is given in choice to those buying wholly for cash. The terms of partly credit sales are 93 pesos-31 pesos cash and the balance in one and two years secured by chattel mortgage on the animal. It has also been the custom of the Commission to authorize the purchasing agent to sell in small numbers carabao at 100 Philippine pesos a head for cash, with the privilege of choice to any bona fide hacendero or farmer coming to Manila to buy. Of course the prices fixed will not pay the cost of the carabao, but it was not the purpose of the Commission to charge full cost. The Commission understands the intention of Congress to be to relieve the scarcity of cattle by furnishing them to farmers at a low price.

If we assume that the carabao shown to be on hand and sold at the time of the preparation of the statement given above will continue in life, they have cost the insular government 126.65 Philippine pesos a head, without counting forage and other expenses of maintenance, which would perhaps increase the expense to 150 pesos. This is not encouraging, but experience will doubtless enable us to reduce the cost. The attitude of the Chinese Government makes it improbable that we can procure from China more than the 10,000 already contracted for there. It seems likely, though experiment will only make it certain, that it would be wiser for us to import the so-called Indian bulls and cows used now in the Straits Settlements in Java and in India for rice culture, because, though not so strong, they are hardier than the carabao and quite as good workers. I append hereto a statement as to carabao transactions to November 20, 1903, by the insular purchasing agent, as Exhibit C.

I also append a statement from the auditor showing the actual expenditures from the Congressional relief fund as Exhibit D. From this statement it appears that of the total sum of $6,000,000, appropriated by Congress, the sum of $2,691,000 has been appropriated or allotted by the Philippine Commission for the purposes of the act, and that net withdrawals from such allotments have been made amounting to 1,312,162.42, leaving a balance to the credit of the allotments amounting to 1,378,837.58. There was in the treasury on December 1 to the credit of the Congressional relief fund a balance unappropriated of 13,309,000, and a balance of the original fund in the treasury, allotted and unallotted, amounting to P4,687,837.58, or $2,343,918.79.

CONDITIONS AS TO TRANQUILLITY.

The conditions with respect to tranquillity in the islands have greatly improved during the last year, and I think it fair to say that at no time in the history of the islands has there been less ladronism than as when this is written, December 10, 1903. At the time of writing my last report the provinces of Rizal and Bulacan, in the immediate neighborhood of Manila, were disturbed by marauding bands, which

are said to have derived considerable support from persons in Manila. They were under the command of one San Miguel, who professed to be the appointee of a junta representing the Filipino Republic. He drew his forces from the purlieus of Manila and from well-known ladrones, thieves, and other criminals to be found in the towns of the two provinces. So active did the marauders become that the forces of the constabulary of the two provinces were not enough to guard the towns against their attacks and at the same time to chase the robbers to their hiding places. Accordingly, use was made of the scouts under the constabulary act, and this with very good effect. In two engagements, one with the constabulary and the other with a company of scouts, the ladrones suffered most severely, losing in the latter of the two engagements more than 60 men by death, including their leader, San Miguel. Shortly before the death of San Miguel, Apolinario Mabini landed in these islands from Guam, after taking the oath of allegiance. Upon his landing a note from San Miguel was handed him, asking for advice. To this note Mabini responded by writing on his visiting card that he had not been long enough in the islands to answer, but that he would advise him later. The card of Mabini was found on the dead body of San Miguel and was delivered to me by the chief of the constabulary. I sent the card to Mabini by the hand of Pedro A. Paterno, expressing surprise that so soon after taking the oath he should open communication with men in arms against the Government. He replied by sending to me a copy of a letter which he had sent San Miguel, but which did not reach him before his death. The letter was as follows:

MANILA, March 27, 1903.

SIR: Since you ask me my opinion concerning your action, I will clearly inform you in accordance with my method of thinking.

I do not consider that the liberty enjoyed to-day in this Archipelago can be followed by independence through means of arms at the present time. The people do not move because they have no arms, and even if they had them they would have nothing to eat. Although you might find another nation that would like to furnish arms and supplies, this nation also would like to annex this territory, and if this should happen our misfortune would be still greater.

If we should proceed gradually, as, in fact, you are doing, the war would continue and possibly our nation never would enjoy prosperity, because the war would finally turn into a poisonous disease which would greatly increase our weakness. Understand well that we are now killing each other.

It seems to me that at the present time we should endeavor to secure independence through the paths of peace. Let us cease that the people may rest, that it may work to recover from its recent proprietary losses. Let us conform to the opinion of the majority, although we may recognize that by this method we do not obtain our desires.

This is, I believe, the surest and most fit method in obtaining the welfare of all. Let us deliberate and hold an assembly to treat of these matters. In case you are in conformity with this and return to peace, determine upon the necessary conditions that you should ask in order to save yourselves from any whatever vexations,

and if you think that I should transmit your petition to the constituted authorities I am disposed to comply at any time.

There are those who say that your procedure is the cause of many abuses and methods which are unfavorable to the country, but I believe that the remedy for this, if it were true, is not comparable to the great poverty which would be born of of a war apparently interminable. I believe that as long as the Filipinos do not endeavor to liberate themselves from their bonds the period of their liberty will not arrive.

Excuse me for telling you this. If, perchance, you are not in accord with my opinion, this will not, as far as I am concerned, be a motive for destroying our former friendship and companionship.

Order your humble servant whenever you see fit.

General LUCIANO SAN MIGUEL.

AP. MABINI.

Subsequently to this, Mabini addressed to me a letter in terms following:

MANILA, P. I., April 9, 1903.

HONORABLE SIR: A few days after my arrival at this capital, I received a message from the late San Miguel, sending greetings of welcome, and requesting my opinion in regard to his attitude. In reply I sent him a card, thanking him for his welcome and informing him that I had not as yet formed any opinion, since I had only just arrived and did not know the conditions.

Weeks after, when I had acquired some knowledge of the true state of affairs, I wrote a letter, in which I endeavored to prove that armed contention is ruinous to the country and that the present condition of things permits only of a pacific contention for the political ideals that one might strive after. I prepared this letter against the time when San Miguel should ask me for the second time for my opinion. On the morning of the 27th of March last a messenger came for the said opinion, and I gave him the letter. But on the following day the messenger came back to inform me that the letter had not reached the hands of San Miguel, who had been killed, but had been delivered to an officer of his band for him to deliver to the second in command. Later I turned over the rough copy of the letter to Mr. Pedro A. Paterno, in order that he might inform you in regard to the contents.

I have just been informed that the letter is in the possession of Faustino Guillermo, chief of a band, who, with his people, is disposed, so they say, to follow the counsels given in the said letter. But there exists another and larger band, under the command of Alejandro Santiago and Apolonio Samson; this Alejandro Santiago is, according to reports, the successor of San Miguel. These chieftains have not received the letter yet, for the reason that the frequent expeditions and patrols of the constabulary render communication very difficult; no one dares to search for them, for fear of falling into the hands of the officers of public order. They tell me that it is necessary that the persecution should not be so active, if only for a few days, for them to secure an opportunity to hold intercourse; or that a safe conduct should be furnished them, so that they can send a person to look for them and deliver the letter.

I must confess frankly that the late San Miguel was an old acquaintance and even friend of mine; but the chiefs above mentioned I do not know personally, and I am not acquainted with their antecedents.

With these data, I await your determination, signing myself your humble and obedient servant.

Mr. WILLIAM H. TAFT,

MABINI.

Civil Governor of the Philippines.

To which I made the following reply, which ended the correspond

ence:

BAGUIO, Benguet, April 18, 1903.

MY DEAR SIR: I have to acknowledge receipt of your letter of April 9, 1903, and to apologize for my delay in answering the same. The letter was delivered to me just before I left Manila for Benguet, and I had to delay answer until reaching here, and until the letter could be translated. I have also read the copy of your letter to San Miguel which you sent me by Señor Paterno. I thank you much for interesting yourself in the maintenance of law and order in the islands and in presenting as cogently as you do the necessity for peace and tranquillity. If I have understood your letter to me and its request, you have in mind a surrender of the persons to whom you have directed your letter, on condition of their receiving immunity from ordinary prosecutions under the law. Could I be assured that this leniency would secure quiet and freedom from robbery and invasion to the good people of Bulacan, Rizal, and Cavite, whose welfare we both have at heart, I should be glad again to offer immunity to those to whom you desire your letter to be conveyed; but the difficulty is, my dear señor, that purely out of consideration for the welfare of the people of the three provinces, I ran the risk of allowing many criminals to go unwhipt of justice and did authorize an offer of immunity to these very persons should they come in and surrender all their arms-an offer which remained open for some six weeks from October 1 to November 15 of last year. Reports came from time to time that the offer was to be accepted, but finally nothing was done. There was for a time suspension of the police expeditions in order to permit a general surrender. The only effect of this was to exaggerate in the eyes of the poor people of the towns of Rizal and Bulacan the prestige of those to whom the offers of immunity were made, enabling them the better to terrorize such people, and to give to the individuals in arms an excessive idea of their own importance. The negotiation fell through chiefly because the men who made up the bands of these various individuals belonged to the criminal classes, were confirmed ladrones and escaped fugitives from justice, whom their leaders, even if they desired to do so, could not control to the extent of compelling them to give up their arms which they needed for their life's profession. They were all bent on a lawless life, were outlaws and bandits, and would continue to be so whatever the government at Manila. True they received reenforcement from time to time from the idle and worthless of the neighboring towns and doubtless had assistance from some of the municipal officials, who, acting from motives of fear or gain, reaped a benefit from their complicity and assistance. After this experience, and after a conference with the members of the Commission, I reached the definite conclusion that patience with them had ceased to be a virtue, and that the worst possible course to pursue with them, having regard to the welfare of the Filipino people of the three provinces, was to temporize, negotiate, or offer immunity to them. Most of them were criminals and had been so since the Spanish times, and it could not reasonably be expected that they would, even if they surrendered, return to paths of peace. San Miguel was selected as nominal leader and figurehead because the real leaders were jealous of each other. Santiago, a very obscure person, with facility only for intrigue, has been selected on the same principle. Apollonio Samson, Faustino Guillermo, Julian Santos (now under sentence of death), Manilang (now dead), Felizardo, Montillon, and Contreras were the real leaders and they always have been robbers, kidnapers, and carabao thieves, and Guillermo, Santos, and Manilang, and possibly some of the others, were fugitives from justice under charge of murder. They are unworthy of either the encouragement or sympathy of any Filipino of honor and integrity, no matter what his views as to the present civil government, or the independence of the islands. It is difficult for those who are sincerely irreconcilable not to sympathize with any disturbance involving attacks upon the peace and order of the community,

because they can hardly repress the hope that such disturbance, whatever the motive, may embarrass the present government and ultimately germinate into a new insurrection. In the blindness of their zeal they are willing to sacrifice their own people— for it is only their own people who suffer by such outlawry-to a vague hope that out of pure ladronism, murder, and robbery may grow a successful revolution based on patriotic sentiment. Those whose duty it is, however, to keep informed as to the character and nature of these persons who keep up such disturbances know that while these persons may receive encouragement and even material assistance from irreconcilable persons of respectability, they are essentially only robber bands, thieves, murderers, and kidnapers for ransom, determined to live on their neighbors and willing to sacrifice any number of Filipinos to the enjoyment of an outlaw life. They masquerade at times as "revolucionarios" in order to win the assistance just mentioned, but they are nothing but ladrones and should be punished only as violators of the law. Were there established in these islands a self-respecting and responsible independent Filipino government, almost its first duty would be the suppression and punishment of exactly this class of persons, who in their hearts recognize no law and wish no condition of affairs save that of violence and rapine, for in no other can they acquire a livelihood, or attain the position of prominence or influence which their vanity demands.

I have written, my dear Señor, to you with great frankness, not with the idea of publishing our correspondence, but merely to show you my exact attitude and to explain why it is that I can not facilitate communication between you and the persons whom you name, whose past history you say you do not know, because if I were to do so, it would lend support to the view that I am willing to offer immunity in case of their surrender.

I have the honor to be, with sentiments of very great respect,

Very sincerely, yours,

Señor DoN A. MABINI,

Manila, P. I.

WM. H. TAFT, Civil Governor.

Within a few weeks after this Mabini died of cholera. My letter to Mabini states, with as much care as I can state it, the character of the men who were engaged in disturbing the peace and tranquillity of Bulacan and Rizal provinces last winter. Subsequent to the defeats in the field a secret service was established, in the two provinces and in Manila, which gradually obtained evidence against the persons who had been part of the ladrone forces. Alejandro Santiago and Faustino Guillermo have been among those captured. All the persons were brought to trial, and now most of them are in Bilibid, either under sentences for long terms or awaiting execution. The same result is being brought about in Cavite, where conditions have much improved since last year, though the two ladrone chiefs, Montillon and Felizardo, have thus far avoided capture. The province has been thoroughly policed, and more than 150 ladrones have been arrested and are on their way to the penitentiary. Arms are being brought in every day and the government is receiving aid from the people in its work.

The arrest, trial, and punishment of certain criminals in Surigao led to their being sentenced for long terms. This rendered the prisoners desperate, and in their desire to escape they communicated with