FOR SAILING VESSELS.

At the rate of four working days for every 100 tons' cargo being unloaded. The corresponding number of days shall be allowed for the loading of said vessels. These allowances may be increased by the harbor master in his discretion. PAR. XLIX. Vessels which have finished discharging shall, within twent-four hours, unless the harbor master shall otherwise direct, anchor behind the breakwater until they are ready to take on cargo, when they shall be permitted to enter the river. PAR. L. Lighters and cascoes shall load or unload promptly, and then move at once to make room for others.

PAR. LI. Empty lighters having no work on hand shall not remain in the working parts of the river, but shall lie inside the breakwater or in the river above the Bridge of Spain, and well clear of the channel.

PAR. LII. The floating in the river, without special permission, below the Bridge of Spain, of loose timber or logs, or what is known as sack rafts of timber or logs, shall not be permitted.

PAR. LIII. Vessels or other craft shall not be permitted to tie up or anchor in the navigable channels of the Pasig River in such a manner as to prevent or obstruct the passage of other vessels or craft, nor to obstruct or endanger the government dredges, towboats, or scows, or other floating plants in their work of improving the river and harbor, nor to navigate the Pasig River and navigable channels thereof at a rate of speed that may endanger other vessels or craft that may be at anchor or under way, nor shall anyone voluntarily or carelessly sink or permit or cause to be sunk, vessels or other craft in navigable channels, nor float loose timber and logs in streams or channels actually navigated by steam vessels in such a manner as to obstruct, impede or endanger navigation.

PAR. LIV. Whenever a vessel, raft, or other craft is wrecked and sunk in a navigable channel of the Pasig River, accidentally or otherwise, it shall be the duty of the owner of said sunken craft to immediately mark it with a buoy or beacon during the day and a red lantern at night and to maintain such marks until the removal of the sunken craft, and it shall also be the duty of said owner to commence the immediate removal of the same and to prosecute said removal with due diligence.

PAR. LV. Whenever the navigation of the Pasig River shall be obstructed or endangered by any sunken vessel, boat, water craft, raft, or other similar obstruction and such obstructions have existed for a longer period than thirty days, or whenever the abandonment can be established in a less space of time, the sunken vessel, boat, water craft, raft, or the obstruction may be broken up, removed, sold or otherwise disposed of by the harbor master, at his discretion, with the approval of the collector of customs.

PAR. LVI. Vessels loaded with petroleum or other inflammable liquids shall not be permitted to enter the Pasig River without first obtaining permission from the harbor master, who shall indicate the place where such vessel shall moor and discharge. Whenever such vessels are not being discharged, their hatches shall be closed. No fires or smoking shall be allowed on vessels loaded with petroleum or other inflammable liquids, and at night watch shall be maintained.

PAR. LVII. Gunpowder and other explosive compounds shall not be allowed in the Pasig River except for government use, and under direct charge of government officials and by special permit from the harbor master.

PAR. LVIII. Lighters loaded with "nipa" shall not be allowed to stop in the Pasig River below the Bridge of Spain.

PAR. LIX. Lights and fires of any kind, except the regulation harbor lights at night, shall not be permitted on board any lighter carrying inflammable liquids or explosive compounds. Each lighter used for that purpose shall be provided with two barrels of sand (of at least 50 gallons' capacity each), ready for instant use. Smoking on board shall not be permitted.

PAR. LX. Any vessel or other water craft in the Pasig River shall, when a case of sickness occurs on board, immediately hoist the regulation quarantine flag, and keep the same flying until visited and passed upon by the inspector of the board of health. The flag shall be a square yellow flag, and shall be of sufficient size, and so placed, as to be plainly visible.

PAR. LXI. The use of steam whistles in the Pasig River, other than to give the prescribed signals for avoiding accidents, shall not be permitted, and patrons offending against this regulation shall be punished by the revocation of their licenses.

PAR. LXII. No heavily loaded casco, lighter, or other similar craft shall be permitted to move in the Pasig River without being towed by steam or other adequate power.

W. MORGAN SHUSTER,
Collector of Customs for the
Philippine Islands.

EXHIBIT NO. 7.

REPORT OF A. W. HASTINGS, ACTING COLLECTOR OF INTERNAL REVENUE.

MANILA, P. I., October 19, 1903.

SIR: In compliance with circular letter of August 21, from the Hon. James F. Smith, acting secretary of finance and justice, I have the honor to submit the following report covering the operations of this department during the period from September 1, 1902 to August 31, 1903.

As stated in the supplement to the last yearly report, the department had jurisdiction for collection of revenue on September 1, 1902, only over the island of Mindanao (excepting the provinces of Surigao and Misamis) and the Jolo Archipelago, with 11 collectors, 6 of whom were army and marine officers, performing, in addition to their regular duties, the duties of collectors of internal revenue, and 2 native collectors, a clerical force for the entire department of only 7. The clerical work in the office of the acting collector for the islands has been performed by the force of the city assessor and collector of Manila.

The officers of the Army and Marine Corps detailed as collectors have never been able to devote sufficient time to the work to make anything like a creditable showing in the way of collections, as they are never relieved from their military duties on account of such details, and on account of frequent changes in station of troops the collectors have at some places been changed by the military authorities without the knowledge of the department at all. It has frequently happened that the first intimation this office has had of a new collector being appointed has been upon receipt of reports from the officer.

From this it will be seen that the department of internal revenue has really amounted to very little during the past year outside of the work done by the head office, which has consisted in a large measure in supplying revenue stamps to all provincial treasurers, making forestry collections, and rendering opinions on all matters pertaining to the imposition and collection of the industrial and stamp taxes for all parts of the island, including provinces where civil government has been established.

The acting collector of internal revenue has also been called upon to act as adjuster between the provincial treasurers and the city of Manila in making industrial tax collections from companies paying 5 per cent of their profits as industrial tax, which has been held to exempt such companies from the payment of any additional industrial tax on their agencies in the various provinces. To this end the acting collector has issued certificates to companies paying 5 per cent of their profits, showing that such payments had been made and that no further industrial tax should be demanded from their agencies. Some provincial

treasurers have honored these certificates by not exacting any industrial tax, while others have ignored them and have forced the agencies of these companies to pay the regular industrial tax according to the classification of the business done.

In view of this unsystematic method, the matter was brought to the attention of the honorable acting secretary of finance and justice, with a view of establishing a system whereby the entire tax should be collected from such companies by the city assessor and collector of Manila, or the provincial treasurer, as the case might be-collections to be made from the main office of such companies, and the tax thus collected distributed to the various provinces and the city of Manila where agencies were located according to the volume of business done in each province. This scheme has met with considerable opposition from the treasury department and from the auditor, and at the time this report is being prepared no final action has been taken in the matter.

On account of the deplorable condition of most of the outside offices and of the extremely small collections, due to the fact that the collectors had not the time to devote to their duties, and to the frequent changes cited above, it was deemed advisable to appoint a competent American as district collector at Zamboanga. After securing the approval of the honorable secretary of finance and justice, Mr. W. N. Bish was appointed district collector at Zamboanga January 1, 1903, at a yearly salary of $1,800. The army and marine officers and customs officers acting as collectors were gradually relieved and subdistrict collectors were appointed at Cotabato, Davao, and Dapitan, with instructions to make all collections, either personally or by deputies, in their respective districts. On August 31 Lieutenant Buttrick, at Basilan, was the only army or marine officer on duty in this department. These changes were very satisfactory, and the collections began to show very substantial increases.

On August 31 the department consisted of one district collector, four subdistrict collectors, one of whom was collector of customs at Jolo and acting collector of internal revenue at the same place, with a force of 7 clerks for the entire department.

No change has been made in territory over which the department has jurisdiction since supplement to last annual report.

The following is a summary of the internal-revenue stamps handled by the department during the period covered by this report:

On hand September 1, 1902

Received from printers

Received from other offices

Total.

Invoiced to office of city assessor and collector

Invoiced to other offices

Mexican currency.

Condemned and destroyed by committee appointed by acting executive secretary, March 16, 1903 ..

Balance on hand, August 31, 1903.

Total....

$895, 929.07 338, 102.00 14,951.95

1, 248, 983. 02

177, 059. 20 85, 469. 30

226,900.37 759, 554. 15

1, 248, 983. 02

The statements attached show the collections at each of the outside offices and at Manila and the cost of making collections. The percentage of expenses to collections for the department, including Manila, has been about 6 per cent. In making this comparison of expenses to

collections it should be borne in mind that internal-revenue stamps are furnished by this department free of charge to the city of Manila and all the provincial governments in the islands. The 20-cent cedula, or certificate of registration, is still in force in those parts of the islands under jurisdiction of this department, while the 1-peso cedula is in force in all organized provinces. The cost of issuing the 20-cent cedula is practically the same as 1-peso cedula, while there is a vast difference in the revenue.

Respectfully submitted.

A. W. HASTINGS, Acting Collector Internal Revenue.

The honorable the SECRETARY OF COMMERCE AND JUSTICE,

Manila, P. I.