great empire. The rate of interest was i now and, accordingly, the government g 5 per cent, with the proviso that, after should be equally divided between the co The right of purchase was reserved to th of a term of years and the right of gove supervision was provided for. The pre housie that this policy would cost the go would give an extraordinary impetus to and especially to the exchanges betwee more than verified and did more for th decade than had been accomplished in years. It will be seen from what has been sa had authority to act, would, wherever n railroads--certainly as to the island of L danao-prefer to secure the capital requi anteeing thereon a low rate of interest. as to the latter island and also as to the doro, which are much in the condition would not be best or even feasible, and t donation of lands, or both a guaranty lands, might be in the public interest. amount of land held by the Christian P C 1901-PT 1- -5 lands of the entire islands, is almost nominal. The datos or chiefs of the Moro and other non-Christian tribes claim, as we are informed, a sort of general ownership of the lands within their respective jurisdiction, their subjects having no separate interests therein. What shall be done as to the lands thus held is a matter requiring careful thought and delicate handling. It is believed that the chiefs can be dealt with on a satisfactory basis, if it is deemed advisable to open negotiations with them. Such a step would be undoubtedly necessary before any disposition of lands was made, as all room for friction or doubt as to the validity of the government's title should first be removed. In recommending that it be given power to grant franchises, make donations of land or guarantee interest, as above set forth, it should not be understood that the commission would in every case and without exception exercise all of the powers thus vested in it. The aim of the commission would be to secure needed lines of railroad upon the best possible terms. It might come to pass that one-half the lines in Luzon might be built without government aid of any sort, and further investigation might develop that it is not best at once to begin railroads in Mindanao and the other southern islands referred to. It is also within the bounds of possibility that competition between capitalists might result in offers more favorable than are now anticipated. BUREAU OF COAST GUARD AND TRANSPORTATION. The difficulties of communication between the various points in the islands, already referred to, is a serious obstacle to the efficient administration of all branches of the Government. When it is considered that in some cases a month or more, in others weeks, and in nearly every case days, must elapse in going from Manila to the various provincial capitals, and vice versa, the extent of this difficulty can, in a measure, be understood. It is almost impossible, under such conditions, for the various departments of the insular government to keep in touch with their subordinates and intelligently direct their operations, while their remoteness and inaccessibility tend to generate in them a lack of that sense of immediate responsibility so essential to systematic work and discipline. Aside from this, and not an inconsiderable item, the expenses of all the departments are largely increased by this circumstance. Especially are the offices of the auditor, treasurer, chief of constabulary, collector of customs, the light-house service, the post-office, the insular purchasing agent and the various provincial boards seriously handicapped in their operations for lack of transportation. From a political standpoint also it is most desirable that the people in all the islands should feel themselves always in close relations with the capital and the central government, and understand that the latter has a lively interest in their affairs, is fully informed as to what is |