and record of land titles is indispensable for the security of titles and for the development of the islands. The so-called "Torrens system," which has long been employed in all the Australian colonies and in New Zealand and has recently been made an optional provision of the laws of the States of Illinois, Massachusetts, and Minnesota, is believed to be especially adapted to the situation here, and it is the present purpose of the commission to enact a complete system of registration on the general lines of the Torrens system. INSULAR COLD-STORAGE AND ICE PLANT. Early in the year 1899, the Secretary of War having directed MajorGeneral Otis, then in command of the Division of the Philippines, to erect a refrigerating and ice plant in Manila, payment of the cost of such erection to be made from insular revenues, plans were entered upon for the construction of the plant. The estimated cost was $400,000. For reasons unnecessary to be stated in this report the expense of construction was far greater than was originally anticipated. The construction, and purchase of necessary material, machinery, and equipment were all carried on under the direction of the War Department and under the immediate supervision of a Regular Army officer detailed for that purpose. The plant was so far completed that its operation could be commenced in June, 1901, although after that time considerable work of construction was necessary and some is still necessary. The total cost, including the necessary equipment for taking beef and other supplies for the use of the army from ships and transporting them to the plant, and for delivering them where desired by the army, aggregated $656,680, gold values, all of which was paid from insular revenues. The plant has a capacity of about 428,000 cubic feet of cold storage and is capable of producing 1,200 or more tons of ice per month. The primary purpose of constructing the plant was to furnish ice and cold storage for the benefit of the Army of the United States. As the plant approached completion the question of its administration became one of large practical importance. The question was accordingly referred to the Secretary of War by the commission, and the Secretary of War determined that the plant should be transferred to the insular government and should be administered by it, but that it should make a contract for furnishing such ice and cold storage as should be needed for the use of the army in the Philippine Islands, the contract to be entered into by the major-general commanding on behalf of the army and by the commission on behalf of the insular government. Accordingly an agreement was entered into on June 20, 1901, between the commission on behalf of the insular government and Maj. C. P. Miller, quartermaster, of the United States Army, on behalf of the army, for the lease of 195,520 cubic feet of cold storage from July 1, 1901, to June 30, 1902, at a monthly rental of $15,000, gold; and at the same time another contract was made by the commission on behalf of the insular government and Col. C. A. Woodruff, assistant commissary-general, for a monthly supply of 350 tons of ice to the army from July 1, 1901, to June 30, 1902, at the rate of $10 per ton, provided that one-half of the amount received by the plant for ice sold to other parties over and above the 350 tons contracted for by the United States Army should be deducted from its ice bill. Both these contracts were by their terms subject to the approval of Major-General MacArthur, commanding. When these contracts were submitted to Major-General MacArthur he did not feel at liberty to approve them, in view of the fact that he was about to be succeeded by Major-General Chaffee, and left the contracts in suspense. Thereupon, in order that the army might immediately receive the benefit of the plant, a provisional contract was entered into between the same parties, which was approved by Major-General MacArthur, that cold storage and ice should be furnished in accordance with the terms of the two contracts above set forth until Major-General Chaffee should have an opportunity to review the subject, and a new contract or contracts should be entered into, if deemed advisable. The cold-storage space which had been previously provided for the benefit of the army, largely by refrigerating ships, and to some extent by private refrigerating plants in the city of Manila, was immediately made use of in the new plant, and it was ascertained that substantially the whole space provided for cold storage in the new plant would be needed for the use of the army, and that the original contract secured to the army very much less space than would actually be required. It also became apparent that 350 tons of ice per month would not meet the requirements of the army. The necessity for a revision of the contracts thus become evident. The theory of the original contracts had been that the army should pay enough to meet all the expenses of operating the plant, including a reasonable allowance for depreciation, and that if the insular government should be able to obtain further income from outside parties such income could be appropriated as interest upon its investment or as a sinking fund, to provide ultimately for reimbursement of money invested, subject always to the contingency of destruction by earthquakes, which is very possible, in view of the construction of the plant and the history of earthquakes in the city of Manila. In consideration of all the circumstances, a new agreement between the insular government and the army has been entered into, which agreement has received the approval of the commanding general, MajorGeneral Chaffee, by the terms of which the army takes the whole of 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 $15,012.58, 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 unduly burdensome to the Army or to the insular government, it can then be modified for the succeeding year as experience may demonstrate to be wise and just. The estimate of Captain Roudiez, who is now in charge of the plant under assignment from the Regular Army and who has had charge of its construction, is that the operating expenses for the succeeding quarter, commencing October 1, 1901, will be approximately $50,000, without making any allowance for accident, depreciation, or income upon the investment. So far as two months' operation can demonstrate, the plant is sufficient and capable of meeting the expectation of its designers. A copy of the lastnamed agreement now in force is hereto annexed and marked Appendix Q. CURRENCY NOW IN USE. In our last report it was stated that the abnormal conditions in northern China, together with the increased value of silver in the general market of the world, had increased the demand for Mexican dollars to such an extent that the Government deposit of Mexican currency in the local banks was being rapidly depleted, the silver being withdrawn for export to China and being replaced by money of the United States, and that if that process were allowed to continue without interruption the insular deposits of silver would become exhausted and it would be no longer practicable to maintain the uniform ratio of 2 to 1 which had been prevailing for several months preceding the date of that report, and that for the purpose of preventing further depletion of the insular deposits of silver acts had been passed providing for the payment of salaries under the civil service of the islands in money of the United States and imposing an export tax of 10 per cent upon Mexican dollars. Appropriations were likewise mainly made in money of the United States. As stated in the former report, the imposition of the customs-export tax on Mexican silver was a purely provisional and temporary measure for the purpose of enabling the Government to hold the ratio of exchange between the two moneys at a uniform rate until Congress should be enabled to provide a system of currency for the islands. Congress having taken no action upon the matter at its last session, the local legislation remained unchanged. Meanwhile the demand for Mexican dollars in China and other parts of the world became less and their market price diminished materially. These causes, coupled with the legislation referred to, began eventually to cause a large accumulation of Mexican and insular currency in the Government's deposit. The following table shows the amounts of the Government deposits in Mexican money and in money of the United States, at stated periods, from the 17th day of November, 1900, down to the 1st day of October, 1901, so as to form a complete record of those deposits, when |