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Statement by fiscal years of the customs service of the Republic of Santo Domingo, under the operation of the "Modus vivendi" and the convention of February 8, 1907, from April 1, 1905, to June 30, 1908.

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• Transferred from sinking-fund account to the fiscal-agency account on December 31, 1907.

LAW OFFICER.

The steadily widening activities in the Philippines, added to the administrative control of Cuba during the year, have continued to give rise to many matters involving important questions of law, and have made the demands upon the law officer of the bureau constant

and serious.

CIVIL OFFICIALS IN THE PHILIPPINES.

It has long been evident to the chief of this bureau that some inducement in addition to the salaries should be offered to appointees in the insular service if the high standard of officials required is to be maintained.

Service in the Philippine Islands, however attractive the duties of the office, has serious drawbacks to the American. Few of the best officials after a few years' service in the islands can seriously contemplate an indefinite stay there. The reasons for this require no explanation.

Insular officials after years of absence from the United States find themselves at great disadvantage on their return. Far from benefiting from an honorable and trying service, they find that they can not take up again their professions or occupations at home where they left off on entering the Philippine service.

This office has devoted itself increasingly to seeking a remedy to some extent for this condition. Effort has been made with considerable success, thanks to the cooperation of the Civil Service Commission, to place returning Philippine employees in the United States service at home, but at best this remedy applies but irregularly and to certain classes of employees. The bureau therefore became convinced that the only remedy lies in placing the faithful employee after a number of years of foreign service in a pension or retired status. Having arrived at this conclusion, there were still many difficulties in the way of its application, the removal of which required considerable study. It was clear that since the Philippines receive the advantage of this service such pensions or retired pay should be paid from the revenues of the islands. The reward must be commensurate with the service rendered and well within the power of the islands to pay without serious effort. With these principles in mind, in 1907 the chief of the bureau urged the enactment by the Philippine Commission of an act to accomplish the objects in view, and submitted as representing his views the following draft of an act:

An Act Providing for the retirement of certain civil employees of the Philippine government on part pay after ten or more years satisfactory service.

By authority of the United States, be it enacted by the Philippine Commission that: SECTION 1. When any officer of the Philippine government shall have had ten or more years of continuous, actual, and satisfactory service he may, upon making application thereafter, be retired from active service, and when so retired he shall receive, for a number of years equal to the number of years of such satisfactory service, compensation equal to two and one-half per centum for each year's active service rendered by him, of the average current pay received annually by him during said period of active service: Provided, That the terms of this act shall apply only to officers receiving for ten or more years at the time of retirement an annual salary of not less than six thousand pesos: And provided further, That the terms of this act shall apply only to citizens of the United States.

The chief of the bureau convinced himself by personal interviews that this act met the approval of practically every prominent official of the Philippine government. There was, however, one difficulty. While the chief of this bureau, pecuniarily disinterested, might with propriety urge this legislation, there was a delicacy on the part of the commission restraining them from the enactment of a law with no American precedent and of which they were naturally to be among the principal beneficiaries.

It is for the foregoing reason and the urgent necessity of the action proposed that I recommend that Congress be asked to enact a law of the nature indicated. The required expenditures would be made. from Philippine revenues and would never exceed $100,000 a year.

While this is hardly the place to explain the limitations of the proposed act, it is thought that every point is susceptible of a simple and satisfactory explanation.

PERSONNEL.

OFFICERS.

The act of Congress of March 2, 1907, provided for the detail of an officer of the army as assistant to the chief of the bureau, with the rank of major. This provision gave legal permanency to a place theretofore filled, through necessity, temporarily by the detail of an officer on detached service from the line of the army. This act served, therefore, for a time to relieve the line of so much of the burden of detached duty as was chargeable to this bureau, and, through the detail of a captain to the vacancy thus created, enabled the additional rank to serve as a suitable reward for the additional labor inseparable from the office; but since it gave only permanency to a position already temporarily filled, it did not serve actually to increase the working strength of the bureau. The attainment of his majority, through regular promotion in the line, moreover, has recently made necessary the relief of the officer first detailed and the appointment of his successor, and directed attention to the periodical crippling of the bureau that must occur whenever the legally detailed assistant is relieved, provided no trained successor be available.

The provision for the exercise of the higher responsibilities of the bureau by officers of the army is, I believe, a wise one, not only because of their training but through their familiarity both with the administrative methods of the department and with the field of the bureau's labors. The bureau has, I believe, moreover, been fortunate in all of the selections so far made for duty therewith. Nevertheless, much of its work presents not only a mass of detail wholly outside of a military character but problems of a nature that only experience with similar problems, as well as superior individual ability, can assure correct solutions. In the present case the difficulty presented has been met temporarily under your direction through the continuance for the present on detached duty in the bureau of the officer relieved from detail under the act of 1907. But aside from the embarrassment that might have been incident merely to a change this course has been rendered necessary by the increasing volume of work flowing through the bureau. Moreover, with a constantly widening field of activities in the possessions under the administrative control of the bureau, this volume of work is not likely ever to decrease. For both these reasons, therefore, it would seem in the interests of efficiency to make legal provision for two assistants in the bureau. It is perhaps unnecessary to add that the nature of the work is such, of course, that with the limited personnel of the bureau only officers of considerable experience and known judgment can properly be charged with responsibilities affecting so many important interests; and if, therefore, as is hoped, an additional assistant can be authorized, this consideration will require provision for the accompaniment of suitable rank, such as colonel, to insure securing both the experience and qualities of mind necessary.

CLERKS.

Pursuant to the approval of the recommendation contained in my report of last year, 14 clerkships of the $900 class were discontinued July 1, 1908, and the civilian force since that date has consisted of 71 employees, with salaries aggregating $87,400.

With the increased activities in all the insular possessions and the additional duties falling upon the bureau, its work is steadily increasing, and with this limited force it has been difficult at times to keep the work up to date and at the same time give to employees the leave authorized by law. To insure both these results, indeed, considerable overtime work has been required during the year. To meet this condition the bureau estimates for the succeeding year, as originally submitted, included an increase in the total number of employees to 77, and in the total of the salaries to $98,690, which latter covered also a proposed increase in the salary of a few employees, including the chief clerk and chiefs of divisions. These estimates, however, were returned with instructions not to exceed the present appropriation, and they were accordingly submitted anew without these needed changes. It should require no argument to show that the present salaries of departmental employees, fixed almost sixty years ago, can not be expected to meet present conditions, with the increase in cost of living that has occurred during the past few years. Congress has recognized this increased and increasing cost of living by liberal additions to the salaries in other branches of the Government, and it would seem only just that corresponding liberality should be shown in the cases under consideration.

Again, while some plan for the ultimate retirement with some proportional part of their pay of civil-service employees who devote the best years of their lives to the Government appears necessary to the maintenance of efficiency in the service, it can not appear wholly just to draw largely on the present limited salaries of these employees to establish the fund necessary for this purpose.

During the past year 10 clerks have left the bureau by transfer or resignation, and 2 are still with the provisional government of Cuba. In general efficiency the office force of the bureau is believed to compare more than favorably with the average, and considering the quantity as well as the variety of work involved and the results accomplished, there remains almost without exception only high commenda

tion for all.

Respectfully submitted.

CLARENCE R. EDWARDS, Brigadier-General, U. S. Army, Chief of Bureau.

The SECRETARY OF WAB.

REPORT OF THE PHILIPPINE COMMISSION TO THE

SECRETARY OF WAR.

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