as a regular annual yield. That is what the lands are capable of producing under the most favorable circumstances, but this can not be taken as a basis by itself for the valuation of the land, because it is not the basis for a steady income. It is more or less subject to conditions and circumstances and it is only lately that the price of palay has risen. It is subject to fluctuations, and, indeed, the price will be lower in the future.

Governor TAFT. Are there any lands rented in that neighborhood from others than these companies?

Señor VILLEGAS. The people of Santa Rosa have told me that those lands belong to the pueblo.

Governor TAFT. What I want to ask is, what is the ordinary division of crops between the landlord and the tenant in Laguna, for rental?

Señor VILLEGAS. One-half.

Governor TAFT. Does that include lending or furnishing of carabaos by the landlord?

Señor VILLEGAS. Yes, sir.

Governor TAFT. Suppose they do not furnish any carabaos and do not furnish any seed, what is the division then?

Señor VILLEGAS. It is according to agreement in that case, but it sometimes happens that capitalists will furnish only carabaos while the tenant is obliged to furnish the seed."

Señor GUTIERREZ. I wish to state that the witness is in error with regard to this matter. I myself have been an agriculturist and know what I am talking about. The custom in the Visayan Islands is to split the crop in halfs, one half going to the landlord and the other half to the tenant, the landlord furnishing nothing but the land. But in the case of sugar the landlord further takes the tenant's cane and grinds it for him and then they divide the sugar between them. In Luzon it was the custom to give two-thirds to the landlord and one-third to the tenant. Governor TAFT. That is not my information.

Señor GUTIERREZ. I have been thirty-six years in the Philippines and a great portion of that time a farmer, and I can show examples.

Governor TAFT. I will call a witness on that subject who, long as the experience of Señor Gutierrez is, has had more experience, in that he has owned a larger estate. My impression is (of course I have no knowledge except what I gain) that in certain parts of Luzon (of course they may vary in other parts) the division is just half, whether carabaos are furnished or not. Señor Gonzales owns as large an estate as any of these, and he charged 10 per cent of the crop.

Señor GUTIERREZ. But that is an insolated case." I can cite a case of the Frailes where they only charged 5 per cent.

Archbishop GUIDI. That simply goes to demonstrate that there is no fixed rule. It simply depends on the agreement between the land owner and tenant.

Governor TAFT. But if you get all the agreements together then you are able to determine something of what ought to be the rent. The friars were the largest landlords in the islands and they only charged 10 per cent, and sometimes, as they say, 5; and then you get Gonzales, who is I suppose the next largest proprietor in the islands, or one of the largest, and he only charges 5 per cent.

Señor GUTIERREZ. That is true, but the case of Señor Gonzales is easily accounted for when you know that his lands are uncultivated lands and his lands only date from about the year 1860. He is a man, you might say, of yesterday only, and he would naturally wish to have his land cleared and put into a state so that it could be cultivated. Tuason charges here at Santa Mesa a tax of 6 cents, Mexican, for each square meter a year.

Governor TAFT. I will call Tuason and see what he charges. Santa Mesa is in the city, isn't it?

Señor GUTIERREZ. Yes, sir.

Governor TAFT. What does he charge in the Mariquina Valley?
Señor GUTIERREZ. I have not investigated; I can not say.

Governor TAFT. Mariquina would be a much fairer standard to judge by than Santa Mesa, which is right here within the street-railway limits. For instance, they want $400,000 gold for this land of Warner-Barnes & Co., but that gets its value not because of the rice it raises (if, indeed, it raises any rice), but it gets its value because just as soon as there is an electric street railway it is bound to be the best land in Manila for suburban residences; and so it is with Santa Mesa.

Archbishop GUIDI. I would ask, then, that the same judgment be taken into account with regard to the lands which we are dealing with that are within a municipality.

Governor TAFT. Certainly. Let me state the proposition, to see whether his excellency agrees with me. Any land that is useful for the construction of urban or sub

urban residences within a reasonable time has necessarily a value for that purpose as distinguished from the value that it ought to have for the raising of crops; but when you get land out here in Santa Rosa, there is no probability that Manila is ever going to reach out to Santa Rosa, or that anyone is going to build suburban residences there, and that has to be valued according to its agricultural character. The same applies to the Cavite estates.

Archbishop GUIDI. Certainly. It was simply a general observation which I made, and which I wanted to make for the consideration of Señor Villegas; for, if you will remember, I asked the question at the beginning whether he had taken it into due consideration in his valuation of these lands-those lands which were within the urban zone, or which were suitable to go within an urban zone, and those lands which were purely agricultural.

Governor TAFT. As yet we have not considered any lands that were within an urban zone; at least, I do not remember.

Archbishop GUIDI. It is true I have not asked him particularly that question, but simply in a general way, and a question (which, by the way, Señor Villegas did not answer) whether he had taken into consideration in making this assessment those lands which were within an urban zone and those which were purely agricultural lands. I simply wished to make this general question in order afterwards to make the more particular questions. I will now ask Señor Villegas again if he has taken into consideration lands within an urban zone and lands outside the urban zone. Señor VILLEGAS. Yes, sir; I have.

Archbishop GUIDI. Further on I will discuss which were urban lands and which were not urban lands.

Señor VILLEGAS. With regard to the question of the obligations of the tenant toward the landlord in the case of one of these haciendas, it was the general rule for the tenant to give for each cavan of seed that had been furnished to him 5 or 6 cavanes of palay and from 6 to 8 pesos in money.

Señor GUTIERREZ. With regard to Señor Villegas's statement of the improvements on this hacienda, I should like to say that there is on this hacienda a ditch a kilometer and a half in length, besides smaller ditches of 13,000 meters in length. With regard to the valuation of the house, if it was offered to me for $30,000 I would take it immediately. There is also a warehouse that is situated in the neighborhood of the house that is worth $10,000, which Señor Villegas has not taken into account at all. There is also another fine house on the estate, a magnificent house, which is outside of the town itself, of which no mention is made by Señor Villegas. He has also valued the sugar land at much less than the palay land, and yet we all know that the sugar land is worth a great deal more than palay land.

Señor VILLEGAS. I do not agree with Señor Gutierrez, because the rice lands are situated almost on the lake shore, while the sugar lands are situated away up in the uplands.

Señor GUTIERREZ. You can say what you like about the matter, but everybody knows that the sugar land is worth a great deal more than the rice land. The fact of sugar land being on the uplands is in accordance with the nature of sugar land. Sugar land needs these conditions to be sugar land-it must be on high ground.

Señor VILLEGAS. I have taken into consideration the difficulty of transporting the sugar cane from these high lands to the pueblo, which is very costly; and, furthermore, these lands are not very good lands for the cultivation of sugar.

Señor GUTIERREZ. Señor Villegas's classification of the land demonstrates, to my mind, that the land must be very valuable for the cultivation of sugar. However, the land has been classified by Señor Villegas as sugar land, and it is in sugar, and it would be certainly very foolish to plant sugar on half of the land of this estate, taking into consideration the cost of planting sugar cane, if it were not suitable for sugar and suitable only for palay.

Señor VILLEGAS. With regard to the valuation that I have made of those lands, it is in accordance with the actual product of the land.

Señor GUTIERREZ. How many pilons of sugar a hectare does the land produce? Señor VILLEGAS. From 25 to 30 pilons a hectare.

Señor GUTIERREZ. How much is each pilon worth?

Señor VILLEGAS. The price varies.

Señor GUTIERREZ. Furthermore, Señor Villegas has not taken into consideration the urban zone of Santa Rosa in this estate, and I know that the town of Santa Rosa is quite a good town.

Señor VILLEGAS.

I have taken it into account in the classification of first-class lands, for the superior class lands, and the town lots are about equal in value. Señor GUTIERREZ. I can not agree with you that town lots are of the same value as first-class or superior lands.

Señor VILLEGAS. Town lots in provincial towns are not worth as much as in Manila.

Señor GUTIERREZ. That is true. Señor Villegas also states that the communication between the hacienda and the outside is not good, but I can state that the entire hacienda fronts upon the lake shore and has easy communication.

Señor VILLEGAS. I have recognized the fact that some of the land lies on the lake shore, and for that reason I have valued it as first-class, superior land.

Archbishop GUIDI. In order to demonstrate the difference of opinion there is with regard to the value of land, the agent of the Augustinian nuns has been offered a peso and a half a square meter for their lands, and they have refused it.

Governor TAFT. But that is suburban property; the electric street railway is bound to go right there.

Archbishop GUIDI. The Santa Clara nuns have also been offered a very high price for their estate.

Governor TAFT. Now, about Calamba. Is that sugar or rice land?

Señor VILLEGAS. Both sugar and rice.

Governor TAFT. There are 16,424 hectares in the estate.
Señor GUTIERREZ. Yes, more or less; that is about right.

Governor TAFT. You have estimated that of first-class land there are 3,991 hectares; 883 hectares of second-class, and 883 of third-class lands.

Also 4,626 hectares of

sugar land which you estimate at 60 pesos a hectare, and 6,036 hectares of uncultivated lands. The hacienda house you place at 15,000 pesos, making the total value of the estate $1,102,000.

Señor VILLEGAS. Yes, sir.

Governor TAFT. Is this on the lake?

Señor VILLEGAS. Yes, sir.

Governor TAFT. Is the soil good?

Señor VILLEGAS. Yes, sir.

Governor TAFT. How many hours is it from Manila?

Señor VILLEGAS. The steamer leaving here at 7 o'clock in the morning will reach there about 1 o'clock the same afternoon; that is, after making all stops.

Governor TAFT. Is it improved?

Señor VILLEGAS. There are a few improvements.

Governor TAFT. It has the main road to Batangas and Lipa running through it, hasn't it?

Señor VILLEGAS. Yes, sir.

Governor TAFT. There seem to be a good many rivers and streams running through the estate.

Señor VILLEGAS. Yes, sir; but they are not navigable streams. The San Juan River is navigable, however, up to the pueblo of Calamba.

Governor TAFT. Are there any dams in the streams?

Señor VILLEGAS. Yes, sir.

Governor TAFT. Are they used in irrigating the land?

Señor VILLEGAS. Those rivers which have dams are used for the irrigation of land. Governor TAFT. How much do the first-class lands produce here of rice?

Señor VILLEGAS. In good seasons, first-class rice lands produce from 70 to 80 cavanes in this hacienda; the lands lying along the shore of the bay.

Governor TAFT. Where is the sugar land?

Señor VILLEGAS. Through the wooded uplands.

Governor TAFT. I see you have estimated this sugar land as considerably less in value than in Santa Rosa. Why have you made that distinction?

Señor VILLEGAS. Because the sugar land in this estate is away back in the woods, almost up in the foothills of the mountains.

Governor TAFT. Does that produce as much sugar cane as the land in Santa Rosa per hectare?

Señor VILLEGAS. No, sir; these sugar lands produce comparatively little.

Governor TAFT. About this house, is it in good condition?

Señor VILLEGAS. Yes, sir.

Governor TAFT. Is it a large house?

Señor VILLEGAS. No, sir; it is a medium-sized house.

Governor TAFT. You have estimated its value as $15,000?

Señor VILLEGAS. Yes, sir.

Governor TAFT. You put the valuation of 5 pesos a hectare on uncultivated lands for the same reason, I presume, that you did in other cases?

Señor VILLEGAS. Yes, sir.

Señor GUTIERREZ. You have stated that the first-class rice lands produce from 70 to 80 cavanes a year. What do the second-class rice lands produce?"

Señor VILLEGAS. From 65 to 75 cavanes only.

Señor GUTIERREZ. How much do the third-class lands produce?

Señor VILLEGAS. From 45 to 55 cavanes a year.

Señor GUTIERREZ. How many piculs of sugar will one hectare of sugar land produce? Señor VILLEGAS. From 15 to 20.

Señor GUTIERREZ. It produces over 100.

Señor VILLEGAS. But you must take into consideration that in planting sugar land one-half of the hectare is always left idle-that is, one-half cultivated in one year and one-half left fallow until the next year.

Señor GUTIERREZ. So that you have given me the production of one-half of a hectare instead of one hectare?

Señor VILLEGAS. No; I have given the production of one hectare because I have taken into consideration that a hectare that is put to seed this year, next year lies idle; so that I take the average per year.

Archbishop GUIDI. You must not take it as a fact that the land would be allowed to lie idle, because if it was planted to sugar cane one year, the next year instead of being allowed to lie idle it would be planted to corn or any other crop, which would be worth something.

Señor VILLEGAS. I simply took into consideration the value of the land with relation to its productivity in sugar.

Archbishop GUIDI. You should not do so; you should also take into consideration its productivity in other crops.

Señor VILLEGAS. That would be a small affair.

Señor GUTIERREZ. With regard to the sugar lands in the estate of Calamba-they are of such strong soil that it is necessary that they be cultivated for a long succession of years before they can give a good quality of sugar. At the present time they do not give a good quality of sugar, but it is not necessary to let them lie idle at the present time. They ought to be cultivated every year for a succession of years.

Señor VILLEGAS. But it is the general custom in this country where the palay is sown to the land one year and then the straw is burned off, that year they are allowed to lie idle for another year before they are seeded again.

Señor GUTIERREZ. But that is not the normal condition of these islands. What you refer to is simply those lands which have been recently cleared and which are cultivated by the people in the mountains. It may be that they will cultivate them one year and allow them to lie idle, but lands that are under constant cultivation are cultivated one crop one year and cultivated to another the next year. It is the same way here as in Porto Rico, Cuba, or anywhere else.

Governor TAFT. I thought they planted sugar lands and went right on growing sugar for four or five years before they had to renew the cane.

Señor GUTIERREZ. That is in some points true, but in other points it is not.

Governor TAFT. How about the island of Negros?

Señor GCTIERREZ. At Ilog, in Negros-a place which I know very well-they cultivated cane for a period of seven years without making new plantings.

Governor TAFT. What is sugar land in Negros worth?

Señor GUTIERREZ. I do not know, but it is worth a good deal of money.

Governor TAFT. Is it worth 200 pesos a hectare?

Señor GUTIERREZ. Yes, sir; I should think so.

Governor TAFT. It is not worth from 100 to 150. How much is that of Lacson worth? That is as good as there is.

Señor GUTIERREZ. I do not know what Lacson's hacienda is worth. I did know what he paid for it but I have forgotten.

Governor TAFT. The sugar land in Negros, along on the coast there, has very easy communication with Iloilo, hasn't it?

Señor GUTIERREZ. But our communication is ever so much easier.

Governor TAFT. Yes; but they have small vessels that run all the time there, haven't they, right across to Iloilo?

Señor GUTIERREZ. Yes, sir. Lacson's hacienda runs right down to the shore, and his lorchas run right up and take the sugar from the little railroad that he has on the shore.

Governor TAFT. Sugar land there produces a good deal more than sugar land here, does it not?

Señor GUTIERREZ. No, sir; it is better sugar, but much less. It is possible that the land is very much easier cultivated in occidental Negros. I know that it gives a better quality of sugar, but it gives a very much smaller crop—that is, land that is worn-out down there.

Governor TAFT. Some of it is, but I mean good land in Negros situated conveniently toward Iloilo. Is there any of it that is worth more than 200 pesos a hectare, by estates?

Señor GUTIERREZ. I do not know because I do not own any of the land; but I think

it is possible that you could find sugar lands worth that much in Negros, because Negros is a very large island and very thinly populated.

Governor TAFT. What I want to know is, why, if first-class sugar land in Negros is worth generally not 200 pesos but 150, this should be worth five and six and seven hundred pesos?

Señor GUTIERREZ. For the same reason that in Pampanga land is worth from 600 to 800 pesos a hectare where the same lands in Tarlac are worth 30 to 40 pesos a hectare. In Pampanga, there is a very thick population. Tarlac is very thinly inhabited and what they desire there is that new colonists come and cultivate the land.

Governor TAFT. Then you do not judge wholly by the product in ascertaining the value of the land?

Señor GUTIERREZ. In Pampanga and other places the value of the land depends upon the demand for it. In our haciendas which have been long opened up and which are surrounded by a thick population, the people there have to buy the products of the land; consequently it is worth more.

Governor TAFT. In Negros the gross product in many years is worth as much as the land is worth, so that it does not show that an estimate is necessarily absurd of the value of the land because it may not exceed the gross product of the land.

Señor GUTIERREZ. When you deal with a hacienda that is cultivated, an old, established hacienda like this, then it is absurd.

Governor TAFT. These lands in Negros have been cultivated for a long time. You stated that some of the land was cultivated so long that it was thinned."

Archbishop GUIDI. They are lands that have been cultivated for a number of years and that have been abandoned.

Governor TAFT. In Negros?

Archbishop GUIDI. In some parts of Negros.

Governor TAFT. But these lands, some of them-in Santa Rosa, for instance-have been cultivated for hundreds of years, according to Señor Gutierrez. Have they ever been manured?

Señor GUTIERREZ. I do not know.

Governor TAFT. The fact is that none of this land has ever received additions to its strength by artificial means?

Señor GUTIERREZ. I believe not.

Governor TAFT. Does the land become exhausted gradually from cultivation of sugar?

Señor GUTIERREZ. Yes, sir; with the cultivation of everything.

Governor TAFT. Then these lands, which are so old, have been cultivated a long time, haven't they; so that they do not produce as much as if they were fresh lands? Señor GUTIERREZ. That is true.

Governor TAFT. Then why should they be more valuable from the point of production than the manured land of Negros, for instance?

Señor GUTIERREZ. It is not precisely from their productivity that their values are increased, but from their proximity to a central market, from the ease with which they are worked, from the large supply of workingmen which they can draw upon to cultivate, and from the fact that they are all actually under cultivation.

Governor TAFT. Now, we have got back to what I wished to show, and that was that the value of your land depends on what it will bring in the market, what people will pay for it; that the productivity of the land is only one circumstance, and the fact that it produces $150 in a year, gross, is only one circumstance to show what its value may be, and that it may be worth no more than the gross production of one

year.

Señor GUTIERREZ. I can never admit that latter statement.

Governor TAFT. You just admitted to me that there was land in Negros that produced $150 a year and was not worth more than $150.

Señor GUTIERREZ. Yes; but the trouble is that there is no demand for those lands in Negros. In Paragua there are similar lands.

Governor TAFT. That is just what I say; it depends on the lands.

Señor GUTIERREZ. Yes; but the uncultivated land is more subject to fluctuations than cultivated land.

Governor TAFT. I am speaking about cultivated land in Negros. That is what I understood you to refer to-cultivated sugar land that will produce $150 a year and yet is not worth more than $150.

Señor GUTIERREZ. With respect to cultivated lands in Negros, such as you refer to, if they do produce 150 pesos a hectare, I can not conceive of anybody wanting to selĺ them for that sum. It is impossible that anybody should wish to sell for that sum

or less than that sum.

Governor TAFT. I understood you to admit a while ago (possibly I am wrong