of the carrying monopoly is not surprising, but it
is thought that immediately-operative legislation to that end would
be impracticable. The latest legislation on the subject confines the
carrying-trade between the Islands and the United States to American
bottoms from July 1, 1906. It is alleged that the success of the new
regulations which may (or may not, for want of American vessels)
come into force on that date will depend on the freights charged;
it is believed that exorbitant outward rates would divert the hemp
cargoes into other channels, and a large rise in inward freights
would facilitate European competition in manufactured goods. Any
considerable rise in freights to America would tend to counterbalance
the benefits which the Filipinos hope to derive from the free entry
of sugar and tobacco into American ports. The text of the Shipping
Law, dated April 15, 1904, reads thus; "On and after July 1, 1906, no
merchandise shall be transported by sea, under penalty of forfeiture
thereof, between ports of the United States and ports or places of
the Philippine Archipelago, directly, or _via_ a foreign port, or
for any part of the voyage in any other than a vessel of the United
States. No foreign vessel shall transport passengers between ports of
the United States and ports or places in the Philippine Archipelago,
either directly, or _via_ a foreign port, under a penalty of $200
for each passenger so transported and landed."

The expenses of the Civil Government are met through the insular
revenues (the Congressional Relief Fund being an extraordinary
exception). The largest income is derived from the Customs'
receipts, which in 1904 amounted to about $8,750,000, equal to about
two-thirds of the insular treasury revenue (as distinguished from the
municipal). The total _Revenue and Expenditure_ in the fiscal year
1903 (from all sources, including municipal taxes expended in the
respective localities, but exclusive of the Congressional Relief Fund)
stood thus:--

Total Revenue $14,640,988
Total Expenditure $15,105,374
Excess of Expenditure over Revenue 464,386
========== ==========
15,105,374 15,105,374

In 1903, therefore, Government cost the inhabitants the equivalent
of about 46 per cent, of the exports' value, against 45 per cent, in
Spanish times, tak