for military reasons to forbid the owners of these lands from attempting either to collect their rents or to oust their tenants; but now no such arbitrary remedy is available, and the only course which is feasible is the one suggested. The commission believes itself in a position to say that there is a willingness on the part of those who have control of this matter for the religious orders to negotiate and part with all the land to the Government at reasonable prices. As it has already stated in its former report, the commission believes that the transfer of the property and its sale in small holdings to the present tenants, on long payments, might be effected without loss, and that this solution would be very satisfactory to all the people. The commission should be authorized, in case its view of the matter is approved, to issue bonds in an amount sufficient to buy the lands, and should be required to hold the proceeds of the sales of such lands as a sinking fund to meet the obligations of the bonds. We earnestly recommend this course. The matter is a pressing one, for the action of the courts in enforcing legal decrees in favor of the real owners of the land against the tenants will be a constant source of irritation, riot, and lawlessness in the provinces where the land is, and this will lead to distrust and uneasiness everywhere.

The acreage, as stated in our last report, of the land owned by friars in the provinces where the population is dense and the question is a heated one, is: Cavite, 121,747 acres; Laguna, 62,172 acres; Manila Province (now Rizal), 50,145 acres; Bulacan, 39,441 acres; Cebu, 16,413 acres; Morong (now Rizal), 4,940 acres; Bataan, 1,000 acres― upward of 300,000 acres. In addition to this there are something more than 100,000 acres, one-half in Isabela and one-half in Mindoro, in regions sparsely settled, the ownership of which by the friars does not involve so much popular resentment because of their remoteness.

SAN JOSE COLLEGE CASE.

Since our last report the commission announced its conclusion in the San Jose College controversy. It decided that there was between the Catholic Church on the one hand and the petitioners representing the Filipino public on the other a controversy concerning the legal control of the trust involving sufficiently serious questions of law to submit the case to a competent tribunal. The commission was careful not to express any view on the merits. To put the case in way of settlement, the commission passed a law appointing a board to represent the interests of the Filipino people, in the name of the United States, and to bring suit in the supreme court of the islands against the archbishop of Manila and the friar in immediate control of the estate of the college. The act fixed the procedure and postponed the time within which the judgment in the supreme court of the islands should be final to the end of the term of the present Congress, in order that

provision might be made, if deemed wise, for an appeal to the Supreme Court of the United States. It seems to us that such an appeal ought to be provided for. The importance of the cause may be understood from the opinion of the commission in disposing of it, reported in the second quarter's volume of the commission laws. The suit has been brought and is now pending before the supreme court, and will be heard within the next three months.

As stated in our former report, there are other controversies likely to be brought into the courts of the islands between the Catholic Church and the insular government in respect to the title to and the administration of trust or other property. The intimate association between the Spanish Government and the Catholic Church and the difficulty of separating what is civil and what is church property is so great and presents questions of such delicacy from a political standpoint that we recommend that in all such cases an appeal be granted from the supreme court of the islands to the Supreme Court of the United States.

TAXATION.

In the plan of the commission the central government must depend mainly on import and export duties for its support. The internal taxes of whatever character are principally to be devoted to the support of the provincial and municipal governments. In pursuance of this purpose, whenever a provincial government is organized, one-half of the internal-revenue receipts, i. e., the industrial, urbana, and stamp taxes, since January, 1901, is turned over to the provincial treasury, and the remaining one-half is turned over to the municipalities of the province. A cedula or poll tax of $1 Mexican is levied upon each male person between the ages of 18 and 55, and one-half the proceeds is paid into the treasury of the town in which he lives and one-half into the provincial treasury. In addition, the municipal council has power to license saloons and other businesses requiring police supervision and mentioned in the municipal code. During the spring of 1902 will be collected for the first time an ad valorem land tax for the benefit of the provincial and municipal governments. The provincial board is required to levy one-eighth of 1 per cent on the assessable land of the province for roads and bridges and may levy two-eighths more for general purposes. The municipal council is required to levy one-fourth of 1 per cent for schools and may levy one-fourth of 1 per cent more for general purposes. We have not sufficient data at hand to say how much revenue these sources are likely to afford, but so far as we have been able to judge we think the provinces and towns will be self-supporting. If a deficiency should arise, it can be met by an increase of the land tax, which as at present provided is very small.

We have made an advance to each province of $2,500 gold, to be repaid January 1, 1903. As the governments all began without any money whatever, this seemed necessary to give them a start, though several provinces have declined the loan. No complaint has been made to the commission from any province that it is running behind. In Ambos Camarines, Capiz, and Iloilo danger of suffering from starvation was reported to be imminent because of the death of the carabaos. Accordingly, we have authorized each of those provinces to borrow from the insular treasury $25,000 gold to build needed roads in the vicinity of towns where suffering was greatest, so as to furnish money to the people, the money to be paid back in five annual installments, beginning in two years.

The provincial board of Iloilo has since advised the commission that it will not borrow the money, for the reason that its revenues are large enough to do the work without it. The other two provinces have drawn the money.

THE LABOR PROBLEM.

The commission is not prepared to make recommendations in regard to the admission of Chinese as laborers. It is very difficult to secure good labor in the islands, especially skilled labor. Labor such as is secured is irregular, poor, and much more expensive for work done than in the United States. There is not the slightest danger of pauper competition in these islands with the laborers of the United States. How much of the difficulty is due to unsettled conditions and how much is inherent in the race we can not say; but we think the tranquilizing of the provinces will certainly make labor better and easier to get, though it will long be unsatisfactory when measured by American standards. Throughout the archipelago wages have doubled and in many cases trebled since 1898. In too many instances the immediate result of doubling the wage is to induce the laborer to work just half as many days.

THE COMMISSARY.

Upon September 1, 1901, the privilege of buying supplies from the army commissary was withdrawn from civilians. While this greatly increased the cost of living of American civilians in Manila, it was a wise step, for civilian use of the commissary had interfered with legitimate trade and delayed the opening of grocery, meat, and other supply shops. In the country, however, the case is different for American employees of the civil government. There necessary supplies for the living of an American can not be obtained at all, and we could not hope to keep American provincial officers, school teachers, post-office employees, customs men, constabulary inspectors, and others in the provinces, many with their families, unless they could

obtain the necessaries of life. We have therefore established, through the Philippine constabulary, a civil commissary for the provinces, through which we expect to furnish certain staple supplies which will enable our employees in the provinces to eat American food, supplemented by the fruit and fish of the country.

TARIFF RELATIONS WITH THE UNITED STATES.

The new tariff, to which more detailed reference will be made hereafter, will go into effect on the 15th of November, and it is hoped that it will cause a great reduction in the cost of living in the islands. The tax on necessities for living and for improving and developing the resources of the islands has been reduced below 25 per centum ad valorem. Many American products heretofore excluded by a prohibitory tariff will now come in, and the food of the people will be reduced in cost and gradually increased in variety. If Congress will reduce by 50 per cent the United States duty on tobacco, hemp, and sugar and other merchandise coming from these islands, it is certain that the trade between them and the United States under the new tariff will increase by leaps and bounds. Such generosity would much strengthen the bonds between the Filipino and American people, and it is earnestly recommended.

THE CITY OF MANILA.

On the 7th of August the charter of Manila went into effect and the provost-marshal-general turned over the city government to the municipal board of three members appointed under the charter by the civil governor with the consent of the commission. The charter follows closely in its general lines the plan of the legislation by which the city of Washington is governed. In its preparation we were greatly assisted by a draft of a charter made by Brig. Gen. George W. Davis, the last provost-marshal-general of Manila. The new charter was adopted only after a full public discussion. Instead of requiring the insular government to pay one-half of the expenses of the city-the proportion paid for Washington by the Federal Government-the proportion is reduced to three-tenths.

It was not thought wise to leave the control of the city government to popular selection. The population of Manila is of a most miscellaneous character. There are 60,000 Chinese, perhaps 7,500 Americans, as many more Spaniards and other Europeans, and of Filipinos. of all tribes and languages 175,000. The criminal and turbulent classes are well represented in Manila. The municipal problems presented in the necessity for doubling the water supply, for constructing a sewerage system, for dealing with the noisome moat surrounding the walled city, for filling up part of the small creeks or esteros that now intersect the city and are but open sewers, and for dredging out

and walling the banks of others useful for navigation are so full of difficulty that they need the best men that can be found to solve them, and popular election would not have resulted in furnishing good material. The charter has not been long enough in operation to justify an opinion as to its sufficiency. The city of Manila has no debt, but it has many expensive requirements, and until a debt is created these requirements can not be met. We think that it may be necessary to issue bonds to an amount not exceeding $4,000,000 with which to double the water supply and to institute a sewer system. General Davis, the able provost-marshal-general, made so complete and elaborate a report on the city of Manila, which is included in General MacArthur's report, that it is unnecessary for us to attempt an addition to it after only two months' experience in civil government of the city. A reference to the income and expenditures of the city will hereafter be made.

There is no city in the world which is so much in need of electric railways as the city of Manila. The cab system is most defective, and it is necessary for the government to maintain a large number of government cabs for the use of the public offices during business hours. A stringent law has been passed forbidding the use of such conveyances after hours or for the purpose of conveying employees from their homes to their offices. If we had an adequate system of street railways there would be no need of maintaining such an establishment as the government must now maintain. Of far greater importance, however, is the inconvenience to the public arising from a lack of proper street transportation. There is one street railway company, whose right to use electricity or anything but horsepower is in doubt, and whose line is divided into seven different divisions, over each of which it is permitted to charge a regular fare. The line is very poorly conducted and affords little if any accommodation. The reasons for conferring upon some authority the power to grant franchises in this country are manifold, but there is no better illustration of the overwhelming necessity for such a power than is shown in the case of streetrailway facilities in Manila.

It is earnestly recommended that Congress confer upon the commission, with such restrictions as may seem wise, including the necessity for confirmation by the Secretary of War or the President, the right to grant franchises of this kind in the towns and cities of the archipelago.

PUBLIC LANDS.

In the development of these islands it is essential that opportunity shall be afforded for the sale and settlement of the enormous tracts of public lands. The system of public-land surveys provided by the statutes of the United States might well be carried out here, though,