In his letter of instructions to the Secretary of War, April 7, 1900, President McKinley said of his commission and its purposes:

"The Commissioners named will meet and act as a board, and the Hon. William H. Taft is designated as President of the Board. It is probable that the transfer of authority from military commanders to civil officers will be gradual and will occupy a considerable period. Its successful accomplishment and the maintenance of peace and order in the meantime will require the most perfect co-operation between the civil and military authorities in the island, and both should be directed during the transition period by the same executive department. The Commission will therefore, report to the Secretary of War, and all their actions will be subject to your approval

and control.

"You will instruct the Commission to proceed to the city of Manila, where they will make their principal office, and to communicate with the Military Governor of the Philippine Islands, whom you will at the same time direct to render to them every assistance within his power in the performance of their duties. Without hampering them with too specific instructions, they should in general be enjoined, after making themselves familiar with the conditions and needs of the country, to devote their attention in the first instance to the establishment of municipal governments, in which the natives of the islands, both in the cities and in the rural communities, shall be afforded the opportunity to manage their own local affairs to the fullest extent of which they are capable, and subject to the least degree of supervision and control which a careful study of their capacities and observation of the working of the native control show to be consistent with the maintenance of law, order and loyalty. "The next subject in order should be the organization of government in the larger administrative divisions corresponding to countries, departments, or provinces, in which the common interests of many or several municipalities falling within the same tribal lines, or the same natural geographical limits, may best be subserved by a common administration. Whenever the Commission is of the opinion that the condition of affairs in the islands is such that the central administration may safely be transferred from military to civil control, they will report that conclusion to you, with their recommendations as to the form of central government to be esablished."

On July 4, 1901, the president of the commission became civil governor and the other four members were appointed on September 1 in charge of government departments. At this time also three Filipinos were added to the commission, which was again increased by act of Congress on May 11, 1908, to nine members. William H. Taft was appointed the first governor, but early in 1904 he resigned and was succeeded by Luke E. Wright, who held office until April 1906, when Henry C. Ide became governor-general, he in turn giving way to James F. Smith, the present incumbent, on September 20, 1906.

By the Congressional law of July 1, 1902, it was provided that, should the islands be peaceful for a period of two years after the publication of a census, the commission should call an election for delegates to a general assembly to take over the legislative powers hitherto exercised by the Philippine Commission. This census was completed and published in March 1907 and as the two years had passed without serious disturbance President Roosevelt issued a formal order for the election. The election law divided the 39 provinces of the islands (exclusive of Manila) not inhabited by Moros or other non-Christian tribes into 78 assembly districts, each province to constitute at least one district and the more populous provinces being divided into more districts in the ratio of one to every 90,000 inhabitants, or major fraction thereof,

remaining. The law provided that the Assembly should contain not less than 50 nor more than 100 delegates, and according to the census the number was fixed at 80, two of whom represented Manila.

The election was held on July 30, 1907, the Naçionalists, or party favoring immediate independence, elected 32 of the delegates, the other 48 being divided among the other parties as follows: Progresistas, 16; Independents, 20; Immediastas, 7; Independistas, 4; Catolico, 1. The Philippine Commission, which is the upper house of the legislature, has a veto on all measures passed by the assembly. Two resident commissioners to the United States were appointed by the assembly and the first of these were accorded seats in Congress in February, 1908. The assembly convened at Manila on October 16, 1907, and was formerly opened by Secretary of War Taft amid universal rejoicing.

Beginning with the close of the war with Spain the nation experienced an era of unprecedented prosperity. Contemporaneous with its entrance into a larger field of international affairs was an equally remarkable expansion of commerce. The export trade that had been averaging a billion dollars a year for the last decade suddenly increased during the years 1898 and 1899 until in 1900 it had attained the sum of a billion and a half. Every trade and industry felt the stimulus of "flush times," and

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an epoch of industrial exploitation and concentration of wealth set in that astonished the world. For twenty years there has been a marked tendency towards the formation of the so-called trusts or organizations of corporate interests for mutual benefit, but prior to 1898 only a few powerful corporations like the Standard Oil Company, the Sugar Combine and perhaps the brewing interests had succeeded in controlling the commodities in which they dealt. In the year 1899, however, fifty-one combinations, or onefifth of the total number in the United States in 1907, 1907, were organized. Transportation, mining, agriculture, every phase, indeed, of economic life began to take on an exceptional life and the nation became drunk with its prosperity, indulging in schemes and enterprises tremendous in scope and apparently impossible of achievement. Many of them, nevertheless, did succeed, but at the penalty destined always to be paid when values assume fictitious and speculative proportions.

In spite, however, of certain menacing elements in this "new finance," there was much that was solid in the economic situation. A combination of causes joined in producing this condition; the most important, however, were the war, the enormous deposits of gold discovered in the new gold fields in Alaska, South Africa, Australia, and other places; the Dingley Tariff Bill of 1897 and finally the

death-blow dealt the free-silver proposition by the enactment of the currency law of 1900.*

Although free silver was killed by the currency act of 1900, it was not yet buried. This melancholy deed was reserved for the presidential election of November 3. The platform of the Democratic party reaffirmed the platform of 1896, calling for the free and unlimited coinage of silver and gold at the rate of 16 to 1, and with William Jennings Bryan as their standard-bearer the Democrats took up again the ungrateful task of being the party of opposition. The outcome of the contest was evident from its beginning. The cry "imperialism fell upon the ears of a people who had tasted the fruits of victory, and they had no intention of inconsiderately throwing them away. The men who were destined to lead the dominant parties were likewise a foregone conclusion and both were virtually nominated by acclamation by their respective parties.

The Republican national convention was held in Philadelphia June 26, and the only issue apparently was the nomination of a candidate for the Vice-Presidency. Had Garrett A. Hobart lived to the end of his term, he would undoubtedly have been offered the honor again, but his death. November 21, 1899, had rendered this impossible. The only other man considered sufficiently popular in all por

*For discussion of this act see the Summary of American Finances in this volume.

"

tions of the country to prove an acceptable candidate was Theodore Roosevelt, then governor of New York. No one in the party had a record so remarkable, and so uniformly clear. As police commissioner of New York City, Assistant Secretary of Navy, Navy, colonel of the Rough Riders, and finally as governor of New York, his career had been marked by energy, originality, daring opposition to abuses, and above all by elements of success that rendered him a personality of especial interest not only to his own party but to the American people at large.

There were, however, certain facts that conspired against his election. These were: that he had made enemies by his activities during the war with Spain respecting abuses in the administration; that he had antagonized powerful interests and the party "machine" in his own State by his gubernatorial policy; and last that he was not acceptable to Senator Hanna and the President, who distrusted his progressive tendencies. The New York delegation headed by Senator Platt, in order to bury him in the Vice-Presidential chair, favored his nomination, as did Senator Quay, the "boss" of Pennsylania, because he would thereby strike a blow at Hanna. The Western contingency was solid for him because they liked the man. In such wise, supported by his enemies and his friends, was Theodore Roosevelt nominated to the second place of honor in the gift of