inmate of a charitable institution who is maintained at the expense of the Government a dowry equal to the expense of maintenance for two years may be paid to her from this appropriation in the discretion of the Secretary of the Interior: And provided further, That the Bureau of Health is hereby authorized to continue the construction work at Culion without the intervention of the Bureau of Public Works or the Consulting Architect, existing law to the contrary notwithstanding: And provided further, That the expenditure of funds hereinbefore made available shall be under the direction and control of the Director of Health."

Section 1 (12), page 32, line 16, after the words "incidental expenses" insert the words “And provided further, That the Bureau of Quarantine Service is hereby authorized to continue the construction work at quarantine stations without the intervention of the Bureau of Public Works or the Consulting Architect, existing law to the contrary notwithstanding, from .funds made available for permanent improvements."

Section 1 (13), page 34, Weather Bureau, line 1, insert after the word "expenses" the words "Provided, That the Director, with the approval of the Secretary of the Interior, may reduce, suppress, or transfer any station maintained by the Bureau."

Section 1 (14), page 40, Bureau of Constabulary, insert between lines 14 and 15 the following: “Provided, That with the authority of the Governor-General, the Director may increase the number of Constabulary districts, the provisions of section five of Act Numbered One hundred and seventy-five to the contrary notwithstanding.”

The amendment recommended by the Committee of the Whole was adopted, and the bill ordered on file for third reading.

THIRD READING OF BILL.

Commission Bill No. 33. An Act providing that the assessment of and tax on real estate shall not include machinery as herein defined.

Commission Bill No. 33 was read the third time.

Commissioner Worcester moved the following amend

ment:

Section 4, page 2, line 8, strike out the words "land tax declarations" and insert in lieu thereof the words "land and property tax declarations."

The motion prevailed.

Commissioner Araneta moved to amend section 8 to read

as follows:

"SEC. 8. This Act shall take effect upon its passage.'

The motion prevailed.

Commissioner Araneta moved the following amendment:

Section 4, page 2, lines 9 and 10, strike out the words "of the land and improvements to which such machinery belongs or pertains.”

The motion prevailed.

The question then being upon its passage, the roll was called and the bill was passed, Commissioner Sumulong voting in the negative.

Commissioner Araneta moved to amend the title by striking out the words "real estate" and inserting in lieu thereof the words "real and personal property."

The motion prevailed, and the title as amended was read and approved.

EXPLANATIONS OF VOTES.

Commissioner WORCESTER: I voted "aye" after hesitation because I feel that companies like the Mindoro Company and property owners like the owners of the San Jose Estate might well be required to pay on the very valuable machinery which they have installed. But, if the passage of this bill will, as in my opinion seems probable, stimulate the use of machinery among comparatively poor people and so lead to increased agricultural production, I think it will be a good bill.

Commissioner ARANETA: In explanation of my vote in favor of this bill and of my vote against it at the last session. of the Legislature, I desire to state as follows:

I voted against the bill at that time on the ground that, since real property is taxed, there would seem to be no good reason why machinery forming a part of the real property should not also be subject to the same tax. After mature consideration of the matter, I think that the question should not be decided on that ground. There being a tax on real property and none on personal property, if machinery, which is a part of the real property, is not exempted an injustice would be done; some machinery would be subject to tax while other machinery would not; some industries using machinery fixed to the ground would pay a tax on such machinery, while other industries using

machinery equally and possibly more productive, but not so attached to the ground, would bear no share of the public burden. For example, a distillery would be required to pay the tax, while a cigarette factory or a hat factory would be exempt. Aside from this manifest injustice, it must be remembered that all machinery as defined by law is a factor in the production of merchandise which on being sold must pay the tax of one-third of one per cent which merchants pay on their sales.

In view of the foregoing, I think it only equitable and just that machinery attached to real property should be exempt from taxation.

Commissioner SUMULONG: The purpose of this bill is said to be, in the first place, to encourage the use of machinery in this country, but more especially among the agriculturists, in order to increase and improve production; in the second place it is alleged that since the present legislation does not tax machinery not fixed to the soil, it is an injustice to tax machinery attached to the soil.

This bill would, in my judgment, be less disputable if it exempted only agricultural machinery from taxation, though there would be objections to it even then, one of them being that the exemption would favor precisely those agriculturists who have capital and who, being able to produce better and more cheaply with the aid of machinery, are so much the more under the obligation to aid in bearing the public burdens. The small agriculturist will not be excused from paying taxes on his home or on the camarin built on his property, which he uses only to live in or to shelter his products, without their producing revenue or increasing production, while the landowner on a large scale will not pay for the machinery which aids him to double or perhaps even treble his production and his revenues. To do justice to all the agriculturists it must be said, however, that the machinery tax has been in force in the provinces for a long time without any complaints being received from said agriculturists. Only when it was attempted to apply the tax to machinery in Manila where, for reasons which this is not the opportunity to explain, it has not been applied,

the alleged advisability of abolishing the tax began to be discussed seriously. The persons or entities who have raised their voices against this tax are not agriculturists who have been suffering from the consequences of bad crops, rinderpest, depreciation of their products, and other calamities, but manufacturers, industrials, and large proprietors whose business has fortunately almost always been in a prosperous condition. The truth is, that if this bill is passed, the element most benefited will be the agriculturists on a large scale who have modern machinery wherewith to exploit their property, such as sugar centrals, and industrials owning distilleries, sawmills, mining machinery, dockyards, ricemills, etc.-that is, persons who cannot apply for this kind of assistance on the plea that their business is not prospering.

I acknowledge that from a general point of view it is not just to require machinery fixed to the soil to pay taxes while the same is not done with regard to machinery coming under the heading of personal property. But why not tax movable machinery also, instead of abolishing the tax on all classes of machinery? If this were reasonable and advisable, what could one say if the owners of real estate in general were to request exemption from taxation for their property on the plea that certain kinds of property, such as that set aside for religious, educational, or beneficent purposes, are exempt from taxation?

The argument that the machinery is always a factor in the production of merchandise which pays internalrevenue taxes when sold or conveyed, is not very convincing. There is much machinery, like that used on sugar estates or in dockyards, which does not produce anything on which internal-revenue taxes can be collected. One of the effects of this bill in the localities where machinery is used on a large scale would be to reduce the revenues of the municipalities concerned in proportion to the amount of machinery exempted from taxation, and it is certain that said municipalities would increase the rate of the land tax in order to fill the void caused by the abolition of the machinery tax, and thus the abolition of the machinery tax

would, in the last instance, involve the increase of the present tax burden on real estate. If one takes into consideration that the Government has almost always refused to abolish or reduce the land tax, even in times of crises and calamities, the injustice of the abolition of the tax on machinery used by persons or entities who generally do good business is shown up in a more evident and shocking light.

For this reason I again vote against the bill, as I did last year when the same measure was under discussion.

INTRODUCTION OF BILL.

Commissioner Branagan introduced the following bill: Commission Bill No. 34. An Act to afford relief to sufferers from the typhoon of October fifteenth and sixteenth, nineteen hundred and twelve.

Commission Bill No. 34 was read the first and second times and ordered on file for consideration in Committee of the Whole.

EXECUTIVE SESSION.

The Commission then proceeded to the consideration of executive business.

After the consideration of executive business, the Commission returned to regular session.

ADJOURNMENT.

Thereupon, at 11 o'clock and 50 minutes antemeridian, On motion by Commissioner Araneta,

The Commission adjourned to meet at 10 o'clock and 30 minutes antemeridian on Thursday, November 14, 1912. Attest:

GEO. C. SCHWEICKERT, Secretary.