istence in the islands. Special attention was given to the gardening work of school children.

The athletic work of the public schools was continued, and now 95 per cent of all the pupils are taking part in some form of athletics in connection with their school courses. It is confidently asserted that the Filipino is a much larger man physically than he was 9 or 10 years ago, and in every way the health and physique of the younger generation shows a remarkable improvement. Great stress is placed on hygiene and sanitation in the schools, and the care and welfare of young children is also taught.

A great impetus was given to education among non-Christian peoples by an extra supply of P258,000 granted for that purpose. Schools of the farm settlement type are especially favored. One hundred and ten new schools among the non-Christian were opened during the year, of which 80 were situated among the Moros and pagans in Mindanao and Sulu. It is worthy of comment that among the Moros there are now employed 323 Filipino teachers for the most part from the northern Provinces. No one of these has been molested by the Mahammedans whom they were sent to teach, and this marks the disappearance of an attitude of hostility and suspicion existing up to very recent days.

The expenditures for education in 1915 amounted to P7,500,000, exclusive of the University of the Philippines. Of this amount, more than P5,500,000 was spent in primary education, somewhat more than a million on intermediate education, and P589,000 on secondary education.

BUREAU OF AGRICULTURE.

This bureau is making a noticeable and active effort in the campaign against rinderpest, in the development of the new work-animal insurance by cooperation among the farmers, in the organization of rural credit associations, and in the stimulation of rice and corn production by better seed selection.

The total value of the nine leading crops for 1915-16 was P181,000,000 as against P160,000,000 for the year before. Rice is the first crop in the order of value, and the production was 17 per cent greater than that of the previous year; abaca and hemp come second, with high prices; sugar third; coconut fourth; corn fifth; and tobacco sixth. The crop prospects for 1917-18 are reported as excellent.

Mr. H. T. Edwards, the director of the bureau, retired under the provisions of the retirement act on June 30, 1916, and the assistant director, Mr. Adriano Hernandez, was promoted, with Messrs. Mack Cretcher and Pedro Rodriquez as assistants.

On August 1, 1916, the bureau was entirely reorganized, each division and section chief, wherever possible, being provided with an assistant for the purpose of training some one who can take over the position in case of emergency.

The year saw an increase in the scourge of rinderpest, and this is attributed by Dr. Stanton Youngberg, the chief veterinarian, to the recurrence of the 10-year period since the last very severe epidemic. This periodical occurrence of the disease has been frequently noted in British India and Egypt where rinderpest has existed for gen

erations. The difficulty of effective quarantine in a country that has few or no fences, and where small farms lie adjacent to one another for great stretches of country, and where each proprietor has one or more carabao or cattle, can easily be appreciated. While considerable progress is being made in the quarantine feature of the work, particular stress is laid upon the immunization of cattle. The demand for immunization is rapidly spreading throughout the islands, and the result is generally excellent, although some dissatisfaction was expressed in the beginning because of inexperience. During the past three years about 23,000 carabaos and cattle have been immunized against rinderpest by the bureau of agriculture. Of these more than 14,000 were native animals, of which only 77 have been reported as afterwards having contracted and died from rinderpest, which is less than four-tenths of 1 per cent. The mortality was greater among imported cattle. Most important experiments were conducted, establishing without any question the ready infection of swine from cattle sick with rinderpest and vice versa. This considerably complicates the problem of eliminating rinderpest.

Under the operations of the new locust act of the legislature, the year 1916 was very successful. The locusts were kept well within control and at far less expense to the insular government.

The enforcement of act No. 2380, providing for fiber grading and inspection, was conducted with less friction and less difficulty than the previous year, due to the general understanding now of the standards and regulations. This law has fully justified the expectations of those who were interested in securing its passage, although at first it met with considerable opposition on the part of the commercial community. Government fiber inspectors during the year 1916 inspected, stamped, and approved 1,174,663 bales of abaca (Manila hemp) and 129,263 bales of retted maguey, constituting considerable increase in abaca and more than double the maguey inspected the year before.

Adequate cleaning machines have been invented, which will greatly increase the commercial development of kapok, or tree cotton. It is largely used by the Navy for life preservers.

The experiments with the growth of American upland cotton have been discouraging and have been discontinued.

BUREAU OF SUPPLY.

This bureau reports total sales and purchases during 1916 of P13,569,680.49, an increase of P1,387,049.79 over 1915, due largely to increase in cost of articles and in part to natural increase in demand for supplies required by a growing government. Seventy-one per cent of all purchases were made from Philippine firms. With the assistance of the committee on standardization of supplies, of which the purchasing agent is chairman and the directors of the bureaus of public works and science are members, the bureau of supply has made considerable progress in improvement of the general quality of supplies purchased for the government; in reducing numbers of items carried in stock; and in saving of cost through consequent increased quantities of items adopted as standard. Successful work

has been accomplished in utilization of dormant stocks of supplies and the elimination of carelessness in ordering supplies, which is likely to result in securing inferior qualities or subsequent loss through deterioration.

The gross earnings of the division of cold storage were P467,070.26, an increase of P30,745.57 over 1915; the net earnings were P160,453.29, an increase of P22,546.92, as compared with 1915. The position of chief of the division of cold storage was abolished, effective January 1, 1916, and the duties of the position were transferred to the chief engineer in charge.

Maj. E. G. Shields retired from the position of purchasing agent on account of ill health after more than 16 years of service, and Charles H. Magee, formerly assistant director of education, was appointed to succeed him on January 16, 1916. On August 1, 1916, Cipriano E. Unson, formerly secretary of the municipal board of the city of Manila, was appointed assistant purchasing agent to succeed Mills Dean, who had resigned in order to accept an advantageous commercial offer in the United States.

BUREAU OF PRISONS.

The prison population of the Philippine Islands as of December 31, 1916, was 6,867, and the handling of this large problem was conducted upon the most humane and progressive theories of modern penology.

The prisoners compensation act (No. 2489) has been very successful, and P11,897 was paid out during the year to discharged prisoners, enabling each to have a small fund with which to start life again.

The prisoners court operated very satisfactorily, and considerable effort has been made to provide exercise and entertainments for the prisoners. The death rate in the prison hospital fell from 13.33 to 10.30 during the year, and although 755 cholera carriers were discovered, none of them showed the disease.

The industrial division of the bureau of prisons has been most successful, with net earnings of more than P78,000, largely owing to economy in production and improvement in the method of treating bejuco or rattan, from which the well-known Bilibid furniture is made. The director of prisons, while on leave in the United States, was instructed to investigate the hemp and twine industry, with a view to its introduction in Bilibid.

BUREAU OF PRINTING.

The product of the bureau for 1916 amounted to P891,000, while the cost of operation was P804,000. The true cost of printing is approximately 20 per cent less than the price charged two years ago. A new power plant was built. The cost of material and supplies used in printing business advanced a great deal, and excessive freight charges also affected the cost as elsewhere during war times. For example, the freight charges on a P825 shipment of paper received in September, 1916, were P1,085, and the freight charges on a

P100 shipment of strawboard received during the same month were P152.

PHILIPPINE LIBRARY AND MUSEUM.

Pursuant to Act No. 2572, the Philippine Library and Museum was organized from the former division of archives, patents, copyrights, trade-marks, and corporations of the executive bureau; the law library division of the Philippine Assembly; and the former Philippine Library. It is also serving as a legislative reference bureau for the Philippine Legislature. As soon as adequate museum space can be acquired there should be transferred to it various existing scientific and historical collections in the government bureaus. There are nearly 275,000 books in the library.

CODE COMMITTEE.

The code committee finished and submitted to the Legislature the new Administrative Code embodying the changes in the structure of government here pursuant to the new organic act, known as the Jones bill. This Administrative Code was adopted by the Legislature. The code committee also reported the correctional code, which embraced modern and humane theories of criminal law, and which has gone over for consideration at the next session of the Legislature.

DEPARTMENT OF MINDANAO AND SULU.

The so-called Moro problem has been handled with the greatest skill and success by the department governor, Frank W. Carpenter, and his able staff of assistants. Inasmuch as Gov. Carpenter's report is printed herewith in full, only a passing mention will be made of several features of his administration.

The year 1916 in the department government was marked by the bringing under government control of at least 3,000 square miles of heretofore unexplored country, and an area 30 per cent greater throughout the department than that of the previous year is now cultivated. Twenty-two thousand people have been brought under control and settled on agricultural lands-people who were heretofore seminomadic and living in the more inaccessible mountains. Economically, the department is going ahead very rapidly, and a very notable increase in exports took place in 1916. Bureaus of the insular government now have jurisdiction over the Department of Mindanao and Sulu, thus carrying forward the policy of assimilation into the general body of Philippine peoples of the inhabitants of the southern islands.

MANILA RAILROAD CO.

Negotiations for the purchase by the government of the Manila Railroad system were continued during the year 1916, and were finally carried out early in January, 1917. The heretofore-existing system of railroad construction and management was highly unsatisfactory to the government, which was obliged, under the terms of

law, to make good any deficit in the bonded interest of the Manila south lines. Many controversies between the government and the railroad management in the past, occasionally reaching an acute stage, finally developed into a policy of government ownership, and it is confidently expected that the resulting reorganization of the service and change in methods of acquisition of right of way and construction will materially benefit the road economically and physically. The discussion of the final purchase and assumption of government control belongs more properly to the report for next year, so passing mention only is made upon this important subject at this time. The Legislature, in passing the act authorizing the purchase of the road, was largely influenced by the fact that this is one more step in the nationalization of the Philippines, and marks the desire of the people to control their largest transportation system in their own interest.

PHILIPPINE NATIONAL BANK.

The foundation of the Philippine National Bank by act No. 2612, and its subsequent organization under the presidency of Dr. H. Parker Willis, who was succeeded by Mr. Samuel Ferguson, has been one of the most valuable contributions to economic progress ever known in the Philippines. The fact that the government is the majority stockholder of the bank and that the bank receives the bulk of treasury deposits insures the confidence of the community in its establishment, and the operation of the bank itself has been conducted with so much skill and progressive conservatism that its success has far exceeded the expectations of even its warmest friends. Great good has already been accomplished in reducing the foreign rate of exchange from the Philippines, and, also, in reducing the general rate of interest in the business community. Accommodations have been furnished to a large number of deserving agriculturists, as well as to commercial firms in the islands, and the bank is proceeding rapidly to establish branches in the Provinces. The charter authorizes the bank also to establish and operate warehouses in connection with agricultural products, and it is to be hoped that this work will be pushed to a speedy completion.

THE ARMY AND NAVY.

The harmony of the relations between the insular government and the Army and Navy has been most marked and gratifying during the year, and the United States forces under command of Maj. Gen. Hunter Liggett have given most generous support and friendly cooperation at all times.

In conclusion, the warmest and personal and official thanks of the undersigned are due to officials and employees of the insular government, who have rendered such faithful service and such loyal support and cooperation in the carrying out of administration policies.

Very respectfully,

FRANCIS BURTON HARRISON,
Governor General.

The honorable the SECRETARY OF WAR,

Washington, D. C.