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The bureau has been placed under the general control of the secretary of commerce and police.

POSTAL SERVICE.

The department of posts during the past year has steadily extended its operations, so as to meet every reasonable demand made upon it. The service has been, all things considered, very satisfactory and creditable.

Outside of the commercial ports, the Army and Navy and American civilians, there is as yet very little demand for a frequent mail service. Doubtless with the general restoration of peace and the return of normal times, the Filipinos, when the opportunity is offered, will learn to better appreciate and understand the value of a regular and frequent mail service.

Under the Spanish régime the postal department was conducted in the most primitive way. All coastwise vessels were required to carry the mails without compensation, and presidentes of towns were required to act as postmasters and to distribute and forward the mails without cost to the Government. It can be readily understood, without further elaboration, how effective such a service would be.

The introduction of a cheap and regular mail service, along modern lines, will undoubtedly prove to be here, as it has everywhere else, of immense benefit to the people, and will gradually become selfsupporting.

The department, with the concentration of troops into larger garrisons, will no longer be able to utilize the Quartermaster's Department of the Army to carry its mails nor army officers to act as local postmasters, but will be compelled to establish routes and to appoint postmasters of its own. The lack of good roads and transportation facilities will no doubt prove in the future, as it has done in the past, a serious drawback to anything like a really up-to-date service. This is not only true as to interior points, but applies, to a modified extent, to towns upon the coast, owing to the irregularity with which vessels run. It is believed, however, that with the establishment of the governmental transportation system hereinbefore referred to and the utilization, to a considerable extent, of the services of provincial inspectors of constabulary, school-teachers and other American officials as postmasters a fairly efficient service can be provided. Until railroads are built and highways improved, it is of course impossible to hope for an ideal service.

For the past fiscal year, the expenditures exceeded the receipts by the sum of $36,470.06. It was inevitable that there should have been a deficit, but, all things considered, it is remarkably small. Undoubtedly it will be necessary for several years to come to increase the appropriation for this department to meet its needs and it is equally

certain that the yearly deficits for a considerable period in the future will steadily increase in proportion as the system is extended and perfected. As the masses of the people become better educated, however, and with the general growth and development of all forms of social, industrial, and commercial activities, which must come with the establishment of American methods in government and business, the service will be more extensively patronized, and the department ought to become gradually self-sustaining.

The report of the director-general of posts for the past year is herewith filed, marked "Appendix O."

HARBOR IMPROVEMENT.

The last report of the commission set forth the importance of improving the harbor of Manila. It further mentioned the fact that the Spanish Government had prepared elaborate plans and specifications for this work and had partially carried them into execution. It was further stated that the chief engineer, division of the Philippines, had these plans in his possession and had carefully examined them and pronounced them to be well adapted, with some minor modifications, to the end in view, and that, in his judgment, it would cost about $2,500,000, gold, to carry out the project in its entirety. It was further stated that the commission had enacted a law appropriating $1,000,000, gold, for the purpose and that the work would be let, after advertisement both here and in the United States, to the lowest responsible bidder.

The chief of engineers, after consultation with other experts, has made considerable modification of the original Spanish plans, retaining, however, their most salient features. The commission has further legislated so as to, in effect, pledge that appropriations would be made to an amount not exceeding $2,000,000 additional whenever the same should be necessary, and has authorized the chief of engineers to make contracts, within that limit, for the entire work. In pursuance of this act he has gone forward and after duly advertising, both here and in the United States, as he was required to do by the terms of the act, he has let the main work to the Atlantic, Gulf and Pacific Company of New York for about $2,150,000. The contractor is now engaged in collecting here the necessary outfit for the vigorous prosecution of the work and will begin active operations within the next thirty days.

It is estimated that it will require about two years to complete the contract. When completed Manila will have a commodious and thoroughly protected harbor, with a depth of 30 feet. This will enable vessels of the largest size to anchor within the harbor and at all times to safely and rapidly discharge and take on cargo. The value of this improvement to the commerce of the islands can hardly be overestimated.

In connection with the improvement of the harbor, provision is also made for dredging and deepening the channel of the Pasig River, so that vessels of 16 feet draft can safely enter.

The scheme of harbor improvement involves the reclamation of about 150 acres of land, which will be properly subdivided into lots and it is believed can be sold or leased for a sum which will largely reimburse the Government for its whole outlay.

COAST AND GEODETIC SURVEY.

A suboffice of the United States Coast and Geodetic Survey was established at Manila on the 19th day of September, 1900. Up to this time it has been wholly supported by remittances from the chief office at Washington, with the exception that the commission has purchased and fitted up a steam vessel suitable for use in these waters and turned it over to the suboffice here.

The importance of a full and accurate survey of the harbors and waters of these islands need not be enlarged upon. We are informed that this work was never thoroughly done by the Spaniards, there being much of the coast and many of the harbors about which little is known, and such work as has been bequeathed to us by them is unreliable, their charts oftentimes proving misleading and therefore dangerous.

Surveys have been made under the direction of the officer in charge of the office here of quite a number of the larger and more important ports of the islands, but much remains to be done in this line. Tidal observations have been made at various points where the surveys have been executed and tidal gauges have been erected. Astronomical observations for latitude and longitude have been made at a number of important points in pursuance of the plan to determine base positions at suitable intervals along the coast. Information has also been collected as to the variation of the magnetic needle at all astronomical stations established by the office, and where practicable true meridian lines have been laid out and marked upon the ground.

The office work has been considerable, involving the outfitting and supplying of the parties in the field who were engaged in carrying on the work before referred to, and in the making of advance editions of charts and publishing information collected, in order to properly inform masters of vessels plying in these waters.

A few weeks since there was submitted to the commission a proposition from the Superintendent of the United States Coast and Geodetic Survey for a division of the expense of carrying on the work in these islands upon a more extensive scale. It was proposed, in substance, that the main office would contribute a vessel and equipment and an instrumental outfit, aggregating in value about $125,000, and would annually pay certain salaries, running expenses, repairs and equipment

of vessels, and revision and publication of charts, and so forth, estimated to amount annually to $80,000, upon condition that the insular government would furnish three small steamers and would pay the running expenses and repairs of these vessels and other office and field expenses, which it was estimated would amount to $130,000 per annum. On the 27th day of September last the commission adopted the following resolution:

Resolved, That it is the sense of the commission that it should pay one-half of the current expenses of such surveys, provided such onehalf shall not exceed $80,000, per annum; and that the insular government shall furnish and equip, in addition to the vessel already furnished, two others, not to exceed in cost $66,000.

It is believed that this will result in a satisfactory arrangement being made between the insular government and the United States Coast and Geodetic Survey Office, by which the work of the latter in the islands will be greatly improved and enlarged.

The report of Mr. G. R. Putnam, of the office at Manila, is herewith filed, marked "Appendix P."

HIGHWAYS.

The first law enacted by the commission, pursuant to your direction, was one appropriating $1,000,000, gold, to be expended for the construction of roads, primarily for strategic purposes. This appropriation has been expended under the direction of the chief engineer, Division of the Philippines, and, we have no doubt, to the best advantage. So far as we have been able to observe, the selection of the roads for construction has been judicious and the work has been done in a thorough and substantial manner.

It will be seen by an inspection of act No. 83, which provides the machinery for the organization of provinces, and which has already been explained, that it is contemplated that the general work of road construction shall be left to the direction of the supervisor of each province, who by the law is required to be and is a civil engineer, and that the expenses thereof shall be borne either by the provinces or the various municipalities.

The only road which has been put in course of construction under the immediate direction of the commission is that extending from the town of Pozorubio to the town of Baguio, in the province of Benguet. The reasons why the commission has thought it best to assume direct control and responsibility for the cost of this work were that its cost would be more than any province could afford, and that it was intended to give convenient access to the highlands of Benguet, in which it is hoped and believed ultimately the sanitarium of the Philippines will be located.

In its last report the commission gave an extended account of this

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ROCK WORK IN THE BUED RIVER VALLEY ON THE BENGUET ROAD.

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