and at present incapable of understanding any government but that of absolutism. The intelligence and education of the people may be largely measured by knowledge of the Spanish language. Less than 10 per cent of the people speak Spanish. With Spaniards in control of these islands for four hundred years and with Spanish spoken in all official avenues, nothing could be more significant of the lack of real intelligence among the people than this statement. The common people are not a warlike people, but are submissive and easily-indeed much too easily-controlled by the educated among them, and the power of an educated Filipino politically ambitious, willing to plot and use all the arts of a demagogue in rousing the people, is quite dangerous. The educated people themselves, though full of phrases concerning liberty, have but a faint conception of what real civil liberty is and the mutual self-restraint which is involved in its maintenance. They find it hard to understand the division of powers in a government and the limitations that are operative upon all officers, no matter how high. In the municipalities, in the Spanish days, what the friar did not control the presidente did, and the people knew and expected no limit to his exercise of authority. This is the difficulty we now encounter in the organization of the municipality. The presidente fails to observe the limitations upon his power, and the people are too submissive to press them.

In this condition of affairs we have thought that we ought first to reduce the electorate to those who could be considered intelligent, and so the qualifications for voting fixed in the municipal code are that the voter shall either speak, read, and write English or Spanish, or that he shall have been formerly a municipal officer, or that he should pay a tax equal to $15 a year or own property of the value of $250. It has been proposed, and the commission will probably adopt an amendment in accordance with the proposal, that the payment of a tax of more than $15 as a license for a saloon shall not constitute a qualification. In fixing these qualifications we followed the recommendations of all the Filipinos whom we consulted, except that there were many of them who advocated a higher qualification. Many of the common people will be brought within these qualifications in one generation by the widespread system of education which is being inaugurated, and thus gradually the electorate will be enlarged. Meantime, it is necessary by practical lessons and actual experience to eliminate from the minds of the more intelligent part of the community who form the electorate those ideas of absolutism in government and to impress the conception of a limitation upon power which it is now so difficult for them to understand.

In addition to the defect spoken of there is another. This is an absolute lack of any sense of responsibility on the part of a public officer to the public at large. Office has always been regarded as a source of

private profit and as a means of gratifying private desires, either hate or friendship. We have thought that by establishing a form of municipal government practically autonomous, with a limited electorate, and by subjecting its operations to the scrutiny and criticism of a provincial government in which the controlling element is American, we could gradually teach them the method of carrying on government according to American ideas. In the provincial government Filipinos are associated intimately with Americans, and in the central government the same thing is true. As the government proceeds this association in actual government will certainly form a nucleus of Filipinos, earnest, intelligent, patriotic, who will become familiar with practical free government and civil liberty. This saving remnant will grow as the years go on and in it will be the hope of this people.

How long, it is asked, must this education be continued before real results will be accomplished? Of course it is impossible to tell. Certainly a generation-perhaps two generations will be needed, though a thorough system of public education, the introduction of railways and the intercommunication of all sorts, and the rapid material development of the country, which is quite possible, would greatly assist in this instruction. The Filipino people are not a stupid people. They are bright and imitative. They are quick and anxious to learn and are ambitious. They lack in persistence and power of application, but we are by no means discouraged at the prospect of successfully fitting them for self-government. As it is now, however, the one fact which is clear above every other is that these people are not either the small minority of educated people or the very large majority of ignorant people-prepared to establish a government which would hold together for any length of time, and which would not in a very short time present all the oppression and all the evils which were known in Spanish times.

It is perhaps right that we should express our views as to the wisest course for Congress to take at the coming session. We think that if Congress were to give the present government the benefit of Congressional authority to continue under the limitations which it now has by virtue of the President's instructions until January, 1904, this would probably give time enough to form a complete government as a going concern, and at the end of that time provisions might well be made for a change in the form of the government, so that it should consist of a civil governor, of a legislative council, and of a popular assembly chosen by a limited electorate. There should be these limitations upon the power of the popular assembly, to wit, first, that it should sit annually for three months, from the 1st day of January to the 1st day of April, and then that its power of legislation should cease in each year unless summoned for a definite period in special session by the governor; secondly, if during the three months of its

regular session it failed to vote the supplies necessary for the carrying on of the government as provided by law, the right to vote these supplies should be vested in the legislative council. The governor should have the modified veto power. The legislative council, to consist of Americans and Filipinos, should be created by appointment of the President. The popular assembly should not exceed 30 in number, to be elected from districts to be determined after a census of the islands.

We are aware that the power finally to withhold supplies is a most important legislative function, and that to modify it in the way suggested is not usual. But we think the modification very essential. A popular assembly elected from people never in the habit of of exercising any political power at all, in a country which has been exposed to the passions of war for so many years, is certain to have in it many members lacking altogether in that sense of responsibility for the operation of the government which must be present in each legislative branch in order to make certain that the government may live, and we ought not deliberately to form a government containing in it one branch which might, because of its passion and inexperience, be led into choking the government itself.

It will be observed that in respect to all other legislation except the voting of supplies this popular assembly would exercise the same power as any popular assembly in a similar government, and its vote would be indispensable to the passage of all laws but the budget. We believe that this system would satisfy the Filipino people, because it would give them an opportunity to take part in the government through an electorate, and it would form a place in which public discussion could be effectively had. Of course an absolute veto power, as in the case of the Territories, should be reserved to the President or Congress. What the Filipino people desire is a definite knowledge of the intention of Congress with respect to this country, and the passage of a law such as the one here indicated would place before them within a definite period the opportunity for that which they wish—a popular assembly. With definite knowledge of the time of its creation, they will be satisfied during the two years of the interval in which the government, but partly now established, may be rounded out and completed.

We respectfully urge that Congress be requested to confirm the legislation of the commission already enacted and vest by Congressional act in the civil governor and commission and their successors by appointment of the President the powers and authority heretofore exercised by them under the instructions of the President and subsequent modifications thereof, with the limitations therein contained, and that provision be made in such legislation for the popular assembly already described, to begin its life January, 1904.

We further recommend that by the act establishing the government

not been given the same opportunity t secure places with equal salaries, and th extent: The executive officers of the cen all of them English-speaking officers, and should read, write, and speak English. adult Filipinos have so thoroughly lear enough to pass examinations for such bureaus, under instructions from the com ing Filipinos into place, and the Filipin English. The Filipinos are, as a rule, lack accuracy and close attention. It i judges, however, that each year will see pinos in the higher positions and that operation of the law will be seen to hav ditions only.

There are no Filipino stenographers, a securing a sufficient number of stenograj We have been obliged to send to the Unit for clerks of this class, and still all the expanding government are complaining important aids to the rapid transaction of

The civil-service board, whose report is E, is now at our suggestion taking steps t already appointed with a view to amendin large class within the restrictions of the ci that future appointments shall only be ma

report of the board shows the extent of its activities and the very many useful purposes it serves in the preparation of legislation upon the question of employees and salaries as well as in its usual fields of examinations, classification, certifications, and rules.

FIDELITY BONDS.

The commission has found difficulty in the matter of securing proper and sufficient bonds for those of its civil servants who are intrusted with the collection, custody, and disbursement of money. Under the military régime it was deemed sufficient security that an officer was subject to military discipline for any malversation of funds, and no bond was required. This made it necessary that every position of money responsibility should be filled by an army officer. After the 1st of July, 1901, when the volunteer officers were mustered out, some other provision had to be made. It was impossible, of course, for Americans to secure personal indemnity in the islands. In the fall of 1900 letters were written to all the fidelity companies in the United States inviting them to send agents to the Philippine Islands for the purpose of bonding government employees. Answers were received from nearly all of them declining to extend their business to these islands. Finally, through the assistance of your Department, one company, the Union Surety and Guaranty Company, was induced to send an agent to Manila, who reached here in May of this year, and an arrangement was made between the company and the government by which at quite high rates-1 per cent for all bonds of $6,000 or over, 1 per cent for all bonds of $3,000 to $6,000, and 2 per cent for all bonds under $3,000-all the employees of the government required by law to give bonds, secured them. In order to reduce the cost of the insurance to the employees, the government pays three-fourths of the expense. It is hoped that the result of the year's business will show that the checks are sufficient not to make the risk so great as the company anticipated and that competition will be introduced, so that a lower rate may be obtained. Indeed, the American Surety Company has now sent an agent to the islands. It was absolutely necessary, however, that some arrangement of this kind should be made on July 1 last, even at the high rates mentioned.

FRIARS' LANDS.

The commission renews its recommendations of last year that it be given authority to issue bonds with which to buy up the agricultural holdings and other property of the religious orders. Now that peace is being restored and civil courts are exercising ordinary jurisdiction, the necessity for removing this firebrand from the important provinces of Cavite, Laguna, Rizal, Bulacan, and Bataan can not be overstated. Under the military régime it was entirely possible by military order