the present available cold-storage space in the plant at a monthly rental of 3 cents per cubic foot, making its total monthly rental for cold storage $15,012.584, and it is to receive as much ice as it may call for, up to the full capacity of the plant, at the price of $10 per ton.

It will be seen that the aggregate cost of the cold storage to the army under this new contract is substantially the same as under the first two contracts, but that the army receives very much larger space, so that the cost per cubic foot to the army is practically one-half what it was under the former contract, while the assured income to the insular government is substantially the same. The price of cold storage under this contract is far less per cubic foot than it has ever before been to the army here, and the price of ice is one-half what has heretofore been paid to local producers. The insular government also furnishes ice to all army officers and to civil employees at the same price, one-half cent per pound, gold.

It was the opinion of the commission that, in view of the very great expense of living in Manila, army officers necessarily stationed here and employees of the Government living upon modest salaries should receive the benefit of practically cost price for the ice, which is one of the prime necessaries of life here. The question of selling ice to other persons than those named has not been fully determined. It is not deemed just that a Government institution, erected out of taxes paid by the people, should enter into competition with industries before established and compelled to pay duty upon the coal and other material used in the manufacture of ice. During the two months of the operation of the plant its superintendent has sold ice to outside persons at 1 cent per pound, gold, delivered at the plant, while the private plants engaged in the business of manufacturing and selling ice sell it at 1 cent per pound delivered at the residence of the customer. It is thought to be no hardship upon local producers, and no unjust competition with them, to continue sales upon the basis named. It is apparent that the local dealers will control the market-in view of the fact that they deliver the ice at the residences of their customers, while the insular plant does not-provided they furnish equally pure ice and give full weight in their sales. The arrangement suggested can be considered as a competition only to the extent of securing a high deeree of efficiency and entire fair dealing on the part of the local producers and venders.

The contract with the Army expires on the 30th day of June, 1902, and its practical workings will, by the expiration of that time, have demonstrated the amount of space and the quantity of ice needed by the Army and will have made more certain the actual expense of operating the plant. If the contract is found to be in any respect

without interruption the insular deposits exhausted and it would be no longer practi form ratio of 2 to 1 which had been prev preceding the date of that report, and that venting further depletion of the insular d been passed providing for the payment o service of the islands in money of the Unite export tax of 10 per cent upon Mexican were likewise mainly made in money of the in the former report, the imposition of th Mexican silver was a purely provisional an the purpose of enabling the Government to between the two moneys at a uniform rate enabled to provide a system of currency f having taken no action upon the matter at legislation remained unchanged. Meanwhi can dollars in China and other parts of th their market price diminished materially. 1 the legislation referred to, began eventually lation of Mexican and insular currency in The following table shows the amounts of th Mexican money and in money of the United from the 17th day of November, 1900, dow ber, 1901, so as to form a complete record

taken in connection with the data given in the former report from the 18th day of August, 1900, to the 1st day of October, 1901:

STATEMENT OF PUBLIC CIVIL FUNDS.

Bank balances, semiweekly, from the 21st of November, 1900, to the 9th of October, 1901.

The fact was stated in the former report that the local banks refused to receive deposits in money of the United States and required all such money to be exchanged into local currency before being deposited, commission being charged for exchange. Hence depositors were not able to withdraw their money in United States currency, but only in local currency, and if they wished United States money to use were obliged again to repurchase it from the banks, paying a commission for the exchange. This method of business was regarded as a discrimination against money of the United States, and accordingly, on the 28th day of November, 1900, act No. 53 was passed, requiring banks of deposit in the islands to accept deposits both in the money of the United States and in Mexican or local currency, and to repay such deposits by checks or otherwise in the kind of money in which they were made, but guarding the banks against being required to accept small and unprofitable deposits in any currency. This act, although . unsatisfactory to the banks and by them called to the attention of the War Department, was approved by the War Department as a useful regulation of banking institutions, and has furnished great relief to all business men in the islands. Nor is it any hardship upon the banks. It simply deprives them of a kind of profit which it was unjust for them to reap, in view of the fact that they were gaining it by a discrimination against the money of the sovereign power in the islands. The effect of the military order referred to in the former report, authorizing the exchange of 2 pesos of local currency for $1 of money of the United States, coupled with the legislation referred to, to secure equal facilities for the deposit and payment of both currencies in the local banks, and the payment of sums due from the insular government to employees and others mainly in money of the United States, has been to secure an entirely stable currency throughout the islands since the 11th day of August, 1900, down to the date of this report, and it is considered that the securing of this result has been of very great advantage to all the people of the islands. At the present time the value of Mexican dollars as compared with gold is such that a dollar of money of the United States is worth something more than 2 pesos of local currency; but it has been considered of such importance to maintain a uniform ratio between the two temporarily, until Congress shall act upon the currency question, that the civil governor has fixed by proclamation the ratio of 2 to 1 between the two currencies for the ensuing quarter, commencing the 1st day of October, 1901. The effect of this order will probably be that importers and others having taxes to pay to the government will meet those payments almost wholly in local currency, and thereby the insular government will sustain a certain loss; that is, it will receive less intrinsic value than it would if the payments were all required to be made in gold, or if the ratio of $2.02 or $2.04, insular currency, to $1, money of the United