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province, as*fche occasion required, to assist in important prosecutions or to investigate matters pertaining to the administration of justice in courts of first instance.


A new criminal code has been prepared by Commissioner Wright and reviewed by him, together with the president of the Commission and Commissioner Ide, the lawyers of the Commission. It is now substantially ready for enactment, and will come up for public hearing within a very few weeks, and doubtless will be enacted and in force before the 1st day of January, 1903. Comment thereon will be reserved till another report.


A new code of criminal procedure has been prepared by Commissioner Wright; but it has not yet been practicable for the Commission to act upon it, owing to the pressure of other work. It will, however, be enacted at the earliest practicable moment.


A bill of 128 sections has been prepared by Commissioner Ide applying to the Philippine Archipelago substantially the principles of the Torrens system of land registration. The bill has been considered in public session, and, after discussion and such amendments as seemed warranted by reason of the discussion, has been passed and goes into effect on the 1st day of January, 1903. The enactment of such legislation here is of the highest importance. Titles and boundaries at present are so uncertain that capital is deterred from investment by reason thereof, important enterprises that otherwise would be undertaken are not entered upon, and rates of interest for loans upon real estate are exceedingly high and loans on such security are often impossible to secure at any rate of interest. The evils of the present system are:

1. Great expense in the investigation of the title and in the transfer.

2. Delay, which often extends so long in the investigation of the title as to prevent a prospective sale.

3. Insecurity. Enormous numbers of homes in the islands are owned without any written evidence of title whatever, and where there is written evidence of title boundaries are uncertain. The opinions of lawyers who investigate titles furnish little security.

4. There is a constant lengthening of the chain of deeds to be examined, increasing the expense and delay.

5. These defects operate as a perpetual tax upon the holder of real estate, depreciate its value, and make it an exceedingly slow asset.

Under the Torrens system, as proposed to be established here, the land owner receives a certificate after due investigation of the title by a tribunal instituted for that purpose, which certificate is as simple as a certificate of stock in a corporation, showing on its face in whom the title is vested and also all the liens or other interests existing in the premises. The correctness of this certificate is guaranteed by law, the government standing back of it, and having an assurance fund, created by imposing upon those who bring their lands under the system a small percentage of the value of the land at the time the land is brought under the operation of the act, which accumulated fund operates as a fund to which anyone who loses his land by reason of the act may resort for indemnity. The advantages of the system may be briefly stated thus:1. Diminution of expense.—The expense of the official registration probably will not exceed the cost of a single transfer under the present system, and in all subsequent transfers the expense will be much less than now.

2. Speed.—In the generality of cases the transfer or mortgage, including the examination of titles, may all be completed in a very short time, and without the aid of counsel.

3. Security.—The title is cleared at every transfer; there is no long chain of deeds to be examined, and the title is guaranteed by the law and is unassailable.

4. No deeds are recorded; the original or duplicate deed is filed and left with the register, whereby the records are greatly shortened.

5. Such a safe, short, and inexpensive method of transfer increases the value of the land, and makes it a much quicker asset, and one upon which money can be borrowed at a lower rate of interest.

The general principles of the act perhaps may be briefly stated thus:

1. An examination of title by a court of competent jurisdiction, after actual notice to all occupants and adjoining owners, and constructive notice to all the world by publication.

2. Registration of the title as found upon such examination.

3. Issuance of a certificate of title.

4. Reregistration of title upon further subsequent transfer.

5. Notice upon the certificate of any matter affecting the title, claims not registered having no validity.

6. Indemnity against loss out of an assurance fund.


This plant was originally erected out of insular funds, by direction of the Secretary of War, primarily for the purpose of furnishing ice for the use of the army and navy in the Philippines. Having been built from insular funds, it was upon its completion, by direction of the Secretary of War, passed over to the insular government for administration. The contract made between the insular government and the military authorities for the fiscal year 1902 has been, with minor changes, renewed for the fiscal year 1903. Under that contract the army receives ice at the rate of one-half cent per pound and cold storage at the rate of 3^ cents per cubic foot per month, which prices have resulted in saving practically one-half the expense for ice and cold storage by the army in the Philippines.

The navy in these islands receives such ice and cold storage as it requires at the same prices. Likewise employees of the civil government and officers and soldiers of the Army of the United States are entitled to purchase ice at the same price of one-half cent per pound. It has not been deemed advisable to enter into general competition with existing industries for the sale of ice and cold storage to the general public, but ice has been furnished to such people as cared to go to the plant to receive it at 1 cent per pound, all moneys herein stated being moneys of the United States.

A full and complete report of Capt. Leon S. Roudiez, superintendent of the insular cold storage and ice plant, of its revenues and expenditures for the fiscal year ending June 30,1902, is hereto annexed and marked "Exhibit II."

The supplemental report of Captain Roudiez is also annexed and marked "Exhibit III," bringing the report down to the 31st day of August, 1902. From these exhibits it appears that the total revenues from July 1, 1901, to August 31, 1902, were $365,689.45, and the total expenditures for the same period were $218,739.70, leaving an excess of revenues over expenditures of $146,949.75.

The total cost of the construction and equipment of the plant down to the 1st day of September, 1902, including some new erections now in process of construction, is $689,336.38.

In addition to this cost the following elements need to be taken into consideration: First, in the figures above given nothing is included for the value of the lot upon which the plant stands. The lot is situated upon the Pasig River, between two of the bridges across it, and occupying the whole space between the two bridges, and having a long frontage upon the principal street and a long water frontage so that supplies can be loaded and unloaded directly upon and from barges and lighters upon the river. Secondly, the materials for its construction and equipment were all imported free of duty, and much of the material was transported upon the army transports without charge for freight. It is considered a conservative estimate to say that it would be impossible for a private individual or corporation to procure as eligible a site as the one in question and to import the material necessary for the construction and equipment, paying duties and cost of transportation, for less than $1,000,000 in United States currency.

If the property were owned by a private individual or corporation it would doubtless enter into competition with the existing establishments for the supply of ice and cold storage to the general public, and could be made to earn a larger revenue than at present accrues. It is probable that with the reduction of the United States Army in the Philippine Islands its demand for cold storage may decrease. In such case it maybe necessary to increase the price of cold storage per cubic foot, the present price having been fixed upon the basis of securing a known and certain return on the property. Should it be deemed advisable by the War Department, the plant could probably be sold at a satisfactory price, with sufficient safeguards to secure ice and cold storage for the Army and Navy and civil employees at reasonable prices. At present there are no practical difficulties in the way of the existing system of administration by the Government. The objections to it are mainly theoretical, on the ground that the Government is engaging in a business that ordinarily is conducted by private enterprise.


The unsatisfactory condition of the currency now in use in the Philippine Islands is universally conceded by all who are familiar with the facts. No subject connected with the work that is being done here is more pressing for Congressional action than this. The industries of the islands are largely paralyzed by the uncertain and shifting character of the currency. It is impossible for business men to forecast success or failure in their enterprises when they have no stable standard of values. Business men become timid in their transactions, or altogether refuse to make investments, when they have and can have no knowledge as to the value of the returns that will come to them. The uncertainty largely increases the rate of interest on money loaned. The man who one year ago loaned money in local currency, and payable in the same currency, at 25 per cent interest, would receive less than 5 per cent actual interest upon his money, more than 20 percent having been swallowed up in depreciation in the value of the money that would be returned to him. Such a system is ruinous to both the borrower and the lender.

Government employees complain bitterly that their salaries are reduced because they are paid in local currency, and its value has been steadily depreciating for one year. The insular government finds itself facing a deficit by reason of the shrinkage in the purchasing power of its assets. The constant depreciation in the value of silver, and consequently in the value of local currency of the islands, has been one of the greatest hindrances to business enterprises and to the successful administration of the government, and it is impossible, from any information available, to make any forecast as to whether silver in the markets of the world is to continue to depreciate or whether the bottom has been reached; but it is easy to forecast the results that in any event will ensue from its fluctuating character, which undermines all business calculations.

There is no relief except in a stable currency, and the only stable currency possible is one based upon a gold standard. The Commission in its two former reports urgently recommended the establishment of a gold standard by the coinage of a United States-Filipino peso of the value of a half dollar, money of the United States, containing a small percentage less silver than the Mexican dollar, the percentage being such that its intrinsic value would not at any time warrant its export from the islands for bullion, with a provision for its convertibility into money of the United States at the fixed ratio of two Filipino pesos for $1 in money of the United States, together with convenient subsidiary and minor coins. This recommendation I renew and respectfully urge as the best solution of the currency problem here existing.

A brief summary of the operation upon insular finances of the depreciation in silver in ten months past will show to some degree the difficulties to which the government has been subjected from this cause. During the whole of the calendar year 1901 the government undertook to maintain a uniform ratio for official purposes of $2 of local currency for $1 of money of the United States. But, owing to the depreciation of silver during the latter portion of the year 1901, when January 1, 1902, arrived it was apparent that the official ratio could no longer be maintained at 2 to 1, the revenues upon such a basis being substantially all paid in local currency, because it was much more profitable to use the United States money to purchase local currency than to pay the duties and other taxes in United States money.

Consequently, on January 1, 1902, the official ratio was changed from 2 to 1 to 2.10 local currency to $1 of United States money, the effort being to establish the official ratio upon the same basis as the commercial ratio. But the official ratio at that time, by orders received from the Secretary of War, was fixed for each quarter. It soon became apparent, however, that the local currency had been overvalued in this adjustment, and that the depreciation in silver was still continuing. Public duties in consequence were paid almost wholly in local currency at the official ratio. This depreciation continued throughout the whole of the quarter ending with the 1st day of April, when the ratio wasagain changed for the succeeding quarter to 2.27 local currency to $1 United States currency. Prior to this time Congress had in the act entitled "An act temporarily to provide revenues for the Philippine Islands, and for other purposes," approved March 8, 1902, provided that the ratio between the two currencies should be fixed once a quarter by proclamation by the civil governor, and it was not in the power of the Commission to change this provision. The ratio of 2.27, as it proved, largely overvalued local currency, taking the period of the whole quarter, so that the commercial value of local currency almost immediately ran below the official value. On the 1st day of July, 1902, Congress passed an act entitled "An act temporarily to provide for the administration of the affairs of the civil government in the Philippine Islands, and for other purposes," wherein it was provided, among other things, that the official ratio between the two currencies might be fixed by proclamation of the governor as often as once in ten days.

The same causes that have above been stated continued to operate, and on July 7 the ratio was changed from 2.27 to 2.35 local currency to $1 United States currency. The same causes continued during the quarter, and on September 23 another change was made from 2.35 to 2.40 local currency to $1 of money of the United States. The same causes continued to operate, so that on the 22d day of October it became necessary again to change the ratio from 2.40 to 2.46 local currency to $1 of money of the United States.

The details of these changes and their effects down to September 30, 1902, are shown in the auditor's report and supplemental statement annexed hereto, and marked, respectively, "ExhibitsIVand V."

Each one of the changes in the ratio necessarily operated upon the value of all the local currency in the treasury, and required that the treasurer should at each change be credited with the net amount sufficient to balance the loss thus occasioned. Between January 1,1902, and October 25, 1902, the aggregate of those losses was $956,750.37^-, measured in gold dollars, every dollar of which is, not a book loss, but an actual loss, to the treasury, as complete as though the money had been sunk into the bottom of the ocean. The receipts having nearly all been in local currency, because of its overvaluation, during the whole of the ten months referred to, each change marked a diminution in the value of the currency in the treasury. Local currency was necessarily used for the purchase of commodities and payment of salaries and expenses by the insular government—its capacity to purchase such commodities, to pay such salaries and expenses, during that period, unavoidably diminished by the great sum above stated. If the currency had been stable, upon the basis recommended by the Commission, all this loss would have been saved, there would have been no danger of a deficit, and much needed public improvements, to the value of nearly $1,000,000, could have been made which now can not be undertaken.

There are other great embarrassments in a fluctuating currency as imposed upon the government, aside from the actual loss above stated. It is impossible to communicate the changes of ratio to the remote points of the islands immediately upon making the changes; it requires weeks for the information to reach remote points where communication is uncertain and infrequent; and necessarily the receiving and disbursing officers are proceeding, till they receive the information, upon a false basis, and meet with great trouble in the settlement of their accounts with the auditor. Likewise, there is a

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