and perhaps adverse criticism, will result, from which it would willingly be relieved. It is felt, however, that a matter of such vital importance should be discussed from an entirely impersonal standpoint, and, if its honest judgment is asked for it should be frankly given.

Assuming that the authority to make such concessions is given as recommended, it is thought well to give the views of the commission as to whether it is preferable to adopt a general policy of guaranteeing interest on the amount invested, or of making a grant of lands from the public domain. Plausible arguments may be advanced both for and against each as compared with the other. In favor of land grants it may be said that the cession of even a considerable portion of the public lands involves no real loss to the Government or people; that as matters stand the lands, because of their inaccessibility, have little or no present market value and can not be utilized for any purpose. The construction of railroads would open them up to settlement and development, and thereby give them value. Whilst this would reimburse the corporation for its outlay, it would at the same time add to the general wealth and taxables of the country, and would also make accessible other portions of the public domain not donated, thereby bringing them into market and making them available for settlers and other purposes. It may be further stated that such grants would be most attractive to capitalists, because, assuming that the lands granted approximated the amounts given the Pacific railroads by the Government of the United States, their proceeds, when sold, would more than pay the cost of building the road.

As opposed to this consideration, it may be stated that there is always much popular prejudice against making gifts to private individuals or corporations of public property, however considerable may be the benefit accruing to the Government. There is always the feeling that such gifts are usually the result of favoritism or other improper influence, and that Government lands ought to be held for the benefit of home seekers. Without entering into a discussion of the soundness of this prejudice, the fact that it exists should not be overlooked and should be reckoned with.

Again, it is said that a policy which secures the construction of needed railroads without parting with Government lands gives to the latter the benefit of their increased value instead of to a few individuals. Another objectionable feature to be considered is the chaotic condition of all land titles in these islands and the consequent difficulty of obtaining information as to what land belongs to the Government and what to private individuals. As already stated, there has never been any Government survey of the lands of the islands. Private holdings are frequently based on Spanish grants and judicial proceedings, but far more often on long-continued possession or claim of title. But,

whether derived from the one source or the other, there is much vagueness as to boundary lines. It would be difficult, without such a survey, for the insular authorities to locate the lands so to be granted. To give railroads a roving commission to locate a given number of acres on any of the public lands, would not only be objectionable because it would give them the benefit of picking and choosing the most valuable land, but it would bring them into collision with private claimants, which might produce a bad impression on the Filipino mind as to the rectitude of our intentions.

Experience, moreover, in the United States has shown, when this policy has been pursued, even when surrounded with most elaborate and stringent conditions, and there has been a failure to comply with the obligation to build their roads for one reason or another, that years have elapsed and prolonged litigation ensued before the lands were declared forfeited and reclaimed.

The advantage of adopting the policy of the Government guaranteeing a low rate of interest lies in the fact that it presents to men of large means, seeking a permanent and safe investment, an attractive opportunity for obtaining it; because they are not only sure of a certain, even if not large, interest on their money, but, in addition, of the prospect of a larger return in the increased earnings of the road arising from the growth and prosperity of the country tributary to it. Secondly, the Government would by this course retain title to its lands and be enabled to distribute them among actual settlers at prices which would be reasonable to them and yet remunerative to it. Thirdly, the fact that the investment and the return thereon were absolutely certain would produce competition between capitalists and enable the Government to make more advantageous terms as to rates for the carriage of freight and passengers, length of franchise, right of purchase by the Government, division of profits, limitations as to salaries and expenses, provisions for Government supervision, etc., etc. Fourthly, it would enable the Government to determine the location of the various lines after taking into consideration both strategic conditions and the ultimate advantages to the general public, rather than the immediate income to be earned by the company.

The only objection which can be advanced against this policy is that the government would burden its revenues with a fixed charge. We believe that $55,000,000, and possibly less, would be amply sufficient to complete all the trunk lines presently needed in the islands of Luzon and Mindanao. We are further of the opinion that, with the guaranty of the insular government to pay 3 per cent interest, the necessary capital for their construction could readily be secured. The insular government would thus become responsible annually for $1,650,000, which would be a charge upon its revenues and which it would have to