REPORT OF THE GOVERNOR GENERAL.

MANILA, November 3, 1911. GENTLEMEN: I have the honor to present to the Philippine Commission the following report of the Governor General. This report is for the fiscal year ended June 30, 1911, except as otherwise stated.

The Philippine Islands were privileged to have as a guest the Hon. Jacob M. Dickinson, Secretary of War, during the early part of the fiscal year, an account of whose visit was made in the report of the Philippine Commission for the fiscal year 1910.

THE SECOND PHILIPPINE LEGISLATURE.

The first regular session of the second Legislature was held at Manila, beginning the 16th day of October, 1910, and ending the 3d day of February, 1911, the usual period.

As the opening of the second regular session came at the same time as the writing of this report, I insert here extracts from the message of the Governor General to the Legislature, which cover many of the points usually covered by the annual report of the Governor General, and cover them in sufficient detail for the purposes of this report:

The tranquillity throughout the Philippine Islands noted in my last message remains undisturbed. The recent death of the outlaw Otoy, the last pulajan chief in Samar, has brought it about that scouts which have been constantly maintained in that island may now be withdrawn, and the central district of the island, the progress of which has been somewhat retarded by the presence of this small band of outlaws, is now as free from disturbing influence as is any other portion of the islands.

A recent shortage in the rice supply of the Orient and an unexpected and very sharp rise in the price of rice at the time threatened to menace the tranquillity and good order of the islands. Acting under the advice of a committee of which the secretary of finance and justice was chairman and having representatives of the Government and business community, both Filipino and American, the bureau of supply has purchased a large number of tons of rice, much of which otherwise would have gone to China. The announcement of this action on the part of the Government resulted in an immediate reduction of the price of rice within reasonable limits throughout the islands and has put the main staple food of the islands within reach of everybody, as the price now is not so high but that the people generally can afford to take it. It is possible that this purchase will cause the Government some loss, but the end sought was so desirable that the undersigned feels confident that the action taken was in the best interests of the people.

The effect of the construction of railroads has been more beneficial even than had been hoped. The Manila Railroad Co., during the year, has opened up its lines to the following points: Batangas, on the Manila-Batangas line; San Pablo, on the Luta-Lucena line; Mojon, on the Calamba-Santa Cruz line; Santa Cruz, on the Noveleta-Naic line; and Rosales, on the Paniqui-Tayug line. The opening up of these lines had an almost magical effect in stimulating industry and fostering production; territory in which crops had not been harvested for years is now being cared for, and particularly in the Provinces of Batangas, La Laguna, and Tayabas the advent of the railroad seems to have made the difference between a backward and a progressive situation.

Estimated balance provided no further amounts are released
by the Governor General.

920, 039.76

As shown by the foregoing statement, the estimated insular revenue for the fiscal year 1912 is 25,236,600. The collector of internal revenue estimates that the receipts of his office during the year will be #8,900,000, an increase of about #600,000 over the receipts of last year. The insular collector of customs estimates the receipts of the bureau of customs at P15,500,000, which is a decrease of $1,000,000 from the actual receipts of last year. These estimates are conservative, and the receipts, if they continue at the present rate, will exceed this amount.

The total appropriations for current expenses for the present fiscal year amount to 19,468,000, and for fixed charges P3,400,000; 1,250,000 of the fixed charges is the annual contribution of the insular government toward the expenses of the city of Manila. The other fixed charges are interest on bonds of the insular government issued for public works and permanent improvements and guaranteed interest on bonds issued by the railroads.

The total appropriations for the fiscal year 1912 for public works and perinanent improvements amount to P6,227,000, all of which are to be paid out of the current revenues of the present fiscal year. The continuing appropriations for permanent improvements are $250,000 for strong-material schoolhouses. $750,000 for irrigation systems, and P500,000 for roads and bridges. Act No. 2059, which appropriated 4,354,000 for insular permanent improvements, provided that none of the appropriations authorized therein should be available for use until released by the Governor General. Of this amount only P670,000 has thus far been released, and the release of further amounts will be contingent on and governed by the amount of revenues received. Thus, as the matter now stands, unless further releases are made the government will

have a surplus of $920,039.76. But in case the continuing annual appropriations for irrigation and schools are not spent this year, the surplus at the end of the year should be about P2,000,000. In order to give some idea of the rapidity with which public works are now being constructed, the following data, showing the expenditures during the fiscal year 1911 for permanent improvements, will be of interest:

Expended from insular revenues_.
Expended from provincial revenues

Expended from municipal revenues (fiscal year ended Dec. 31,
1910).

Total

P7, 286, 000 2,786, 000

844, 000

10, 916, 000

It would be most unfortunate to stop public works to this extent, and the suggested legislation releasing P2,500,000 of the gold-standard fund is urgently recommended.

The Commission, in its exclusive capacity, has passed appropriation bills for current expenses of 1,288,200 and for public works and permanent improvements 372,400.

The Commission, acting in its exclusive legislative capacity, has established a sales agency to work up a market for the products of the schools and for the specialties manufactured by the non-Christian tribes and has appropriated the sum of 60,000 for the construction of a sales-agency building on the filled-in land near the new hotel now nearing completion. It is hoped with this to keep in touch with the markets of the world for those things made in the schools, such as laces, embroidery, hats, woodworking, etc., and to be able to put the bureau of education in touch with those lines of practical work which will command a market and will enable children upon leaving school to earn a living by reason of the things they have learned in the school. It is believed that this service could readily be extended to the children in the schools throughout the archipelago, and the matter is recommended to the consideration of the legislature, with a recommendation that the necessary legislation be made to give all the schools of the islands participation in these benefits.

ASSEMBLY RESOLUTION REQUESTING THAT A CONSTITUTION BE GRANTED.

On December 5, 1910, the Assembly passed a joint resolution requesting that the Congress of the United States recognize the right and power of the Philippine people to prepare and adopt a constitution of its own; that the Philippine Resident Commissioners in the United States sustain this aspiration of the Philippine people in the Congress of the United States and obtain from Congress the necessary legislation.

This resolution was presented to the Commission on December 8, 1910, and was reported by a select committee on January 5, 1911, with a recommendation that the resolution be laid on the table. The report of the select committee was adopted almost unanimously, the explanations of the votes being given on pages 341 to 347 of the Commission Journal, Second Philippine Legislature, special session, 1910, and first session.

EXECUTIVE BUREAU.

No important changes have taken place in this office during the year. The executive secretary was absent from November 7, 1910, to February 14, 1911, being called as a witness to the congressional investigation of the friar-lands administration. The work of the bureau has shown the usual steady increase, although the office force remains practically unchanged numerically. The new reenforcedconcrete addition for the records division has proved very satisfac

tory and, it is thought, reduces to a minimum any danger of fire destroying the records and archives of the Government. Certain changes have also been made in the offices of the Governor General and the special agents, which have proved useful. The report of the executive secretary, forwarded herewith, shows the work of the bureau in necessary detail.

HEALTH CONDITIONS.

Health conditions in the archipelago during the past year have been better than ever before. Cholera has been a lesser menace than during any previous year since American occupation, and no other dangerous epidemic has got headway in the islands.

The general hospital is now fully opened, in successful operation, and giving general satisfaction, and I believe Manila can congratulate itself on having the best-arranged and best-equipped hospital in the Orient.

The Southern Islands Hospital, at Cebu, will soon be ready for occupancy, and it is expected to bring within easy reach of the inhabitants of the Visayas the advantages which have so far been confined to those who are able to attend the Philippine General Hospital.

The recent discoveries in regard to the effect of polished rice on beriberi have enabled the Government to very greatly reduce that disease, and it has wholly disappeared in the Government-run institutions, such as prisons, the leper colony, and the asylums. It was found that polishing the rice removed a fine covering containing a nutritive substance, the lack of which brings about in people whose principal article of diet is rice a condition favorable to beriberi. While there is some doubt among scientists as to the exact cause of this phenomenon, it is fairly and conclusively proved that people fed on unpolished rice are not liable to contract beriberi.

The work of the Antituberculosis Society is steadily continuing, and progress is being made toward informing the people as to the methods of fighting the disease.

The leper colony has now probably reached the maximum number that it will ever have, about 2,500 persons, and the rapid death rate among these unfortunate people will from now on keep the size of the colony reduced. The number of new lepers in the islands is steadily decreasing, and it is believed within a few years the danger from this disease will be negligible.

EDUCATION.

The progress of education in the islands during the past year has been very satisfactory. The people are in thorough sympathy with the Government in its effort to improve educational conditions by increasing the number and improving the condition of schoolhouses and by making educational facilities available for as large a number of children as the Government can afford. The increase in the school attendance during the past year has been very satisfactory.

In order to meet the needs of the people special emphasis is now being placed on practical agricultural and industrial training, this