the decrease from the same cause in 1913 was but 54. Many of these boats have already been replaced, as Philippine built vessels of small tonnage constituted the greater portion of those wrecked or destroyed.

Four hundred and four vessels have been inspected by the hull and boiler division during the year, an increase of 6 over the total for the fiscal year 1913, of which 309 were steamers and 95 sailing vessels. Twenty vessels were awaiting inspection at the close of the year and 11 were recorded as being out of commission. One hundred and seventy-three vessels were admeasured, 77 of which were steamers, 6 steam launches, 39 sailing vessels, 18 motor boats, and the remainder were boats of the smaller types.

Frequent sanitary inspections by a medical officer in the employ of the bureau of customs and periodical examinations and tests by steamship inspectors during the year of the life-saving and fire equipment of coast wise vessels have effectively guarded the health and safety of both passengers and crews, for the only lives lost during the year through marine accidents, etc., have occurred on small water craft exempt from inspection.

IMMIGRATION AND EMIGRATION.

During the calendar year 1914, 17,076 persons sought admission to the Philippine Islands and 17,136 departed therefrom. Of the number who entered 4,032 were immigrants and of the number departing 1,364 were emigrants, an apparent gain to the islands by immigration of 2,668 residents. During the same period 9,181 resident aliens departed from the islands with the intention of returning thereto within one year, and 7,200 of those who had previously departed with the same intention returned from abroad.

There were 3,296 citizens of the United States who departed from the islands during the year, whereas but 2,466 entered; also, 1,410 Filipinos left the islands during the year and only approximately one-half that number, or 736, returned. There was a marked increase in the number of Chinese who entered the islands for the first time during 1914, but the number of Japanese and East Indian immigrants was considerably less than in 1913.

DIVISIONS TRANSFERRED TO THE BUREAU OF CUSTOMS FROM THE FORMER BUREAU OF NAVIGATION.

The expense of operating the divisions of vessels and lighthouse maintenance, which, together with the marine railway and repair shop, were transferred to the bureau of customs by Act No. 2308, was reduced without detriment to the public service from $710,738.79 in 1913 to $499,790.55 in 1914. A brief statement of the operation of these divisions and reference to interisland transportation and the marine railway and repair shop follows.

Division of vessels.-There were in operation during the year the cable ship Rizal, the cutters Polillo, Samar, Mindoro, Basilan, and Corregidor, the seagoing launch Ranger, and the river and bay launches Malecon, Jolo, Ethel, Ilocano, and Moro, exclusive of the launches used for strictly customs purposes. The cutter Negros and the seagoing launch Scout were in use by the bureau until June and March, 1914, respectively.

The cable ship Rizal was engaged in cable-repair work only a few days during the year, and when not required for other official purposes was chartered to private parties for salvage work or for transporting freight within Philippine waters or in waters adjacent to the Philippine Islands. The earnings of the Rizal from this source during the year amounted to $32,697.81.

The cutters have been engaged mainly in the transportation of official passengers and freight and in lighthouse work, and the sums collected for the services rendered to the various bureaus and provincial governments by the division during the calendar year 1914 amounted to $154,828.

The cutter Mindanao is still under charter to the department of Mindanao and Sulu, and the expense of its operation is borne entirely by that department. The seagoing launch Ranger is constantly used by the bureau of constabulary in southern waters. A number of vessels not longer required by the Philippine government were disposed of during the year, among them were the cutter Panay, the seagoing launches Scout and Rover, and the river and bay launch Guy Howard.

The cost of operating government transportation during the calendar years 1913 and 1914, deducting from the former year the expense of launches transferred to the bureau of public works under the provisions of Act No. 2308, was as follows:

1913.

1914.

$610, 750. 44 409, 636. 80

Lighthouse maintenance division.-There were 148 lights of various types maintained by the Philippine government in 1913. At the close of December, 1914, there were 151, and since the latter date acetylene lights have been established on Comiran Island, Black Rock, and Manucan Island, in the Sulu Sea, which assures a well-lighted route between Balabac Straits and the islands of Panay and Negros. It is proposed to establish lights in the near future on an island north of Alabat, in Lamon Bay, east of Luzon; on the island Sibago, near the east entrance to Basilan Straits; and on the island of Tatalan, in the Tapiantana group, between the islands of Basilan and Jolo.

Owing to the satisfactory results that have been obtained by the use of acetylene lights, they are being gradually substituted for the smaller flashing and occulting lights which are more expensive to maintain.

The cost of operating the lighthouses in the Philippine Islands, not including the expense of lighthouse tenders, which is borne by the division of vessels, during the calendar year 1914 was $90,153.75, compared with $99,988.35 in 1913.

Marine railway and repair shop.-The shop, which is conducted without appropriation, has confined its operations to government work, for which a charge has been made equivalent to the cost of labor, material, supervision, etc., plus a surcharge of 10 per cent.

A dispensary has been maintained at Engineer Island for the benefit mainly of the employees of the marine railway and repair shop and the division of vessels. During the last calendar year there were treated by the medical inspector and his assistants 2,408 cases, and minor operations were performed and dressings applied to the number of 1,412.

The value of the work performed for the various insular bureaus, provincial governments, and for the quartermaster department of the United States Army was $293,767.51 in 1914.

Interisland transportation. At the beginning of the year there were in operation eight steamship lines, all but one of which were paid subsidies by the Philippine government. The contracts expired, however, on July 26, 1914, and were renewed for the balance of the year on routes Nos. 1, 2, and 3A under the provisions of Act No. 2351, by which $10,000 was appropriated. Route 10B, between Manila and Cebu, was also continued by contract but without the payment of a subsidy.

Expense of conducting the bureau.-The operation of the entire bureau was carried on during the calendar year 1914 at a total cost of $529,637.85, which is $103,769.77 less than the total expense for 1913. Of the former amount, $510,926.70 was borne by the insular government and $18,711.15 by the department of Mindanao and Sulu.

BUREAU OF INTERNAL REVENUE.

CHANGE IN PERSONNEL.

The following changes in the personnel appointed by the Governor General took place during the year 1914:

Mr. James J. Rafferty, formerly collector of customs of the port of Zamboanga, was appointed collector of internal revenue January 10, 1914, vice Mr. William T. Nolting, appointed director of posts. Mr. Venancio Concepción was appointed February 1, 1914, deputy collector of internal revenue, vice Mr. Henry Steere, resigned.

COLLECTIONS.

The following is a summary of the collections made by the bureau of internal revenue during the calendar years 1913 and 1914:

Sales of public mineral lands (Act of Congress approved July 1, 1902)..
Sisiman Matadero...

Subscription to publicity fund..

Grand total....

88,602.31 139, 869. 59

55,836. 10
298.72
1,767.69
56, 311.31

12, 178. 10

1914

17,986, 137. 52 672,517.36

715, 806.64 2, 175, 566, 11 717, 104.96 255, 307.67 43, 400.92 261, 084.43 4,090, 130.00 442,660, 61 30.32

363,398, 19 285, 932.85 39, 220.92 135, 280. 13 211, 772.37 373,272.46

3,709, 159.75 16. 188.50 í 163. 40 2,703, 64

61,062.91 2,207.81

These collections made by the Director of Lands since February 20, 1914.

The foregoing figures show that the total amount collected during the year 1914 was P22,550,109.37, as compared with a total collection during the calendar year 1913 of P22,184,901.23, an increase of P365,208.14, or about 1.6 per cent.

APPORTIONMENT OF INTERNAL-REVENUE TAXES.

Of the total amount of internal-revenue collections during the calendar year 1914 there accrued to the insular treasury 9,399,511.16, to provincial treasuries, P4,705,182.81, and to municipal treasuries, 3,390,332.60, as compared with P9,204,091.52, P4,689,091.58, and 3,364,723.72, respectively, for the year 1913.

COST OF COLLECTION.

The net cost to the government for the operation of the bureau of internal revenue during the year 1914 was P551,795.10, as compared with P600,044.26 for the fiscal year 1913. The total collections for the year under consideration being #22,550,109.37, this makes the cost of collection 2.45 centavos for each peso collected, as compared with 2.64 centavos for each peso collected during 1913.

ALCOHOL PRODUCTS.

Distilled spirits.-The total output from registered distilleries during the year was 11,847,354 proof liters, being over 8 per cent more than during the preceding calendar year when the production was 10,813,114 proof liters. The quantity of denatured alcohol used for industrial purposes, and removed without payment of taxes, was greater by over 120,000 proof liters than the quantity so removed during 1913, and almost three times as much as was used during the fiscal year 1912.

On December 31, 1914, there were in operation throughout the islands 79 registered stills of modern type, as compared with 75 in operation December 31, 1913. Sixty-six illicit stills were captured by internal-revenue agents during the year 1914.

Wines. A slight falling off is shown in taxes collected on imported wines, but this is more than offset by the increased collections on the domestic product.

The following comparative statement shows the quantity of domestic and imported wines and imitation wines on which taxes were collected during the calendar years 1913 and 1914:

Fermented liquors.-Taxes were collected during the calendar year 1914 on 4,394,155.50 gauge liters of beer, of which 3,915,000 liters were of domestic make and 479,155.50 were imported, as compared

with 4,238,263.50 gauge liters for the preceding year, of which 3,765,000 liters were of domestic manufacture and 473,263.50 were imported.

There were exported during the year 1914, 79,387 gauge liters of domestic beer, as compared with 57,223 liters during 1913. The total output of domestic beer exceeded that of the year 1913 by 155,892 gauge liters.

TOBACCO PRODUCTS AND MATCHES.

Smoking and chewing tobacco.-The following comparative statement shows the quantities of domestic smoking and chewing tobacco on which taxes were collected during the calendar years 1913 and

Taxes were collected also on 253,133 kilos of imported smoking and chewing tobacco in 1913 and on 273,772 kilos in 1914.

In addition to the domestic smoking and chewing tobacco consumed in these islands on which the tax was paid, the exports of smoking tobacco during the calendar year 1914 to other countries amounted to 42,603 kilos, as compared with 55,156 kilos in 1913.

Cigars. The total production of cigars during the year 1914 was 243,134,200, against 282,096,996 in 1913, a decrease of 38,962,796. Of the first number 90,624,757 were consumed in the Philippine Islands, 93,171,150 were exported to foreign countries, and 59,338,293 were shipped to the United States, as compared with 94,048,488, 113,916,608, and 74,131,900, respectively, in 1913.

The decrease of cigar trade with Europe is due chiefly to the effect of the European war, while the cigar trade with Australia has also been affected by the war and the new import duty established in that country. One cause of the decrease of the cigar trade with the United States, according to investigations made into the matter, appears to be the reaction following the dumping of a large quantity of cigars on consignment on the market in 1912, which were in part disposed of either at a loss to the manufacturers, or became worm-eaten and musty, resulting in the retirement of several factories from the export business in the following year. Another reason for the decrease is probably the lack of systematic advertising of Philippine cigars in the United States.

As our cigar trade with Europe and Australia has been greatly affected by the war, we must sell in the vast market of the United States the cigars which the two countries first named fail to take from us. The tobacco industry being one of the largest sources of wealth of these islands the government should make every effort to promote the trade of this staple in general, and the trade with the United States in particular, since from every 1,000 cigars sent to the United States we receive a revenue of P6, which the United