the United Kingdom, Canada, Japan, and France. Philippine shipments to the United States were valued at $92,131,525. At the present time, the Commonwealth government is in excellent financial condition. However, the matter of adjusting the Islands' economy as contemplated in the Independence Act, to a position independent of free trade with the United States, presents a most serious problem for the future. In addition to the changes in the economic system of the Philippines which will be brought about by the Independence Act, world conditions caused by the war have already seriously disrupted foreign markets for Philippine products and the supply of ocean-going vessels to carry such products. It is well recognized in the Philippines that these problems will bring about widespread changes and they are being given serious consideration by Commonwealth officials. A large part of the revenues of the Commonwealth government is derived from the refund of excise taxes collected in the United States. Congress requires that these funds be separately budgeted and accounted for and used for the purpose of preparing the Philippines for the responsibilities of independence. Reports from the United States High Commissioner indicate that the Commonwealth government is making an earnest effort to utilize these funds as required by Congress. One of the principal functions of the Division of Territories and Island Possessions, insofar as the Philippine government is concerned, is to exercise general control and supervision over Philippine bonds and currency reserve funds for the purchase of bonds, payment of interest, and purchase of supplies. During the year ended June 30, 1940, payments in total amount of $8.483.904.02 were made from funds of the Philippine government. Of this amount $2,220,338.27 was for supplies purchased in the United States and shipped to the Philippines, $3,190,431.75 was for the purchase of Philippine bonds, $2,567,555.00 was for interest on the Philippine public debt, and the remaining $505,579.00 covered payment of salaries and expenses of Philippine personnel in the United States, pensions to retired Philippine employees, and for other miscellaneous purposes. The Division, working closely with the Resident Commissioner from the Philippines, has endeavored to combat any legislation which would militate against Philippine interests. Bills continue to be introduced which discriminate against the rights of Filipinos in the United States as to employment, etc., on the ground that they are not citizens. The policy of this Department has been to endeavor to secure in the United States during the Commonwealth period the same treatment for Filipinos that is accorded American citizens in the Islands. Bank suits.When the functions of the Bureau of Insular Affairs of the War Department were transferred to this Department there were a number of bank suits pending in the courts in connection with Philippine deposits that had been paid in full from the collateral furnished the Chief of that Bureau by the banks. These suits, inherited by this Department, were finally disposed of on March 25, 1940, when the United States Supreme Court decided that the action of the War Department and its officials had been in accordance with the law. National Assembly of the Philippines.-The year 1939 was remarkable for the volume of domestic legislation and for the number and importance of laws which markedly affected business and finance. Nearly 100 measures were passed and approved during the year. Among the more important of these were the immigration bill, approval of amendments to the Philippine Constitution, the general appropriation bill, providing for the expenditure of coconut oil excise tax refunds for the fiscal years 1940 and 1941, declaring Tagalog an official language in 1946, creating a National Coconut Corporation, a National Tobacco Corporation, a Bureau of Immigration, and a Department of Health and Welfare in the city of Manila. A measure amending the Internal Revenue Code, passed at the previous session, and the recent immigration bill require approval by the President of the United States before becoming law. The latter establishes a quota of 500 immigrants annually for each foreign nationality. The United States Immigration Act of 1924 was not applicable to the Philippines. The following proposed amendments to the Constitution were submitted to the people at a plebiscite held on June 18, 1940: 1. Reduction of the tenure of the President and Vice President from six years, without reelection, to four years, with one reelection. 2. Establishment of a bicameral legislature through revival of the Senate, to be composed of 24 members at large, and increasing salaries of members of the legislature. 3. Establishment of a Commission on Elections which shall take charge of the conduct of all elections. All amendments were approved by the people in a plebiscite held on June 18, but at the end of the fiscal year had not been formally submitted to the President of the United States. NEW OPPORTUNITIES FOR PUERTO RICANS. Finding new ways for improving economic conditions in the Island is one of the conservation problems tackled by the Puerto Rico Reconstruction Administration. Upper: Curing vanilla beans under the program for establishment of this new industry. Lower: Chicken raising on ranches like these is another new commercial development. ADMINISTRATION William D. Leahy, Administrator D URING the fiscal year ending June 30, 1940, the Puerto Rico Reconstruction Administration continued its broad rehabilitation program, chiefly rural, designed to afford employment and to help the Puerto Ricans help themselves. So far as the legal restric-' tions on availability of relief money permitted, the Administration continued its search for practical solutions to some of the basic Insular economic and social problems, through the medium of demonstration projects undertaken on a small scale under competent leadership. New opportunities were created for individual betterment through providing rural people with hurricane-proof dwellings, small parcels of land for the cultivation of cash and subsistence crops, agricultural and marketing advice, instruction in the control of soil erosion, etc. Funds were derived principally from $7,000,000 appropriated by the Emergency Relief Appropriation Act of 1939, together with balances of approximately $575,000 reappropriated from the Emergency Relief Appropriation Act of 1938 and $1,290,930 available from the Puerto Rico Special Fund for obligation in 1940; and $122,500 allotted out of the Puerto Rico Revolving Fund. The funds available during the fiscal year ending June 30, 1940, were obligated for the following purposes and amounts: Rurual rehabilitation____. Engineering, including construction for rural rehabilitation_. Forestation____ Loans and assistance to farmers and cooperatives_ Housing management.... Administration__ Miscellaneous items_. $3, 268, 970 3, 171, 878 1,031,940 227, 100 701, 912 122, 500 451, 460 12, 670 Total obligated $8,988, 430 By Executive Order of November 30, 1939, the Honorable William D. Leahy, Governor of Puerto Rico, was designated Administrator to succeed the Honorable Harold L. Ickes, Secretary of the Interior, who had resigned. |