expense of the government of the Philippine Islands. Of said one hundred students, thirteen shall be selected and appointed for instruction in agriculture and the useful mechanical arts and sciences and twelve for such course of special instruction, approved by the civil governor, as they may elect. The students so selected and appointed by the governor shall be students of the public schools and natives of the Philippine Islands, of good moral character, sound physical condition, and not less than sixteen nor more than twenty-one years of age: Provided, however, That natives of the Philippine Islands, of good moral character, sound physical condition, and not exceeding twenty-five years of age may be selected and appointed by the civil governor for a course of special instruction.

SEC. 3. After his selection and before his appointment each student shall be subjected to a thorough physical examination by a physician designated by the civil governor, and the appointment of such student shall be dependent on the favorable report of the physician so designated. Each student receiving an appointment shall be required to take the oath of allegiance to the Government of the United States, and to sign an agreement, approved by his parents or guardian if he is under twentyone years of age, to the effect that he will attend the educational institution designated by the civil governor for the period of four years, or for such time as may be prescribed in his appointment, unless sooner released; that he will conform to all regulations, rules, and laws of said institution and such other regulations as may be prescribed by the department of public instruction; that he will diligently, studiously, and faithfully pursue the established course of studies or such special course of studies as may be indicated by the civil governor; and that upon the termination of his studies in the United States, in conformity with this act and the terms of his appointment and agreement, he will return to the Philippine Islands, and within two months after his return will take a civil-service examination, competitive or noncompetitive, in the discretion of the civil-service board, to qualify in such grade or for such office or position under civil-service rules as he may elect, and that if certified for appointment by the civil-service board and appointed from such certification to any office or post in the civil service at any time within one year after his return, he will accept such appointment and faithfully perform the duties of the office or post to which he is appointed, for the salary fixed by competent authority and for a period of time equal to that spent by him in the United States at the expense of the government, unless sooner separated from the service by competent authority. SEC. 4. The civil governor, by and with the approval of the Commission, may appoint a suitable agent to receive government students in the United States and to arrange for their transportation to the institutions of learning to which such students shall have been assigned, to make all necessary arrangements for the entrance of such students into said institutions and for their care, protection, and welfare while students therein, and to perform such other duties as may be ordered by the general superintendent of education. The agent is hereby placed under the supervision of the Chief of the Bureau of Insular Affairs at Washington, to whom he shall make quarterly reports of the health, welfare, and progress of each student. He shall also send duplicates of such reports to the general superintendent of education. Such agent so appointed shall receive a compensation not to exceed two thousand five hundred dollars, in money of the United States, per annum, and his necessary traveling expenses while engaged in the performance of the duties required by this section. SEC. 5. The cost of education and maintenance of said students in the United States, not exceeding the sum of five hundred dollars, in money of the United States, per student per annum, and the actual and necessary traveling expenses of said students to the educational institutions in the United States to which they have been assigned and their actual and necessary traveling expenses from such educational institution to Manila, Philippine Islands, upon the completion of their studies in conformity with this act and their agreement, shall be paid by the government of the Philippine Islands.

SEC. 6. There is hereby appropriated, out of any funds in the insular treasury not otherwise appropriated, the sum of seventy-two thousand dollars, in money of the United States, or so much thereof as may be necessary to carry out the provisions of this act. Funds appropriated for the purposes of this act for expenditure in the United States shall be disbursed by the disbursing officer of insular funds, Bureau of Insular Affairs, War Department, Washington, District of Columbia, on vouchers properly signed and duly presented.

SEC. 7. This act shall take effect on its passage.

Enacted, August 26, 1903.

There are at the present time en route to the United States 98 Filipinos to be educated as authorized by this act, and this Bureau is

engaged in making the preliminary arrangements for their reception and transportation to southern California, where they will be placed in the various grammar and high schools of that section to avoid the rigorous climate of the East during their first winter.

This number of students will be brought to the middle or eastern portion of the United States during the coming spring, and it is contemplated that an equal or greater number will be brought from the Philippines each succeeding year.

The enactment above quoted places this work under the supervision of this Bureau and the expenditures in the United States in carrying the same into effect are payable at this office.

COMMERCE OF THE PHILIPPINES.

Statistics relating to commercial transactions, as shown by the import and export trade, continue to be published each month in summarized form and serve as an index to the industrial development of the Archipelago. The rather exhaustive compilation of data appearing in the bulletin for December, 1902, has been the subject of much favorable comment owing to the convenient arrangement, whereby a great variety of information is presented concerning the value of the different classes of Philippine commerce during the years of American occupancy.

These summaries, in addition to including certain maritime and immigration statistics, the latter published quarterly, are used also as a medium for circulating various commercial items of interest to the public.

The extraordinary increase in exports during the year ended June 30, 1903, establishes a new record in the commercial history of the Philippines and for the first time since American occupation a balance of trade in favor of the islands is shown, in addition to the fact that their total foreign commerce was considerably larger than ever before. The bulk of this gain is due to the heavy shipments of hemp and copra, both of which products have been widely cultivated during the past year, indicating to some extent that adverse agricultural conditions have not seriously interfered with the preparation and marketing of these crops.

The following figures are presented to show the value of the Archipelago's trade, exclusive of gold and silver and government supplies, during each of the five fiscal years of American administration as compared with the average annual trade for periods prior thereto:

NOTE. The amounts covered by the fifteen years, 1880-1894, are inclusive of coin and lottery tickets and from statistics for the years 1883-1890, the only portion of this period for which gold and silver figures are available, it is shown that there was an average annual importation valued at $376,167 and in exportations $2,195,486 worth. Lottery tickets will not materially affect these averages.

As regards the trade carried on previous to 1880 the official records are far from complete, the few statistics available being rough estimates, for the most part based upon the reports of consular officers and merchants in Manila, in connection with returns published according to customs-house records of other countries; and although the figures for certain years, notably in 1870, when the imports reached twenty-four and a half million dollars and exports averaged $29,000,000, may have exceeded the average annual 1880-1894 shown above, nevertheless such cases are rare, and for all practical purposes the data as given form a fair basis for comparison.

The commerce during the fifteen years referred to, when taken as a whole and exclusive of gold and silver, shows a noticeable falling off in the total value of transactions according to the five-year periods; at the same time the balance of trade continued in favor of the islands until the beginning of American occupation, when it became necessary to deal with conditions as they existed during the latter part of Spanish rule. With the exception of an increase in customs receipts over those collected prior to our occupancy no sudden change was observed, the larger revenues not serving as an indication of the volume of business transacted, by reason of the different methods that prevailed in the administration of customs under the two régimes, coupled with the fact of the differential in favor of Spain that obtained before the United States took control.

Of the foreign goods received by the islands during the five years of American occupation a steady annual increase is shown in the total amount, the value of imports for 1903 not being equaled by any previous year's record. The continued shortage in rice production, however, due at first to voluntary neglect on the part of the natives and later to the loss of the carabao, or farm cattle, upon which the cultivation of this cereal in the Philippines is almost wholly dependent, and the fact that what little was raised suffered greatly from destruction by locusts, required heavy purchases of rice from abroad during the past year, the returns showing an increased importation over 1902 to the value of nearly $3,500,000. The supply was obtained chiefly from the French East Indies, and although substantial aid has been extended by Congress, permitting the insular authorities to render valuable assistance in the way of special shipments, bought in open market and received through the regular channels, to be sold to the natives at cost, the necessity for these importations continues, and indicates in a great measure the principal cause of increase.

The fact of such a large outlay being used in the purchase of food supplies affected the general progress of trade in other lines. Manufactured articles, which include practically all of the remaining importations, show increased receipts until the fiscal year 1902, as a result of small investments said to have been made in various branches of business, the aggregate needs of which amounted to considerable and required regular shipments of material during the early periods. By a comparison of the trade for the last two years a marked decrease is found under manufactured goods as a class, the unfavorable economic conditions causing a loss to the extent of more than $2,000,000. In classifying the latest fiscal year returns of import trade by countries a falling off is noticeable from practically all sources with the exception of China and the French East Indies, which increased their shipments to a large extent owing to the archipelago's heavy demand

for rice, the French East Indies alone furnishing $6,000,000 worth, an amount nearly equal to the entire supply of that article coming into the islands in 1902. With these exceptions and an increase of but one-half of 1 per cent on the part of Spain, a decline is noted in the import trade with all countries, the United States figures showing the smallest margin of loss.

Aside from rice-growing countries the United Kingdom, notwithstanding a decrease in 1903, still holds its position as the leading importer, with 16 per cent, or a little more than $5,000,000 worth, of the total trade, followed by the United States, whose imports approximated $4,000,000, the difference in values for the last two years indicating that the excess in favor of British trade is now but 4 per cent as compared with 5 per cent in 1902. Articles showing an increase in importations from the United States were wheat-flour, meat and meat products; vegetables, fresh and canned; condensed milk, canned fruit, mineral waters, chemicals, drugs and dyes, cotton and manufactures, hats and caps, boots and shoes, manufactures of rubber, illuminating and lubricating oils, scientific instruments, plated ware, nails and spikes, copper manufactures, and certain kinds of machinery. These gains were slightly overbalanced, as a result of the general falling off in demand, by a decrease in the following lines: Agricultural implements, glassware, paper pulp, watches and parts of, zinc and manufactures, electrical machinery, builders' hardware, iron and steel and their finished forms, wood and its maufactures, mineral oils, malt liquors, and distilled spirits.

The value of imports from the principal countries having trade relations with the Philippines during the last five fiscal years is given below:

Regarding the commerce in its relation to the outgoing trade of the islands during 1903, an extraordinary increase is observed as the result of heavy shipments of hemp and copra. To the former item is credited an exportation of $21,500,000 worth (nearly$6,000,000 over the previous year's record), the ratio for 1902, which was about two-thirds of the entire export trade, being maintained. Copra ranked second in value, approximating $4,500,000, as against a comparatively small percentage last year. Sugar, though showing an increase over the trade of the preceding year, is now third in importance as an export, while tobacco, with a material decrease in the exportation of cigars, com

pletes the list of leading articles of export trade, the value of which and the proportion shared by the United States during American occupation is shown by the following figures:

It will be seen at a glance that nearly all of the recent heavy increase in the growth of hemp, practically the whole production of which is consumed outside of the islands, has been taken by the United States trade, its purchases in 1903 reaching a value greater than the average annual exportation to all countries during the four preceding years, a significant fact when one considers that the product is an exclusive one, so recognized by all manufacturers, and that the Philippine output embraces what is commonly understood to be the entire supply of this class of fiber.

The United States demand for hemp, especially in the making of binder twine, continues heavy; in fact, it seems impossible to obtain a substitute satisfactory to the farmer's needs in handling our immense cereal crops, and in order to secure the necessary amount for this and other lines of the cordage industry a large proportion of the crude material has heretofore been purchased in London, being credited in the form of importations from the United Kingdom. However, from the figures given above it would appear that the operation of that portion of the act of March 8, 1902, which exempted the export tax on hemp coming from the Philippines to the United States direct, has relieved a condition of dependency of many years' duration, and American dealers no longer look to London as the controlling market.

The effect of this legislation in its relation to the hemp trade may be further illustrated by the record of importations at United States ports.

WAR 1903-VOL 7 -68