by the insurrectionary government in any particular province those funds may be returned to the treasurer of the province from which they came, to be used for the general provincial purposes of building roads and other public works. All these funds were collected ultimately for insular uses, and it seems to the commission that the United States Government might feel justified in causing them to be dedicated to the interests of the islands through the public-school fund above suggested. Many of the seized articles, aside from such as have historical value as mementos, should be converted into money by sale, and those which have historic value as mementos, if any, might be reserved for deposit in a local museum. 66 INSULAR BUDGET. We regret that it is impracticable to present at this time a complete statement of the financial transactions of the Philippine government for the fiscal year 1901. The auditor for the archipelago states that although he is required by rule 38 of act 90 to submit an annual report of the financial transactions of the government as soon after the close of the fiscal year as the accounts shall have been adjusted,” it is impracticable at this date to present a comprehensive report of that character, but that it is in course of preparation and will be submitted at the earliest practicable date. The act requiring the auditor to make such annual report did not become effective until April 1, 1901, or until the beginning of the final quarter of the fiscal year ending June 30, 1901, and it is extremely difficult to comply satisfactorily with the requirements of rule 38 of act No. 90, because of the method of keeping and rendering accounts followed before April 1, 1901. Disbursements were not made altogether by departments or offices. Each department made disbursements in its own behalf, and the disbursing quartermaster of civil bureaus as well furnished supplies and made additional disbursements in behalf of almost every department of the civil government without segregation. When the accounts of the fiscal year are settled and adjusted a summary of each disbursing officer's account will be compiled and included in the annual report of the auditor. When the accounting bureau was organized in February of this year the settlements of accounts averaged one year in arrears, and under your instructions it was made incumbent upon the reorganized office to prepare detailed statements of receipts and disbursements of the government of the archipelago from the beginning of American occupancy. It has been impossible in the brief time since February to complete this work. All customs, postal, and internal-revenue accounts have been settled and adjusted to June 30, 1901, and the settlement of the miscellaneous accounts is approaching completion. The work of the auditor's office is therefore rapidly becoming current, but from the material at hand important and useful data can be compiled. The derived from customs sources. During the of withdrawals from the treasury amounted of the United States. There was on the insular treasury a total sum of $6,667,927.71. priated but not at that time withdrawn. The expenditures during that fiscal year we toms service, $128,274.29 for the internal rev for the post-office service, $6,533,864.13 for bursements, and $100 of Spanish seized fund ment in making a satisfactory budget aris nature of receipts and disbursements which a practically a year past. Great numbers of c merly filled by officers and soldiers detailed United States, without salaries from the ins gradually filled by purely civil officers and increase of expenditure for that purpose. Down to April 1, 1901, very large sums we insular treasury for the payment of purely mil and since that time large sums have been ment of several thousand Filipino scouts for but the disbursements in this respect have and will doubtless soon almost entirely cease. ments and bureaus of the insular governmen time to time, as the sphere of its activity ext directions, and the expenditures have lan increase of clerical force and supplies thus m large sums were paid from the insular treasury during the whole of the last fiscal year for the government of the city of Manila. Under the charter of that city, which went into effect on the 7th day of August, 1901, 70 per cent of these expenses will be borne hereafter by the city. The accounts have likewise been complicated by the fact that when the central government passed from that of administration by the military authorities to the civil authorities large sums of money which had been appropriated for disbursements by military officials were returned to the treasury as repayments, thereby largely swelling the apparent receipts, although not affecting the actual income. It was stated in our last report that while October, 1900, was the banner month for revenue, it was probable that after January 1, 1901, the revenue would be likely to materially increase, so as perhaps to equal $1,000,000 a month, United States money. This expectation has been realized, the remainder of the fiscal year showing an average income of approximately $900,000, United States money, per month. During that period, also, legislation was enacted, elsewhere referred to in this report, which diverted a great portion of the internal revenue from the insular treasury to provincial and municipal treasuries, and this introduced another element into the estimates of probable income and expenditures for the coming year. As the law now stands, the income of the insular government is very largely from customs receipts alone, but meanwhile a new tariff has been enacted, as elsewhere in this report detailed, under which it is probable that the revenues from customs service will materially decrease because the rates have been so largely reduced. The effect may not be felt during the first months of the operations of the new law, which goes into force on November 15, 1901, because importers may import large amounts of goods for the purpose of supplying the market at lower prices rendered possible by lower customs duties; but after the market becomes thoroughly supplied with goods introduced under the new tariff, there will be only the ordinary current demand, under much lower rates of duties. It is hoped that the lower prices will enable the people to purchase and consume much more largely, and that the lower duties may in this way to a degree be counteracted; but in any event the available surplus in the treasury is now so large that the government will have abundant means at hand for maintaining itself for the incoming year, irrespective of the revenue that may accrue during the transitional period incident to the new tariff. The country is so rich in resources that if it becomes necessary new plans of internal taxation can be provided to meet all the necessities of economical administration. As elsewhere stated, the subject of internal-revenue taxes is under consideration, and a bill providing for such taxation is in the hands of a committee of the commission. We are able to supplement the reports for the fiscal year ending June 30, 1901, by a statement of the actual receipts and disbursements ing Spanish seized funds, amounted to $7,4 money, of which the balance available for app where stated. In view of the foregoing fa budget for the ensuing year must necessaril of uncertainty; but making the best use pra at hand the following is submitted as an app the ensuing quarter: Receipts from customs. Miscellaneous.. Municipality of Manila Total estimated income... The estimated disbursements for the ensuing the official estimates, submitted to the comm ments, for appropriations, and are as follows United States Philippine Commission, executive bure civil-service board, and the insular purchasing agent Department of interior Department of commerce and police... Department of finance and justice Department of public instruction... Miscellaneous, including chief quartermaster and chief the division.... Municipality of Manila Total. Included in these disbursements are $441,115.16 for the insular purchasing agent; for native scouts, approximately $250,000, and for extraordinary supplies and the purchase of launches, $18,000. The disbursements to the insular purchasing agent will all be reimbursed, and the sum included for native scouts will only in small part be needed, in view of the pending enlistment of these scouts into the United States service. These items aggregate $709,115.16, which are not properly disbursements for current expenses. Deducting this aggregate, $709,115.16, from the aggregate estimate of expenditures for the quarter, we have a net estimate of expenses for the quarter of $1,788,802.82. The total estimated income for the quarter being $2,557,500 and the total estimated disbursements being $1,788,802.82, the apparent surplus for the quarter is $768,697.18. It is hoped that the remaining quarters of the fiscal year will show as favorable a balance in favor of receipts, leaving a substantial sum, aside from the present available surplus, for permanent improvements. We inclose copy of the report of the insular treasurer for the fiscal year ending June 30, 1901, together with the exhibits thereto annexed, which is marked Appendix X, and the report of the collector of customs of the islands and of the chief port for the same period, which is marked Appendix Y. BUDGET FOR THE CITY OF MANILA. The budget for the city of Manila is exceedingly difficult to state. The city has been under the operation of its charter for less than two months. Its land values for the purposes of taxation have not yet been ascertained, nor are its other sources of income yet known with certainty. The expenses of the city under the administration of the provost-marshal-general were very large, and the accounts were kept in such manner that it was impracticable to distinguish with clearness the expenditures that were purely for the benefit of the city and those that were for the benefit of the military government at large. It appears from the report of F. G. Downey, major and paymaster, U. S. A., chief of the department of receipts and disbursements in the provost-marshal's office, copy of which is hereto annexed and marked Appendix GG, that the total expenditures in his department for the last fiscal year were $1,626,107.81, of which $288,423.11 was for special improvements, $164,964.52 for insular purposes, $33,823.13 for military purposes, and $1,139,092.05 for current city expenditures, while the total income of the city was $434,880.38, all in money of the United States; but during that period large sums collected in the city as internal revenue were treated as insular receipts and not as city income. Thereafter such receipts inure to the city treasury. The income and expenditures under the Spanish régime were very much less than under the American, but under the latter the streets have |