smoothly together. When American bishops want parish priests they will send to America for them, and not to Spain. In fact, it was only when the Administration secured its own ends by other than direct means that consent was given to waive this original condition of the proposition to purchase the lands. As a practical matter the friars have been removed from the Philippines more rapidly within the past eighteen months than the conditions imposed in the form of contract submitted by Governor Taft to the Vatican authorities demanded. There seems to be no reason to suppose that there will be fifty friars in the Archipelago within ten years. It seems clear that it is better to accomplish their removal in this way than to do it by force.

It is now less than a week since the lands were bought. Already the papers are drawn at the dictation of Governor Taft, and signed by the four paties who now stand as legally invested with title. These are:

"(1) The Philippine Sugar Estates Development Company, owning and representing the Dominican lands; "(2) The Sociedad Agricola de Ultramar, owning and representing the Augustinian lands;

"(3) The British-Manila Estates Company, Limited, representing the Imus Estate, of eighteen thousand hectares, in Cavite province;

"(4) The Recolleto Order, owning twenty-three thousand and nine hectares of land, in an estate in Mindoro.

"The organizations selling the property are bound to furnish satisfactory evidence of their titles, but if there are others who have any lawful titles to the property their claims will not be extinguished by the bargain between the government and the friars.

"In case litigation should arise, however, the government will be at liberty to choose its forum, which may be a Court of First Instance, or the Court of Land Registration.

"In no case will any claimant be able to get his case into any United States Court, as the United States Federal Government is not a party to the transaction.

"The sale can not be consummated until the government has received the proceeds of its bonds, which must be engraved, advertised, sold and the proceeds transferred to Manila."

The lands so bought will be sold by the government in small parcels, tenants now on the land being given the first right of purchase. Within five, or at most ten, years these tenants will become proprietors.

CHAPTER XVIII.

PHILIPPINE FINANCE.

IN no one way could the facts of pacification and the establishment of civil government be so fully and convincingly set forth as by a brief statement of the financial situation. The collection of taxes, the systematic audit of accounts of every sort in all the provinces, and the steady extension of agricultural operations as proved by the rapid increase in exports of hemp, sugar, and copra, all combine to make it abundantly clear that American rule is to-day more nearly universal in the Philippines than Spanish rule ever became.

All the facts set forth in the statistics which follow are taken from the latest reports of the insular auditor and collector of customs, while the government currency expert, Mr. E. W. Kemmerer, has furnished me with a brief statement of the present status of the currency situation.

"TREASURY STATEMENT.

"Comparative Treasury Statement, Fiscal Years 1899, 1900, 1901, 1902, and 1903.

"The following is a comparative statement of deposits and withdrawals at the insular treasury by fiscal years since the date of American occupation in August, 1898, to June 30, 1903. The treasurer's account for the fiscal year 1903, elsewhere stated in the currencies actually involved, is here for purposes of comparison converted at the ratio of $2.45 to $1, the official ratio at the close of the fiscal year, which also may be considered a fair average ratio for the year. From this statement has

been excluded the sum of $455,093.49, the estimated United States currency value of seized funds in the treasury, treated in former statements as a part of the treasurer's balance until June 30, 1901, at which time the funds

were taken over to a special account:

It will be seen, from the above summary of receipts and expenditures, that the custom-house furnishes about two-thirds of the actual income. Internal revenues supply a very small percentage of the total receipts, as industries are but slowly recovering from the utter prostration caused by war, rinderpest, cholera, locusts, and scant rainfall. It should also be borne in mind that under the Provincial and Municipal Codes, revenues derived from all taxes of an internal character are ceded

* To convert into United States currency and find complete totals, divide all Mexican currency by 2.45, the average rate of exchange for 1902-03, and add the quotient to the total as expressed in United States currency.