Report of Wm. S. Lyon, in charge of seed and plant intro- duction 596

B. Report of the botanist 599

C. Report of the soil physicist 601

I). Report of the expert in fiber investigations 603

E. Report of the farm machine expert 604

F. Report on La Granja Modela, at Magalang 606

G. Report on La Granja Modela, at Magalang 607 " •^

H. Report on La Granja Modela, near La Carlota, island of

Negros 609

I. Report of Oswald A. Steven on the model farm in western

Negros, La Granja Modela 610

J. Report on the San Ramon farm in the province of Zam-

boanga 611

K, Report of the manager of the San Ramon government

farm 614

L. Report on the government experiment station at Albay. . 617

M. Report on the government experiment station at Iloilo . . 617

N. Report on the government experiment station in the

province of Isabela 618

O. Report on the experiment station at Cebu 618

P. Report made by the botanist on an overland trip from

Manila to Aparri 619

Q. Report of the botanist on the royal botanic gardens of

Ceylon and the botanical garden at Singapore 627

R. Notes on agriculture in Ceylon and on the botanical gar- dens at Peradeniya 630

S. Report of investigations in the islands of Cebu and Negroe with the view to the selection of a site for a model sugar estate 633

T. Report on the agricultural conditions along the line of

the Manila and Dagupan Railroad 637

U. Report on the agricultural conditions and possibilities

at Baguio, Benguet 638

V. Preliminary report on the work of the bureau of agri- culture, in cooperation with the military department, inBatangas pronnoe 641

W. Report on the Abaca or Manila hemp soils of the Phil- ippines 642 *^

X. Correspondence between the secretary of the interior and Dr. S. A. Knapp, special commissioner of the United States Department of Agriculture, relative to certain agricultural matters in the Philippines 652

Y. Report by Dr. S. A. Knapp to the Secretary of Agricul- i

ture of the United States on his observations in the Philippines 654

Z. Circulars Nos. 2 and 3 and accompanying letters, with

the answers from two correspondents, illustrating the I

character of the replies 657 I

V.

CONTENTS. VII

Bkpobt of the secretary op the interior Continued. Pa^^e. Appendix P. Report of the director of the Philippine weather bureau for

. the year ending August 31, 1902 663

Q. Report of the chief of the bureau of non-Christian tribes for

the year ending August 31, 1902 679

Fiserr annual report of the secretary of finance and justice to the

Philippine Commission from October 15, 1901, to September 30, 1902 691

Administration of justice 691

New l^;isIation relating to courts 692

Attomey-generara office 696

Criminal code 697

Code of criminal procedure 697

Registration of land titles 697

Insular cold-storage and ice plant 698

Currency a 699

Banks and banking 707

General condition of the treasury. .• 708

Seized funds and special deposits 709

Insular budget 710

Budget of the city of Manila 711

Customs tariff T. 712

Internal revenue 715

Financial condition of the provinces and municipalities 717

Exhibit A. Decisions of court of customs appeals 721

Exhibit I. Report of the attorney-general, relating to the oi^ganiza- tion of his office and the business transacted therein from the date of its organization, on July 16, 1901, to

September 1, 1902 734

II. Bureau of the insular cold storage and ice plant, Manila, P. I. First annual report of the operation of the plant for the fiscal year beginning July 1, 1901, and ending

June 30, 1902 737

III. Supplement to annual report of the operation of the insu-

lar cold-storage and ice plant 757

IV. Combined statement of the receipts and disbursements of

the government of the Philippine Archipelago for the

fiscal year 1902, to June 30, 1902 759

V. General revenije account of the treasurer of the archi- pelago, July 1 to September 30, 1902 827

VI. Estimated expenses and revenues of the central govern- ment and of the city of Manila during the fiscal year

1903 / : 829

VII. Financial statement of receipts and disbursements, fiscal

year 1902; also estimate of same for the fiscal year 1903. 833 VIII. Inventory of lands, buildings, and other real property of

the city of Manila, June 30, 1902 835

IX. Inventory of personal property of the city of Manila for

quarter ending June 30, 1902 837

X. Special report of the collector of customs, covering the

period from June 1, 1901, to September 1, 1902 837

A. Customs receipts at the port of Manila, etc 843

B. Customs receipts in the Philippine Archipelago

during period of American occupation, stated by fiscal vears 846

Vra CONTENTS.

First annual report op the secretary op finance and justice to the Philip- Paso. FINE Commission from October 15, 1901, to September 30, 1902 Continued. Exhibit A. Decisions of court of customs appeals Continued.

Exhibit X. Special report of the collector of customs, etc. Continued.

C. Customs receipts and expenditures at Manila and

subports, by months and fiscal years, during the

period of American occupation 846

D. Summaries of imports, by countries, from the port

of Manila, during the fiscal year ending; June

30, 1902 848

E. Summary of exports, by countries, from the port of

Manila, P. I., during the fiscal year ending June

30, 1902 850

F. Statement of collections at interior ports ot fhe ^ Philippine Archipelago during the fiscal year

ending June 30, 1902 850

G. Arrivals and departures of Chinese at the port of

Manila from June 1, 1901, to October 1, 1902 . . . 852

H. Coastwise licenses 852

XI. Supplemental report of the collector of customs for the Philipi^e Archipelago on the general effects produced by lowering certain duties in the tariff re\asion law of

1901 on food products 853

XII. Report of the collector of internal revenue 854

First annual report op the secretary of public instruction, year ending

October 15, 1902 .867

Organization of public instruction 867

The American teachers 869

The Filipino teachers 871

Manila Normal School 873

Teachers* college 874

Provincial schools of secondary instruction 875

Normal institutes 877

Municipal support of normal-school students 879

Sending Filipino students to America 880 '^

Language of the schools 880 K'

Industrial education 881 ^

Education of the Igorrotes 883 /

The Negritos * 883 \/

Education of the Moros 884 /

Local self-help in educational affairs 884

Instruction in agriculture 886

Compulsory school attendance 886

Night schools 887

Nautical school 888

School of telegraphy 889

Municipal, provincial, and insular support of schools 889

Construction and repair of public buildings 890

Training of workmen 893

Public printing 894

Archives 895

The American circulating library 896

The museum 897

Statistics 900

ooirrENTS.

FiBST ANNUAL REPORT OP THB SBCRKTABY OP PUBUC INSTRUCTION, ETC. Cont*d. Pa

Thecensofl i

The Official Gazette j 1

Appendix A. Report of the general superintendent of education for the

year ending September 1, 1902 \

JExhibit A. List of American teachers and stations {

B. List showing location of all public schools in the Phil-

ippine Archipelago, the number of public schools in each province, and the number of native and American teachers employed {

C. Appointments from United States 1(

Appendix B. Report of the bureau of architecture and construction of

public buildings for the period from October 18, 1901,

to September 1, 1902 1(

C. Report of the public printer for the period from May 19, 1901, to June 30, 1902, with appendix covering the

period from July 1 to August 31, 1902 1(

D. —Report of the chief of the bureau of archives 1(

Acta of the Philippine Commission (Nos. 426 to 493) 1(

Ordinances of the city of Manila 11

II

lo the Senate and House of Representatives:

I herewith send a letter from the Secretary of War transmitting the third annual report of the Philippine Commission covering the year ending October 1, 1902, and the laws passed by the Commission \)etween July 1, 1902, and October 27, 1902.

I call your special attention to the recommendations contained in this letter of the Secretary of War. I most earnestly feel that the enactment of the measures already pending in your body for the better- ment of the Philippine Islands is imperatively demanded by the situation in those islands and serious calamity may come from failure to enact them. Furthermore, I with equal earnestness ask your attention to the recommendation of the Secretary of War in the accompanying^ letter and urge its adoption so that the sum of money therein specified may be appropriated for the uses and in the manner likewise specified in order that th^ present distress in the islands may be remedied.

Theodore Roosevelt. White House, January 7, 190S.

W^AR Department, Washington^ January 6^ 1903. The Phesibent:

I have the honor to transmit herewith the third annual report of the Philippine Commission, covering the year ending October 1, 1902. This report is in compliance with the» third paragraph of the Instruc- tions to the Philippine Commission, dated April 7, 1900, and with section S6 of the act entitled "An act temporarily to provide for the administration of the affairs of civil government in the Philippine Islands, and for other purposes," approved July 1, 1902.

Accompanying the report, and transmitted with it, are the acts of the Philippine Commission, from and including act No. 425, enacted July 2, 1902, to and including act No. 493, enacted October 27, 1902.

Section 86 of the act of Congress above cited requires that these laws shall be reported to Congress. All of the laws enacted by the Commission prior to that act have already been reported to Congress.

I beg to ask special consideration of the recommendations of the Commission, all of which have my hearty approval.

1

XII REPORT OF THE PHILIPPINE COMMISSION.

It seems to me that the conditions j'esulting from the destruction by rinderpest of 90 per cent of the carabaos, the draft animals of the islands, and the consequent failure of the rice crop, followed by an epidemic of cholera, are so serious and distressing as to call for action by Congress beyond that for which the Commission specifically ask.

The removal under the laws of Congress of export duties on goods shipped from the Philippines to the United States has materially reduced the revenues of the island, while the duties collected in the United States upon impoilations from the Philippines, which under ^

the same laws were to be turned over to the Philippine treasury and were expected to make good the deficit, have amounted to pi-actically nothing. At the same time the decline in the price of silver, the evils of a fluctuating currency, and the impoverishment of the people, have reduced the government revenues when they are most needed for relief i

of the people. I

I think the occasion for relief in tihe Philippines is now greater than ,

it was in Cuba when Congress appropriated $3,000',000 for the pay- i

men t* of the Cuban soldiers out of the Treasury of the IJnited States, or than it was in Porto Rico when hundreds of thousands of dollars were contributed by the people of thfe United States, and more than a million of dollars paid out of the National Treasury for the relief of the sufferers from the hurricane of August, 1899.

An appropriation of not less than $3,000,000 for the relief of the -^

distress in the Philippine Islands from the causes which I have men- tioned would be in harmony with the course pursued by Congress toward the people of the other Spanish islands and practical evidence of the sincere interest that the people of the United States take in the welfare of the Philippine people and of the kindly and generous treat- ment which they are to receive. Previous experience indicates that j such an appropriation could be made the most useful by giving the Philippine government discretion to apply it, in such proportions as they deem wise, in the direct purchase and distribution or sale of sup- plies, or through the employment of labor in the construction of gov- ernment wagon roads, railroads, or other public works. v Very respectfully, "^

Elihu Egot, I

Secretary of War. !

REPORT OF THE UNITED STATES PHILIPPINE COMMISSION.

WAR 1902— VOL 10 1

REPORT

OF THB

UNITED STATES PHILIPPINE COMMISSION.

Philippine Commission,

Manila^ November i, 1902. Sir; The Pliilippine Commission begs to submit this, its third annual report, for the year ending October 1, 1902. In previous reports the Commission has dealt with every phase of the conditions eicisting in the islands, and the steps taken by it or members of the Government for their improvement. On the 1st of Septfember, 1901, the civil government became definitely established, with a civil gov- ernor and four departments, at the head of each of which was a secre- tary. It has seemed best to the Commission, in view of this organi- zation, that the governor and the four secretaries should each make a report to the Commission concerning the transactions under the imme- diate executive control of each, the governor giving an account of the general conditions prevailing in the islands and of the work done by the bureaus reporting directly to him, and each of the secretaries giving an account of the work done by the bureaus included in his department It has been thought wise for the Commission not to deal * at length with the details of the transactions of the government during the past year, but only to refer to the general conditions and to certain subjects, the pressing importance of which may reasonably demand ttie attention of Congress at this session.

The insurrection as an organized attempt to subvert the authority of the United States in these islands is entirely at an end, and the whole Christian Filipino population, with the exception of a few thousand of persons who have settled in the Moro country in isolated towns, are enjoying civil government under the beneficent provisions of recent Congressional legislation concerning the Philippines. Much remains to be done in perfecting the civil government, in marshalling the forces of law and order against lawlessness and disturbances, and in teaching the people of the Philippine Islands not only that they have rights under the law, but also that they can not hope to enjoy such rights unless they acquire courage and independence sufiicient to assert them against attempts by their fellow Filipinos to perpetuate the

3

4 BEPOBT OF THB PHILIPPINE OOMMISSIOir.

system of ^^caciqueism," or^-liberally translated, ^^bossism,'' by which they have heretofore been completely governed, and under which they have enjoyed very little of personal liberty.

Comparatively few of the Filipinos who have been heretofore inter- ested in politics as insurrectos or otherwise have felt an interest in teaching the common people their individual rights in respect to personal liberty, property, or the pursuit of happiness. This work of instruc- tion in individual rights will require many years before the country is rid of tibe feudal relation of dependence which so many of the common people now feel toward their wealthy or educated native leaders and of the ideas underlying this relation. It is in the existence of this relation that much of the difficulty in the labor problem in these islands finds its source. The laborers under the Spanish r%ime were accustomed to do their work at the bidding of some superior, not from a motive of earning wages, but in obedience to the order of one entitled to command; and there rests upon this government and upon the American Govern- ment the duty of teaching the Filipino laborers the independence and dignity of labor under a free government, before they may do their best work and contribute as much as they should contribute to the development of their country. The organization of labor into unions in Manila, while brought about by a crack-brained insurrecto agitator for political purposes only, will, we hope, lead to an organization that may have much to do with inculcating this lesson.

No great work of organizing a government and establishing new conditions has ever met with more obstacles than the one upon which the Philippine government is at present engaged. The six years of war to which these islands have been subjected have naturally created a class of restless men utterly lacking in habits of industry, taught to live and prey upon the country for their support by the confiscation of food and supplies as a war measure, and regai*ding the duties of a laborer as dull and impossible for one who has tasted the excitement of a guerrilla life. Even to the man anxious to return to agricultural pursuit the conditions existing present no temptation. By the war and by the rinderpest, chiefly the latter, the carabaos, or water buf- faloes, have been reduced to 10 per cent of their former number. The chief food of the common people of these islands is rice, and the cara- bao is the indispensable instrument of the people in the cultivation of rice as they cultivate it, as it is also the chief means of transportation of the tobacco, hemp, and other crops. The loss of the carabaos has reduced the production of rice in the islands 75 per cent, and the 25 per cent remaining is in imminent danger from the locusts which, very destructive in the Visayan Islands last year, are this year sweeping over the rice fields of Luzon and threaten to destroy utterly the crops of those provinces of Luzon which may fairly be considered the giun- ery of the Philippine Islands.

BB^OBT 01? THE FHIUPPIKE OOHMISSIOir. 5

So short is the rice crop and so high has the pr ice of rice become, estimated in the Mexican dollar due both to the scarcity of rice and the fall of silver that the Commission has deemed it necessary within the last few days to take the steps of purchasing 300,000 piculs (137i pounds to the picul) of rice, to be sold at cost in provinces where the price of rice furnished through the ordinary commercial channels shall be exorbitant. The price of carabaos has risen from |20 Mexican to $200 Mexican apiece. The cholera, beginning in Manila in March of this year, has raged in the various provinces and has not yet disap- peared. Vigorous measures were adopted to reduce its spread in the city of Manila and elsewhere, but it will probably claim in the archi- pelago 100,000 victims. It has greatly interfered with agriculture, and the sanitary restrictions, which were enforced with greater or less rigor throughout the islands have incommoded a people who do not sympathize with or understand their necessity. The suspicious timidity and superstition of these people were aroused by the ravages of cholera to the point of attributing the disease to poisonous powders dropped into wells by American soldiers for the purpose of destroying the entire populace, and the quarantine regulations were regarded by the more ignorant as a manifestation of hostility to the people by the American Government.

The Filipino people of the better class have received the passage of the Philippine act with great satisfaction. The provision for the legislative assembly has attracted much attention, and its passage has been interpreted as an earnest of the desire of the United States Government to test the governing capacity of the people and of the sincerity of its promises to extend to them self-government as rapidly as they shall show themselves fit for it. The extremists, of course, desire two popular legislative bodies instead of one, and others not so extreme are anxious that the legislative assembly shall be established immediately after the taking and publication of the census instead of two years thereafter. The Commission feels that it will be in a much better position to make recommendations upon the point of expediting theliolding of the assembly after the census has been taken. The coming year, under the trying circumstances which now prevail, will show how much we may depend upon the conservative and law-abiding character of the controlling elements of the Filipino people.

The fluctuations in the value in gold of the Mexican dollar have borne heavily on the common people. Wages are in silver and they have not advanced with the cost of living, for the merchants and tradesmen much more readily make their prices respond to the fluctu- ations in the value of the Mexican dollar than do those dependent on wages and salaries for a living. The fluctuations in the value of silver have greatly interfered with business. The evils attendant on such fluctuations are fully set forth in the report of the secretary of finance

6 BBPORT OF TBB PHILTPPIIfB 00HHIS8I0K.

and justice. We urge with as much earnestness as possible the neces- sity for immediate action by Congress in establishing a gold standard, and we recommend the adoption of the plan which was recommended by the Commission in its last year's report The theory that the only persons prejudiced by the fluctuations in silver values are the civil servants of the insular government is wholly unfounded. Their con- venience is somewhat affected it is true, but the present system, by which the official rate is changed to meet the commercial rate every ten days, much reduces their losses from the fluctuation, and if the only inconvenience caused by the fall in silver was to them, we should not feel called upon in this repoi*t to recommend a change. It is the inconvenience and suffering and injustice done to the common people and to the merchants and to the conduct of business on safe principles that require us to speak with as much emphasis as we can command.

The business of those islands is much more affected by exchange on London and New York than by that on Hongkong, Singapore, and Shanjghai. The importations are largely from Europe and America. The merchants of Manila are not alone in their complaints against the effect of the silver standard on business. Their brethem of Singa- pore and Hongkong and of all the ports of China complain bitterly of the impossibility of carrying on business on wise and conservative lines as long as the prices of articles are to be subjected to such violent fluctuations as have affected the value of Mexican dollars in the last year, and seek to avoid loss as much as possible by making contracts and doing business on a gold basis. The insular government of the Philippine Islands has itself lost $950,000 in gold value during the last year from the fall of silver, changing the expected surplus into a deficit.

First. We respectfully urge that it is the duty of the American Government to secure to the Philippine people as stable a currency as that which is used by the people of the United States; and we are con- fident that this can be accomplished with a minimum of risk to the Treasury of the United States and the treasury of the Philippine Islands if the plan already recommended be adopted. A banking law with power to authorize the issue of paper currency on good securfty is very badly needed and should be included in any plan for relief of the monetary situation.

Second. We urge the reduction of the duties imposed on goods and merchandise imported into the United States from the Philippine Islands so as to make them not more than 25 per cent of the duties imposed by the Dingley law. The reduction of only 25 per cent, and the absurdly small effect of that reduction upon the trade between the islands and the United States, shown in the collection of little more than 111,000 of duties in five months, demonstrates that if any benefit at all is to be conferred upon tibe Philippine Islands by such action, the percentage of reduction must be largely increased. We feel oon-

BBPOST OF THB FHILEPPnTB OOMMISSION. 7

fident that a reduction of 75 x>er cent will not result in a dumping upon ilie American market of either tobacco or other commodities so as perceptibly to affect that market; while, on the other hand, the ability to sell in the markets of the United States will be of tibe greatest encouragement to the woefully depressed agriculture of the Philippine Islands, under the conditions which we have described. The reduc- tion of 25 per cent, instead of being an aid to us in winning the good .will of tl^e Philippine people, if it is not foHowed now by further reductions, will lead them to believe that we are merely going through the form of a concession, which amounts in fact to no concession at all; that the United States is merely ^^ keeping the word of promise to the ear and breaking it to the hope."

We think that a 50 per cent reduction will not give any substantial relief, and that nothing short of 75 per cent will accomplish a useful purpose. It is a mistake to suppose that the severance of these islands from Spain has made no difference in the markets to which their tobacco and sugar growers may look. On the contrary, with the sepa- ration from Spain, the sugar and tobacco growers have been deprived of markets which were of great assistance to them, and it seems only fair and just that the United States should substitute its own markets for the Spanish markets.

Third. Another matter which we desire to call to your attention, and through you, if it meets with your approval, to that of Congress, is the burdensome restrictions upon the investment of capital in lands and in mines in these islands. As the Government owns 65,000,000 of acres out of 70,000,000 in the archipelago, there is substantially no danger that the ownership of land here can be centered in a few indi- viduals or corporations if the amount owned by any one individual owner or corporation is limited by law to 20,000 or 25,000 acres. The government of the islands is land poor, and the sale of land to individ- uals and corporations who will come in and invest their money in miproving it is the greatest boon that could happen, not only to the Government, but to the people themselves. The requirements that no corporation shall own more than 2,500 acres stops absolutely the investment of new capital in the sugar industry and in the tobacco industry. It takes away any hope of bringing prosperity to these islands by the extending of the acreage in the cultivation of these two important products of tibe archipelago. It very much interferes with the investment of capital in railroad enterprises, because they are nat- urally connected with the possibilities of transportation of sugar and tobacco from the interior to seaports. It is not too much to say that there will be found in the long run to be no grater obstacle to the permanent improvement of economic conditions here than the present restrictions upon the amount of land that can be held by a corporation or individuaL If an absolute sale of such large amounts to one cor-

8 BSFOBT OF THE FHILIPPIKE COMMISSION.

poration as 25,000 acres is objected to, then it would greatly aid in securing the investment of capital if leases of 30,000 acres for fifty, sixty, or seventy years could be granted to a corporation or individual.

There are also strong reasons for urging that the requirement that no person shall own an interest in two mining claims should be repealed. It will paralyze all enterprise and take away from prospecting capi- talists all interest in the mineral wealth to be found here, unless some method of evading the restriction can be devised. The demoralizing effect upon a whole community of the nonenforcement or evasion of unwise laws need not be dwelt upon.

Fourth. We desire to urge that all the bonds authorized to be issued by the Philippine government, for internal improvements or otherwise, shall be made free from State, county, and municipal taxes in the United States. The government which is being carried on here is an experiment by the United States in a new field, and taxes upon the bonds which are issued to carry on the work of improve- ;

ment here are an interference with this work and with an important i

agency of the United States. Congress has not deemed it proper to •guarantee the payment of the bonds, which would have much reduced j

the interest to be paid on them, but if it will give to the bonds the exemption from taxation above mentioned, the insular government will be able to float them at a reasonable rate. This exemption has been provided for the bonds to be issued in the purchase of the friars' lands; and we can not see why any distinction should be made between those bonds and bonds issued by the Philippine government for other reforms and improvements in the islands.

It will be found, should we be obliged to issue bonds subject to State, county, and municipal taxes, that not one dollar of value will probably be added to the personal property actually taxed in any State by reason of declared ownership of such bonds; and therefore by giving such exemption as we ask not one dollar will be withdrawn from the taxable property in a State, county, or municipality in the United States. With such exemption, however, administrators, trustees, and public corporations like banks, trust companies, and loan companies, whose investments are continually subject to the examination of the public assessor, will be able to invest and hold the bonds free of taxa- tion, and will make a market for them which will insure their sale at a reasonably low rate of interest.

The questions growing out of the friars' lands, and of the former relations of the Roman Catholic Church to the government of these islands under the Spanish regime, which were made the subject of negotiation on the vigit of the civil governor to Rome between him ^ and the head of the Catholic Church, having been referred for further discussion and possible solution to conferences between the apostolic delegate of the Pope and the civil governor in Manila, are to be taken

BEPOBT OT THS PHILIFPINX OOUaSSIOK. 9

up during the coming winter. The civil governor has been advised by a letter from Archbishop Giambattista Guidi of his appointment as apostolic delegate and of his intention to visit the Philippine Islands. He will arrive in Manila about the 20th of November, and soon after that date the negotiations will be begun.

The Commission does not concur in the view that it would be wise to admit Chinese unskilled labor into these islands. The objections to such a policy are sufficiently set forth in the report of the civil gov- ernor to the Commission, and do not require further elaboration. The Commission does not concur in the view that there will not be a good supply of labor from the Filipino people. It believes that as conditions become more settled, as the Filipino labor is better organized, as the Filipino people are taught the independence and dignity of labor, the