PHILIPPINE CONSTABULARY.

Upon the assembling of Congress at its last session the Secretary of War presented the draft of a bill to promote the efficiency of the Philippine constabulary and to establish the rank and pay of its commanding officers, which was enacted into law, and approved January 30, 1903, in the following language:

[PUBLIC-No. 37.]

AN ACT to promote the efficiency of the Philippine constabulary, to establish the rank and pay of its commanding officers and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That officers of the Army of the United States may be detailed for service as chief and assistant chiefs, the said assistant chiefs not to exceed in number four, of the Philippine constabulary, and that during the continuance of such details the officer serving as chief shall have the rank, pay, and allowances of brigadier-general, and the officers serving as assistant chiefs shall have the rank, pay, and allowances of colonel: Provided, That the difference between the pay and allowances of brigadier-general and colonel, as herein provided, and the pay and allowances of the officers so detailed in the grades from which they are detailed shall be paid out of the Philippine treasury.

SECTION 2. That any companies of Philippine scouts ordered to assist the Philippine constabulary in the maintenance of order in the Philippine Islands may be placed under the command of officers serving as chief or assistant chiefs of the Philippine constabulary, as herein provided: Provided, That when the Philippine scouts shall be ordered to assist the Philippine constabulary, said scouts shall not at any time be placed under the command of inspectors or other officers of the constabulary below the grade of assistant chief of constabulary.

Approved, January 30, 1903.

At the time this bill, drafted by the Secretary of War, was under consideration by Congress Hon. Luke E. Wright, who held the portfolio of secretary of commerce and police in the Philippine Islands and who was also the vice-governor and had acted as governor for practically one year previous, was in the United States on leave of absence. Governor Wright had drafted the legislation for the Philippine Commission, organizing its constabulary forces, and his admirable presentation of the advantages of this bill undoubtedly had great influence in securing its passage.

It was hoped that the trial authorized by this act of Congress might demonstrate the best organization for a permanent native or Filipino auxiliary force. The time elapsed (less than one year) is not sufficient to permit the complete accomplishment of the desired purpose.

The annual report to the Philippine Commission of the chief of constabulary makes a wonderful showing of the work already accomplished by this native contingent. In my opinion experience has definitely demonstrated the fact that the natives under American officers are equal to any police work that will arise in the islands.

APPOINTMENT OF MILITARY COLLEGE GRADUATES AS THIRD LIEUTENANTS.

During the present year the civil governor of the Philippines forwarded with his approval the recommendation of the chief of the Philippine constabulary that this office take the necessary steps to secure annually at least ten graduates from the best State military schools in the United States for appointment as officers of the constabulary.

It was believed that the appointment of a number of young men who have completed the course at the best military institutions in this

country would promote the efficiency of the constabulary service. This Bureau entered into correspondence with officers of the Army detailed as commandants of cadets at the ten institutions which pay attention to military education, inquiring whether there were any graduates from their institutions whom they desired to recommend for a third lieutenancy in the constabulary.

In this manner ten graduates have been appointed to the Philippine constabulary in accordance with the express authority above referred to, as well as several other such graduates who made application growing out of the plan of appointment adopted by this Bureau.

From information received from Manila it is expected that this practice will bring advantageous results and will possibly have a direct bearing upon the future policy of this growing service.

PURCHASE OF SUPPLIES FOR THE PHILIPPINE GOVERNMENT IN THE UNITED STATES.

All supplies for the Philippine government bought in the United States are now purchased under the direction of this Bureau.

Prior to February 15 of the present year many of these purchases were made by a provisional arrangement, but owing to the great number of requisitions received and the constantly increasing demand for supplies to be purchased thereunder, it was found that the work could be satisfactorily performed only by some competent agency located in New York City. On the date above mentioned such a temporary agency was provided for by the appointment of an acting purchasing agent, as well as a clerical force, and the renting and furnishing of appropriate offices in the downtown business portion of New York City.

In working out the temporary organization of that office this Bureau had the benefit of the presence in New York of the insular purchasing agent, who was sent here from Manila by the civil governor on the request of this Bureau to allow him, by conferences here, to work out the best method of making these purchases and their safe transportation to the insular purchasing agent at Manila, who is charged with the entire purchases for the government of the Philippine Islands and all its executive departments and bureaus.

The Philippine law requires that all requisitions for supplies be made to this Philippine bureau, whereupon they are revised, combined, and sent to the civil governor for his action, and according to such action the purchases are made. Those to be made in the United States are forwarded by the civil governor to Washington with directions to purchase, whereupon they are again gone over upon their arrival at this Bureau, carefully recorded, entered in books, and then sent to the New York agency for purchases under practices similar to those followed in the United States. These purchases comprise every conceivable article. The system has been carefully worked out and satisfactory results have already been obtained. The insular purchasing agent has in the meantime returned to Manila with a joint report as to the best legislation for the permanent establishment of this New York agency to secure the desired results.

As a rule, supplies for the Philippine government have been bought f. o. b. New York and shipped under insurance to Manila. However,

and the preparation, advertising, and delivery of $6,000,000 of certificates of indebtedness cost $2,373.83.

The prices at which silver has been offered and accepted ranged from 49.10 cents per ounce, which was the first rate paid, to 60.47 cents per ounce. The average price per ounce for the period has been

55.193 cents.

COMPLETION OF BULLION PURCHASES.

In pesos, subsidiary, and minor coinage there have been shipped to Manila a total of 17,881,650, which the Philippine Commission have advised are ample for inaugurating the new Philippine coinage, when supplemented by the Spanish-Filipino coins in the islands, which are to be recoined. A recent careful estimate, after examination of the archives, shows, in the opinion of the Commission, that instead of the hitherto estimated Pfs.6,000,000 to Pfs. 8,000,000 there are from Pfs.11,000,000 to Pfs. 12,000,000 of this Spanish-Filipino coinage of all denominations in the islands.

It is the purpose of the Philippine Commission to demonetize Mexican currency on January 1, 1904, on which date the Commission purposes to take steps to get into the treasury all Spanish-Filipino coinage, ship same to San Francisco for recoinage into new Filipino coins, and reship to the islands by returning transport, thus giving an amount of about 28,000,000 in the new coinage, the minimum sum originally estimated as adequate for the initial circulation of the new coins, and which will, within the judgment of the Commission, furnish sufficient silver for recoinage to serve all purposes for a long time to come. The Commission has, therefore, with the approval of the Secretary of War, suspended further purchases of silver bullion.

SHIPMENT OF COINAGE TO MANILA.

This Bureau assumed entire charge of the delivery of these coins to Manila. The first shipment of Philippine coinage was made from the San Francisco mint by United States Army transport sailing May 1, 1903, consisting of P1,200,000. The first shipment from the Philadelphia mint was made on May 26, 1903, and forwarded via New York and thence by steamer to Manila, consisting of P2,000,000. The shipment of this completed coinage was a matter fraught with much risk and responsibility, demanding serious attention to protect the Philippine government from the embarrassment which would follow a loss, and at the same time to secure its expeditious transfer to Manila at the minimum cost.

In so far as shipments from San Francisco were concerned, with the cooperation of the military establishment, it has been the practice to designate some officer already under orders to proceed to the Philippine Islands to report to the superintendent of the mint at San Francisco thirty days prior to the date on which he had already been ordered to proceed to Manila. He is there required to daily superintend the packing of the Philippine coinage, and just prior to the monthly sailings of the transports the same is carried by him under military guard in Government wagons to the transport, where it is stored in a suitable compartment under proper guard, and upon arrival at Manila is delivered to the treasury of the Philippine Islands by the officer who has accompanied it from San Francisco. This practice has been satisfactorily followed with each monthly shipment.

It was found that the express charges for transportation from Philadelphia to San Francisco, in order to permit of the free water shipment via transports, were excessive. In view of the volume of the shipment and the condition of the insular revenues, it was necessary to provide, if possible, a more economical route. Thorough investigation and inquiry resulted in a method of shipment by express to New York and thence by steamer to Manila through the Suez Canal. The saving by the adoption of this route was approximately $5,000 for each million pesos, and when one considers that the probable ultimate coinage will exceed P50,000,000, the consequent saving on the amount shipped in this way, although the length of the voyage is some twenty-four days longer, can be appreciated.

INSURANCE.

It was also necessary that the Philippine government be safeguarded in every way possible against loss, as the loss of even one shipment, sometimes aggregating P2,000,000 to P3,000,000, would seriously embarrass the Philippine treasury. An exhaustive investigation was made as to the best and most economical means of affording this protection, and a special form of insurance has been placed on all shipments from San Francisco and Philadelphia, which guarantees the insular government against loss from all causes, including theft, from the time of the leaving of the vaults of the United States mints until the time of delivery into the treasury vaults at Manila. This form of insurance is also free from averages and other provisions generally contained in insurance policies, whereby payment is only made in case the loss exceeds a fixed percentage. The hitherto or ordinary rates for the insurance of bullion or standard moneys-treasure-would have entailed a large expense in the shipment of this coinage from the United States to Manila. In fact the best rate quoted to the Treasury Department was 55 cents per $100 bullion value, and it was necessary to finally go to the English Lloyds, where an insurance rate of 16 to 19 cents per $100 bullion value was secured for the first shipment, which after competition between New York steamship lines, was forwarded as cargo at the usual rate of $5.30 per ton. The weight of the first shipment was 65 tons.

Subsequent shipments have been made from Philadelphia, via express to New York and thence by steamer to Manila, the transportation cost of which since the first shipment has generally been based on a rate of one-eighth of 1 per cent, bullion value, and insurance not to exceed 20 cents per $100, bullion value, according to the condition of the insurance market.

Monthly shipments have been continued from San Francisco as already outlined. At this time there have been coined and forwarded P11,355,000 from San Francisco, and from the Philadelphia mint coinage of the denomination and value as follows:

Denomination.

Peso..
Fifty centavo..
Twenty centavo.
Ten centavo
Five centavo..

One centavo...

One-half centavo..

Value in pesos.

2,790,000 1,550, 000 1,070, 000 510,000 442, 500 106,000 59,750

6, 528, 250

TEMPORARY CERTIFICATES OF INDEBTEDNESS.

Section 6 of the coinage act authorizes the issuance by the Philippine government of temporary certificates of indebtedness to the extent of $10,000,000, of which not to exceed $3,000,000 at any one time can be used as a continuing credit for the purchase of silver bullion.

Immediately upon the passage of this act the matter of the preparation of these certificates was taken up with the Treasury Department. The Secretary of War cabled to Governor Taft recommending that temporary certificates of indebtedness to the amount of $2,000,000, gold, be authorized by the Philippine government and disposed of by this Bureau, and on March 23, 1903, Governor Taft advised the Secretary of War that the Philippine Commission had on that day passed an act authorizing an issue of $3,000,000, in conformity with the act of Congress, to bear interest not to exceed 4 per cent, payable quarterly, in the denomination of $1,000 United States currency, redeemable in gold coin of the United States not later than one year from the date of issue, to be disposed of at such rate of interest or premium as might be secured. The enactment also required that a full report of the action taken thereunder be made to the auditor and treasurer of the Philippine Islands.

At the request of the Secretary of War, the Secretary of the Treasury authorized the statement that the temporary certificates of indebtedness of the Philippine Islands "will be accepted as security for United States bank deposits whenever further deposits may be made, and may at any time be substituted for Government bonds now held as security for deposits on condition that the Government bonds thus released be used as security for additional circulation."

This statement, together with the fact that the act of Congress had exempted the certificates from all forms of taxation, led to the belief that a fair premium might be expected, in spite of the fact that they run but one year and bear 4 per cent interest. This belief was not shared by many of the leading financiers of the country, among them some public-spirited bankers, who, nevertheless, offered to underwrite the temporary certificates of indebtedness at par, or a slight premium, one-half of 1 per cent, and to market them without cost to the Philippine government. However, with the approval of the Secretary of War, it was decided to put this first issue of $3,000,000 of temporary certificates of indebtedness on the market to the highest bidder, giving everybody a chance to purchase. On April 1, 1903, a formal notice to bidders was given of this $3,000,000 issue, to date from May 1, 1903, the bids to be opened in this office in the presence of bidders on April 20, 1903. In the meantime, by the expeditious_cooperation of the Bureau of Engraving and Printing of the Treasury Department, the certificates were prepared and engraved in denominations of $1,000, bearing the vignette of Washington, with three coupons payable quarterly, bearing the signatures of W. H. Taft, civil governor, Frank A. Branagan, treasurer of the Philippine Islands, and attested, under authority of the Philippine Commission and the Secretary of War, by the Chief of this Bureau.

The widest publicity of the proposed sale of the temporary certificates of indebtedness was given by advertising in the leading American dailies and financial papers, with the satisfactory result that when the bids were opened on April 20, it was found that the issue had been a number of