pay, provided all the lines were able only to earn their operating expenses. Even were this true, it is believed the increased taxable values thereby created, to say nothing of the saving in the cost of transportation of troops, civil officials, mails and government freights would probably more than meet the outlay. It is not, however, within the range of probability that properly located railroads would only pay operating expenses. On the contrary, it is believed that under wise management, as already stated, several of the lines, perhaps half of them, would pay from the beginning as much as the government guaranty, and would probably do better than that, and that ultimately all would earn as much as, or more than, the government guaranty.

It may be well, as an interesting contribution to this discussion, to call attention to the circumstance that all of the trunk lines of the East Indian Railroad district were constructed upon this basis. Under the administration and direction of Lord Dalhousie, the Indian government thus brought to its aid English capital and within a very few years there were built a number of great trunk lines, carefully and intelligently located with reference to military and commercial necessities, which, besides advancing marvelously the commerce and wealth of India, settled for all time the supremacy of the English in that great empire. The rate of interest was in that day much higher than now and, accordingly, the government guaranteed a minimum rate of 5 per cent, with the proviso that, after earning that sum, the excess should be equally divided between the company and the government. The right of purchase was reserved to the government after the lapse of a term of years and the right of governmental representation and supervision was provided for. The predictions made by Lord Dalhousie that this policy would cost the government nothing and that it would give an extraordinary impetus to domestic and foreign trade, and especially to the exchanges between England and India, were more than verified and did more for the advancement of India in a decade than had been accomplished in the preceding one hundred years.

It will be seen from what has been said that the commission, if it had authority to act, would, wherever necessary to secure the desired railroads certainly as to the island of Luzon and probably as to Mindanao-prefer to secure the capital required for construction by guaranteeing thereon a low rate of interest. It may turn out, however, as to the latter island and also as to the islands of Paragua and Mindoro, which are much in the condition of Mindanao, that this course would not be best or even feasible, and that a subsidy in the form of a donation of lands, or both a guaranty of interest and a donation of lands, might be in the public interest. In these last named islands the amount of land held by the Christian natives, as compared with the P C 1901-PT 1- -5