change, in his discretion, with any provincial treasurer, pursuant to a resolution of the Provincial Board, Philippine curency for Mexican and Spanish-Filipino currency at the authorized ratio at the time which provincial funds were received at the insular treasury for such exchange. Likewise all officers of the government were directed to make all contracts payable in the Philippine or United States currency, at the option of the government, and all existing contracts otherwise payable were directed to be adjusted to the new basis as soon as practicable. The accounts for the fiscal year 1904 will be rendered and settled as far as practicable in Philippine currency, with the previous approval of the civil governor and Secretary of War.

"The most encouraging feature in the accounting work is the early adoption in full of a stable currency. That the government will be able to eliminate Mexican and Spanish Filipino currency from official circulation after December 31st next is a foregone conclusion, and that this will be done without injury to any interests is apparent, due largely, however, to the very great volume of United States currency injected into the circulating medium of the Islands since American occupation."

As to the working of the new Currency Law after December 31, 1903, I quote from Mr. Kemmerer:

"The only forms of money made legal tender by the Act of Congress, approved March 2, 1903, for contracts made after December 31, 1903 (undess otherwise expressly provided by contract), are: (1) 'Gold coins of the United States at the rate of one dollar for two pesos,' legal tender to any amount; (2) 'Philippine silver pesos, legal tender to any amount; (3) 'Philippine subsidiary silver pesos,' legal tender to any amount; (4) 'Philippine subsidiary silver coins,' legal tender to the 'amount of ten dollars." "

Philippine silver certificates, while not a legal tender, are "receivable for customs, taxes, and for all public dues in the Philippines," can be counted as part of a

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bank's lawful reserve, and are redeemable on demand by the Philippine government in Philippine silver pesos, which are a full legal tender. Philippine subsidiary silver coins, while only legal tender to the amount of ten dollars, are, like Philippine minor coins of nickel and copper, exchangeable on demand at the insular treasury or at any provincial treasury, when offered in sums of ten pesos or any multiple thereof, for Philippine silver pesos of full legal tender.

The question of the receivability of currency for public dues is entirely distinct from the question of legal tender. The Supreme Court of the United States (Lane County vs. Oregon), as well as the Supreme Courts of several states (see, for example, N. J. Supreme Court decisions-City of Camden vs. Allen, 1857), has taken the position that a tax is not a debt in the sense of that word contemplated by legal-tender laws. Section 7 of the Act of Congress, appoved March 2, 1903, provides. "that the Mexican silver dollar now in use in the Philippine Islands, and the silver coins heretofore issued by the Spanish government for use in said Islands, shall be receivable for public dues at a rate to be fixed from time to time by proclamation of the civil governor of said Islands until such date, not earlier than the first day of January, nineteen hundred and four, as may be fixed by public proclamation of said civil governor, when such coins shall cease to be so receivable." In accordance with this provision the civil governor issued a proclamation on October 23d, providing that "Mexican silver dollars shall be receivable for public dues at a rate to be fixed from time to time by proclamation of the civil governor, until the first day of January, nineteen hundred and four, and that on and after that date such coins shall cease to be so receivable.”

CHAPTER XIX.

THE GOVERNMENT AND RELIGIOUS CONDITIONS.

THE path that Philippine officials have been called to tread has been far from easy. Conditions were new. Problems familiar in some aspects in our own national past took on features wholly unfamiliar, and called for expedients never before used by rulers of American blood. Nearly all the members of the Civil Commission were inexperienced in Oriental life, or had acquired little more than ordinary familiarity with conditions prevailing among Asiatic peoples in the tropics.

In the religious aspects of their duties there were the most vexatious and delicate complications. Here was a people who had no acquaintance with a government that rigidly separated things that differ so widely as the functions of the Church and State. Spanish leaders had no knowledge of the possibility of governmental neutrality in religious matters. These were yet under the leadership, in Manila, at least, of priests equally blind and warped. If officials did not accede to all petitions for civil interference in religious squabbles they were denounced as Protestant sympathizers. If they insisted that no Catholic should teach religion in the public schools, the conclusion was instantly drawn that they proposed to make these schools Protestant. Stories were set afloat to the effect that Protestant ministers and missionaries were largely represented in the body of publicschool teachers, and that their faith was threatened.

When Protestant missionaries appeared on the scene the situation was still more complicated. Friars could not comprehend that toleration did not mean support. Doubtless many of these mediævalists yet believe that the officials are secretly supporting the Protestant movement with public funds, and giving us official aid and comfort in other ways, and all this for the simple reason that they try to be fair and maintain inviolate separation between the Church and State, which has been our policy from the dawn of the Republic.

With the advent of the Independent Catholic Church movement, better known as the Aglipay movement, from the name of the priest who stands forth as the leader, confusion became more than ever confounded for the Catholic of conventional ideas as to the oneness of things civil and religious.

One case will illustrate what is meant. In the summer of 1901 the Filipino priest of Tarlac, province of Tarlac, Father Eusebio Natividad, complained to Governor Taft that the Municipal Council of that city had attempted, by ordinance or resolution, to regulate the fees which he was charging for religious functions performed by him as priest. Governor Taft at once addressed a letter to the civil governor of the province, Captain Wallis O. Clark. The letter was intended to meet all similar cases, and was therefore ordered put into a number of native languages and given the widest possible publicity. It was the plainest possible statement of our historic position as to the relegation of Churchly affairs to Churches, and the management of civil affairs by officials of the State. It is too long to reproduce here, but was what would have been considered even platitudinous in any American circles, so simply did it put the familiar truths and some of the chief reasons for our