erty right; that if it becomes necessary for the public interest of the people of the islands to dispose of claims to property which the commission finds to be not lawfully acquired and held, disposition shall be made thereof by due legal procedure, in which there shall be full opportunity for fair and impartial hearing and judgment; that if the same public interests require the extinguishment of property rights lawfully acquired and held, due compensation shall be made out of the public treasury therefor; that no form of religion and no minister of religion shall be forced upon any community or upon any citizen of the islands; that, upon the other hand, no minister of religion shall be interfered with or molested in following his calling, and that the separation between state and church shall be real, entire, and absolute.

Three religious orders, the Dominicans, Augustinians, and Recolletos, who were established under Spanish rule, had at the time of American occupation a holding of about 403,000 acres of agricultural lands. These lands are occupied by a native tenantry intensely hostile to the friars, and that hostility is unquestionably shared by the vast majority of the people of the islands. The relation of these landlords to their tenants and to the entire people was one of the chief causes of irritation and rebellion under the Spanish Government.

The new conditions make it manifestly for the interest of the religious orders that they should convert into money this property, which they can manifestly no longer peacefully enjoy or practically make useful. At the same time the peace and order of the community, the good will of the people toward the Government of the United States, and the interest of an effective settlement and disposition of all questions arising between the church and state in the islands, make it equally desirable that these lands should be purchased by the state and that title upon proper and reasonable terms should be offered to the tenants or to the other people of the islands. For this purpose it will be necessary that money should be obtained from other sources than the ordinary revenues of the Philippine government. The receipts from sales of the lands to natives can be devoted to the payment of any bonds. issued to raise money for the purchase.

Slavery. It is gratifying to report that the efforts of the American officers to bring about a cessation of the practice of slavery among the Moros are not fruitless. The character of the slavery practiced is quite unlike that formerly practiced in the United States in this, that the Moro slave, so called, becomes a member of the owner's family, enjoying many privileges, often having voluntarily sold himself into slavery to better his condition. The so-called slaves themselves exhibit

no special anxiety to change their condition. All who seek freedom receive it upon coming into the American lines.

The following proclamation has been issued by the Datto Mandi, one of the most powerful of the Moro rulers:

[Circular.]

To the datos, principals, and old men of the Moro rancherias of this district:

Being aware that some Moros in villages within my jurisdiction continue to engage in slavery, some by loan made to poor families, some buying them for trading, all doubtless forgetful of the orders issued by the old Government of Spain, which strictly prohibited slavery, and in order not to wait to be again instructed by the civil Government of the United States, I direct all my subjects, especially the datos, principals, and old men of all villages in my jurisdiction, beginning with this date, to comply and enforce the rules provided in the following sections, viz:

First. In view of the fact that slavery has not and never will bring any progress with it, you shall prevent Moros to have slaves of their own or other race.

Second. If actually some are in such condition because of debt contracted for his immediate needs, he will not be considered as such slave, but as a hired man who receives a salary for his services, and with the view of extinguishing the debt in from eight to ten months.

Third. It is strictly prohibited from this date illegal trading of Moro slaves and also slavery among themselves. Offenders of these rules will be liable to a penalty or a fine.

Zamboanga, April 19, 1901.

This is a literal copy of the original, which was written in Arabian characters. The Datto Rajahmuda.

MANDI.

It is believed that the peaceful process, the rapid advance of which is indicated by this proclamation, will accomplish the desired result much more readily than it could be accomplished in any other way.

Progress of government.-In general the progress of good government in the Philippines during the past year has been greater than the most sanguine American familiar with the obstacles to be overcome could have anticipated. Mutual understanding and confidence are necessary elements to success in such a field. These can not be

extemporized or forced; they must come freely, naturally, and slowly. I think our legislators and administrators in the Philippines are winning the confidence of the people by deserving it. For hundreds of years the Filipino people had been accustomed to fair promises never fulfilled. We have made similar promises, and what we have already done in the way of performance has been a revelation of unexpected good faith.

The organization of the Federal party in the Philippines, which has extended throughout the provinces, loyally accepting the sovereignty and asserting the sincerity and beneficent purpose of the American people, has been of the utmost value. The character of the military officers who have commanded, of Governor Taft and the members of the commission, and of the assistants whom they have gathered around them, has commanded respect and dispelled suspicion throughout a field of influence widening steadily as they have become known. A country is very fortunate which can draft from its citizens such men into the public service.

I believe that each successive step in the practical development of American purpose in the Philippines will result in wider appreciation and approval in the islands, and that we may reasonably look forward to a time not far distant which will be characterized by general good feeling, established confidence, and active cooperation on the part of all the peoples of the archipelago in our efforts for their benefit. The course will not be without its difficulties, discouragements, and reverses, but cheerful and persistent courage, faithful to the spirit of our institutions, will prevail.

General policy of government.-The policy followed by the American Executive in dealing with the government of the Philippines (and) also in dealing with the government of the other islands ceded or yielded by Spain which have been under the control of the War Department) has been to determine and prescribe the framework of insular government, to lay down the rules of policy to be followed upon the great questions of government as they are foreseen or arise, to obtain the best and ablest men possible for insular officers, to distribute and define their powers, and then to hold them responsible for the conduct of government in the islands with the least possible interference from Washington.

Notwithstanding a rigid adherence to this policy, and consistently with it, the demands upon the Department for action in the vast and complicated business of the island governments have been constant and imperative. Different civilizations, different systems of law and procedure, and different modes of thought brought into contact have evolved a great crowd of difficult questions for determination. New facts ascer tained and changed conditions have called for the interpretation and application of our own rules of policy and the establishment of further rules. Different views as to the scope of authority under the distribu

tion of powers have required reconciliation. The application of the law of military occupation to rights and practices existing under the laws of Spain and the process of overturning inveterate wrongs have brought about frequent appeals to the highest authority, which, being made in the name of justice, have required consideration. The work undertaken has been the building up of government from the foundation upon unfamiliar ground. We have had no precedents, save the simple and meager proceedings under the occupation of California and New Mexico, more than half a century ago, and it has been necessary to decide every question upon its own merits and to make our own precedents for the future.

For the performance of all these duties full and accurate knowledge of the conditions and proceedings of all the governments in all the islands on the part of the authorities in Washington has been required. It has been necessary to follow them step by step. The President and Congress have looked to the War Department for information as to how the trust of government in the various islands was being performed, and tens of thousands of applications by the people of the United States for every conceivable kind of information regarding the islands have poured into the Department in an uninterrupted stream.

Only thorough system could arrange, record, and keep available for use the vast and heterogeneous mass of reports and letters and documents which this business has involved, furnish answers to the questions, conduct the correspondence, and keep the Secretary of War from being overwhelmed in hopeless confusion. The War Department had no machinery for the purpose. No provision for any such administrative machine was made by law. Of necessity, by the detail of officers and the employment of the temporary clerks authorized by law, such machinery has been created in the Department with a chief, an assistant chief, a law officer, a competent force of translators, accountants, stenographers, and recording and indexing and copying clerks. It is called the Division of Insular Affairs of the War Department, and it performs with admirable and constantly increasing efficiency the great variety of duties which in other countries would be described as belonging to a colonial office, and would be performed by a much more pretentious establishment.

I feel justified in expressing high commendation of the most intelligent and thorough work done by the law officer, Mr. Charles E. Magoon, and of the effectiveness and devotion to duty of Capt. Clarence

R. Edwards (formerly lieutenant-colonel, U. S. V.), the officer detailed as chief of the division. The importance and difficulty of this position ought to be accompanied by higher rank and pay. Its duties on the insular side of the Department are closely analogous to those performed on the military side by an adjutant-general. I think it would be but just that, so long as the necessity of the Insular Division continues, and that must be for a considerable time, the officer detailed as its chief should have the temporary rank and pay of a colonel, following the rule which is applied to the engineer officer in charge of public buildings and grounds, the Engineer Commissioner of the District. of Columbia, and the Superintendent of the West Point Military Academy.

EXPENDITURES, APPROPRIATIONS, AND ESTIMATES.

The expenditures for the fiscal year ended June 30, 1901, the appropriations for the present fiscal year, and the estimates of appropriations required for the fiscal year ending June 30, 1903, are as follows: