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General Otis and to all the American authorities by the wisdom of his suggestions, and the courage and earnestness with which he upheld the American cause as the cause most beneficial to his country. Señor José Luzuriaga was a member of the first government of the island of Negros, organized while there was insurrection rife throughout the islands, as an independent government under the supervision of a military governor, and was most active in preventing the insurrection from gaining any foothold in that important island.

The commission has organized from time to time various bureaus and offices for carrying on the business of the central government. Your order appointing Mr. Lawshe auditor, and the laws which were passed at your and his suggestion by the commission, have placed the accounting departments of the government on a most satisfactory basis. His experience in Cuba and in the departments of the United States Government has been invaluable to the commission. It has been an herculean task for him to readjust the system which was hastily constructed under the pressure of war, and to restate all the accounts when there was necessarily considerable looseness in the expenditure of the public civil funds by officers charged at the same time with duties both military and civil. A man engaged in fighting in the field all day is not likely to be as accurate and as careful in the keeping of his accounts as a civil official who has nothing else to do. That irregularities crept in was to be expected, but it is gratifying to know that the auditor has discovered no corruption. His chief criticism is against the manner of keeping the accounts, which he has thoroughly reformed and put upon the same basis as that which obtains in the United States.

We have also been fortunate in securing the services of Mr. Frank A. Branagan as treasurer of the archipelago. He accompanied the commission as disbursing officer and official accountant. He had long been disbursing officer of the State Department, and for years prior had filled the same position in the Department of Justice. He was entirely familiar with the methods of governmental deposits and the custody and disbursement of money. He was able, therefore, to assist Mr. Lawshe in reforming methods of accounting, and has been especially useful in supervising and restricting the expenditures of provincial offices, a duty enjoined on him by the provincial law.

The other bureaus and offices need not here be referred to, but attention will be called to them at a later part of this report. It will be sufficient to say here that by an order of President McKinley which went into effect September 1 the four members of the original commission were made the heads of four executive departments, which embraced within their supervisory control all the bureaus and offices of the government, except those which were retained for the personal

P C 1901-PT 1-- -2

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direction of the civil governor. The central government as at present constituted is thus organized:

A civil governor, having general supervision over the four executive departments and having direct supervision over the following:

The civil governor; an executive secretary; the civil service board; the insular purchasing agent; the municipal and provincial governments. The department of the interior.-The bureau of health; the quarantine service of the marine hospital corps; the bureau of forestry; the bureau of mining; the bureau of agriculture; a bureau of fisheries; the weather bureau; the bureau of non-Christian tribes; the bureau of public lands; the bureau of government laboratories, and the bureau of patents and copyrights.

The department of commerce and police.-A bureau of island and inter-island transportation; the bureau of post-offices; the bureau of telegraphs; the bureau of coast and geodetic survey; a bureau of engineering and construction of public works other than public buildings; a bureau of insular constabulary; a bureau of prisons; a bureau of light-houses; a bureau of commercial and street railroad corporations, and all corporations except banking.

The department of finance and justice.-The bureau of the insular treasury; the bureau of the insular auditor; the bureau of customs and immigration; the bureau of internal revenue; the insular cold storage and ice plant; a bureau of banks, banking, coinage and currency, and the bureau of justice.

The department of public instruction.-The bureau of public instruction; a bureau of public charities, public libraries, and museums; the bureau of statistics; a bureau of public records; a bureau of public printing, and a bureau of architecture and construction of "ublic buildings.

THE INSULAR PURCHASING AGENT.

An important bureau which the commission has found it necessary to create is that of the insular purchasing agent. The supplies needed in the provincial governments and in the various offices of the central government are so many and various and it is often so difficult to procure what is needed without sending to the United States for it, that it has been found necessary to require by law that all purchases of supplies for the provincial and central governments should be made through one person. He is furnished with a large sum of money with which to buy a stock of the supplies likely to be needed and is empowered to sell them to each province and bureau which needs them and to charge them the cost price with 10 per cent added. To him also is intrusted the duty of making contracts for official transportation over the steamship lines of the islands and also of furnishing the official cab transportation in the city of Manila. The office is a most impor

tant one.

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The information which the incumbent has as to the proper method of purchasing at reasonable rates is a source of much economy to the general government.

COMMITTEES OF COMMISSION.

The commission, with its new members, has reorganized its committees, which are as follows:

Agriculture and Fisheries.-Commissioner Luzuriaga, chairman; Commissioners Worcester and Tavera.

Appropriations.-Commissioner Ide, chairman; Commissioners Luzuriaga and Tavera.

Banking and Currency.-Commissioner Luzuriaga, chairman; Commissioners Ide and Legarda.

City of Manila.-Commissioner Legarda, chairman; the president and Commissioner Ide.

Commerce.-Commissioner Wright, chairman; Commissioners Luzuriaga and Ide.

Franchises and Corporations.-Commissioner Wright, chairman; the president and Commissioner Legarda.

Health.-Commissioner Tavera, chairman; Commissioners Worcester and Moses.

Judiciary.-Commissioner Ide, chairman; Commissioner Wright and the president.

Municipal and Provincial Governments.-Commissioner Tavera, chairman; the president and Commissioner Worcester.

Non-Christian Tribes.-Commissioner Worcester, chairman; Commissioners Tavera and Wright.

Police and Prisons.-Commissioner Wright, chairman; Commissioners Legarda and Moses.

Printing.-Commissioner Moses, chairman; Commissioner Tavera and the president.

Public Instruction.-Commissioner Moses, chairman; Commissioners Tavera and Worcester.

Public Lands, Mining, and Forestry.-Commissioner Worcester, chairman; the president and Commissioner Luzuriaga.

Taration and Revenue.-Commissioner Legarda, chairman; Commissioners Ide and Moses.

GENERAL THEORY IN FORMATION OF THE GOVERNMENT.

The theory upon which the commission is proceeding is that the only possible method of instructing the Filipino people in methods of free institutions and self-government is to make a government partly of Americans and partly of Filipinos, giving the Americans the ultimate control for some time to come. In our last report we pointed out that the great body of the people were ignorant, superstitious,

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and at present incapable of understanding any government but that of absolutism. The intelligence and education of the people may be largely measured by knowledge of the Spanish language. Less than 10 per cent of the people speak Spanish. With Spaniards in control of these islands for four hundred years and with Spanish spoken in all official avenues, nothing could be more significant of the lack of real intelligence among the people than this statement. The common people are not a warlike people, but are submissive and easily-indeed much too easily-controlled by the educated among them, and the power of an educated Filipino politically ambitious, willing to plot and use all the arts of a demagogue in rousing the people, is quite dangerous. The educated people themselves, though full of phrases concerning liberty, have but a faint conception of what real civil liberty is and the mutual self-restraint which is involved in its maintenance. They find it hard to understand the division of powers in a government and the limitations that are operative upon all officers, no matter how high. In the municipalities, in the Spanish days, what the friar did not control the presidente did, and the people knew and expected no limit to his exercise of authority. This is the difficulty we now encounter in the organization of the municipality. The presidente fails to observe the limitations upon his power, and the people are too submissive to press them.

In this condition of affairs we have thought that we ought first to reduce the electorate to those who could be considered intelligent, and so the qualifications for voting fixed in the municipal code are that the voter shall either speak, read, and write English or Spanish, or that he shall have been formerly a municipal officer, or that he should pay a tax equal to $15 a year or own property of the value of $250. It has been proposed, and the commission will probably adopt an amendment in accordance with the proposal, that the payment of a tax of more than $15 as a license for a saloon shall not constitute a qualification. In fixing these qualifications we followed the recommendations of all the Filipinos whom we consulted, except that there were many of them who advocated a higher qualification. Many of the common people will be brought within these qualifications in one generation by the widespread system of education which is being inaugurated, and thus gradually the electorate will be enlarged. Meantime, it is necessary by practical lessons and actual experience to eliminate from the minds. of the more intelligent part of the community who form the electorate those ideas of absolutism in government and to impress the conception of a limitation upon power which it is now so difficult for them to understand.

In addition to the defect spoken of there is another. This is an absolute lack of any sense of responsibility on the part of a public officer to the public at large. Office has always been regarded as a source of

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private profit and as a means of gratifying private desires, either hate or friendship. We have thought that by establishing a form of municipal government practically autonomous, with a limited electorate, and by subjecting its operations to the scrutiny and criticism of a provincial government in which the controlling element is American, we could gradually teach them the method of carrying on government according to American ideas. In the provincial government Filipinos are associated intimately with Americans, and in the central government the same thing is true. As the government proceeds this association in actual government will certainly form a nucleus of Filipinos, earnest, intelligent, patriotic, who will become familiar with practical free government and civil liberty. This saving remnant will grow as the years go on and in it will be the hope of this people.

How long, it is asked, must this education be continued before real results will be accomplished? Of course it is impossible to tell. Certainly a generation—perhaps two generations-will be needed, though a thorough system of public education, the introduction of railways and the intercommunication of all sorts, and the rapid material development of the country, which is quite possible, would greatly assist in this instruction. The Filipino people are not a stupid people. They are bright and imitative. They are quick and anxious to learn and are ambitious. They lack in persistence and power of application, but we are by no means discouraged at the prospect of successfully fitting them for self-government. As it is now, however, the one fact which is clear above every other is that these people are not-either the small minority of educated people or the very large majority of ignorant people-prepared to establish a government which would hold together for any length of time, and which would not in a very short time present all the oppression and all the evils which were known in Spanish times.

It is perhaps right that we should express our views as to the wisest course for Congress to take at the coming session. We think that if Congress were to give the present government the benefit of Congressional authority to continue under the limitations which it now has by virtue of the President's instructions until January, 1904, this would probably give time enough to form a complete government as a going concern, and at the end of that time provisions might well be made for a change in the form of the government, so that it should consist of a civil governor, of a legislative council, and of a popular assembly chosen by a limited electorate. There should be these limitations upon the power of the popular assembly, to wit, first, that it should sit annually for three months, from the 1st day of January to the 1st day of April, and then that its power of legislation should cease in each year unless summoned for a definite period in special session by the governor; secondly, if during the three months of its