flood-control projects, at an estimated cost of $397,000,000 has been made. These projects are regarded as eligible for inclusion in the relief program, and interested communities and other public agencies have been advised that the War Department is prepared to submit applications for undertaking them as a part of the relief program, provided each proposed project is sponsored by a duly established public agency prepared to furnish the necessary rights-of-way without cost to the United States, to accept responsibility for any damages to private property incident to construction, and to agree to maintain and operate the completed structures.

These flood-control projects, involving in large part the construction of levees, earthen dams, and the enlargement and straightening of channels, are particularly suitable for performance with relief labor, in that the work requires but comparatively small expenditures for materials and for skilled labor. Plans and specifications for most of these projects are in such state of advancement that they can be placed under way without delay to provide immediate employment. They have permanent economic value in the protection of communities and areas subject to recurring hazards from flood, and merit careful consideration in the relief program.

BEACH EROSION

The River and Harbor Act of July 3, 1930, authorized and directed the Chief of Engineers to cause investigations and studies to be made, in cooperation with appropriate agencies of various States, with a view to devising effective means for preventing the erosion of shores of coastal and lake waters by waves and currents, and provided for the appointment of a Beach Erosion Board charged with such investigations. This board has conducted a number of studies of specific projects, upon a cooperative basis with State agencies, to determine whether satisfactory protective works would be feasible. Unfortunately, the economic depression has prevented financial cooperation by local agencies and has materially curtailed the activities

of the board.

The recreational facilities afforded by our natural beaches are a heritage of the people, and their preservation is essential to our social welfare. The cooperation of the Federal Government has been limited to the planning by the Beach Erosion Board of protective works. Careful consideration should be given to the encouragement of beach protection, with substantial Federal financial and engineering support. Projects to which local agencies are prepared to contribute in large amounts should receive special attention for inclusion in the construction program being undertaken with funds from the Emergency Relief Appropriation. The Beach Erosion Board has also requested an allotment from this appropriation to provide for the accumulation of general data necessary for its future studies. This allotment, if granted, will result in a material increase in the technical knowledge necessary to adequate planning.

STREAM POLLUTION

The rapid growth of urban centers and densely settled areas throughout the United States has resulted in a serious menace to the domestic water supply and recreational facilities afforded by our

many streams. Domestic sewage and industrial wastes have caused contamination to the point that there exists today a serious shortage of safe water for domestic and recreational use and for the support of fish and waterfowl. Here at Washington, our capital city, the beautiful Potomac River is so contaminated by sewage that its extensive use for recreational purposes is dangerous to health. A conference of interested parties was held in my office in December of last year, to consider the creation of a Federal authority over stream pollution. As a result of this conference, an interdepartmental committee is now engaged in a study of stream pollution and purification problems. There are many difficulties involved in establishing legal control over stream pollution. Nevertheless, the importance of safeguarding our domestic water supply and of preserving our recreational facilities justifies the Federal Government in encouraging the formation of appropriate State and inter-State authorities, and in giving careful consideration to the enactment of legislation clearly defining its own responsibilities.

INLAND WATERWAYS

In my annual report for last year I outlined the comprehensive plan for improving our inland waterways, in order to bring to the interior of the continent the benefit of cheap water transportation. The program contemplates providing (1) a 9-foot channel on the Mississippi River for modern barge transportation from its mouth to St. Paul and Minneapolis; (2) an 8- to 9-foot channel on the Missouri River from its mouth to Sioux City, Iowa; (3) a 9-foot channel in the Illinois Waterway forming a part of the Lakes-to-the-Gulf Waterway; (4) the improvement of the Great Lakes-St. Lawrence Seaway to bring ocean-going ships to Great Lakes ports.

Construction of the Great Lakes-St. Lawrence Seaway is contingent upon ratification by the United States and Canada of a negotiated treaty authorizing the project. The United States Senate has declined to ratify the treaty, and Canada has not considered it, hence the St. Lawrence project has not been started. The other three items in the foregoing program are under way.

The project for the Mississippi River is now approximately 50 percent completed. In addition, an allotment of $25,000,000 from the Emergency Relief Appropriation provides for the construction of 5 additional locks and 4 additional dams, leaving 1 lock and 10 dams yet to be undertaken.

An allotment of $10,000,000 will practically complete the channel of the Missouri River to Omaha, Nebr. Additional funds could be utilized to advantage to insure completion to Sioux City by the The channel imtime the Fort Peck Reservoir is ready for use. provement and the reservoir are parts of the same navigation project, and obviously they should be finished simultaneously. This improvement, while primarily for navigation, will materially aid in flood control on the Missouri River, stabilizing its course and preventing the erosion of valuable, fertile bottom lands. The special types of regulating works which have been devised and developed are peculiarly adapted to the characteristics of the Missouri, and their magnitude and extent mark this improvement as one of the outstanding river engineering undertakings in the world.

Work on the Fort Peck Dam has progressed at a remarkable rate, and at the present time is 50 percent completed. The first funds for this project were received on October 31, 1933, and on the same day 341 men were put to work. Within less than 2 years a complete town has been built for the accommodation of 4,000 employees; 14 miles of railroad and a bridge across the Missouri River have been installed; a 183-mile power transmission line has been constructed; four 26-foot diversion tunnels, except linings, are practically completed; a steel sheet pile cut-off wall across the dam site has been driven; and more than 7,000,000 cubic yards of material have been placed into the body of the dam. The expenditures to August 1, 1935, have been over $33,000,000.

The decision of the Supreme Court limiting the diversion of water from the Great Lakes has made it essential that the existing locks and dams on the Illinois River be replaced by two new locks and dams to insure a dependable channel. I urgently recommend that funds be made available for this purpose at an early date, since otherwise the reduced diversion will materially hamper navigation on this connecting waterway between the Great Lakes and the Gulf of Mexico.

Work has been continued on the Lower Mississippi River, both for the maintenance of the navigable channel and on the flood-control program adopted by Congress under the act of May 15, 1928. This program is now well ahead of schedule and is within the estimates prepared by the Department. The Chief of Engineers has recently recommended to Congress a modification of the program, which will provide an even greater measure of safety for the population and property of the region, and will include control measures for the Yazoo and St. Francis River Basins, which have suffered so severely and so frequently from floods in the past.

Construction progress on the navigation and power project at Bonneville, Oreg., has been maintained at a most satisfactory rate, and indicates completion on, or ahead of, schedule.

THE PASSAMAQUODDY PROJECT

The War Department has been charged with the construction of the Passamaquoddy project, at Eastport, Maine, which represents the first major development involving the utilization of tidal power for the generation of hydroelectric energy. Engineering details of the design and construction of this project are of especial interest. Field parties have been assembled, plans and specifications are being prepared, and construction work will shortly be under way.

The Corps of Engineers, during the past year, has continued to make many investigations for the emergency agencies, and has loaned its officers to the National Emergency Council and to the Works Progress Administration to aid in the administration of their affairs. Studies for the improvement of the waterways of the country and their development in the interests of flood control, navigation, the development of hydroelectric power, and irrigation, have been continued so that the valuable data collected in the past may be kept up to date and wisely utilized.

BUREAU OF INSULAR AFFAIRS

The Philippine Islands.-One of the important features of the nonmilitary activities of the War Department is that of handling the affairs pertaining to the Philippine Islands. The event of greatest significance during the year was the meeting of the Philippine Constitutional Convention, which, pursuant to the provisions of section 1, Public, No. 127, Seventy-third Congress, approved March 24, 1934, convened at Manila on July 30, 1934, to draft a constitution for the government of the Commonwealth of the Philippine Islands. The deliberations of the convention continued until February 8, 1935. On March 18, 1935, the constitution as drafted by the convention was presented to the President of the United States for certification. On March 23, the President certified to the Governor General of the Philippine Islands that the constitution of the Philippines, as submitted, with ordinance appended thereto, conform substantially with the provisions of the Independence Act. The proposed constitution was then submitted to the Philippine people, for ratification, at an election held May 14, 1935. The total number of votes cast was 1,258,009, of which 1,213,046 votes were for ratification and 44,963 against ratification.

Upon its ratification by the people, the Governor General of the Philippine Islands issued a proclamation for the election of officers of the Commonwealth government as provided in the constitution, to be held on September 17, 1935. It is now contemplated that the new Commonwealth government will be inaugurated on November 15, 1935. Thereafter, the United States will be represented in the Islands by the United States High Commissioner to the Philippine Islands as provided in section 7 of the Independence Act.

Sakdal disturbances.-Conditions in the Philippines continue to be generally satisfactory. With the exception of the so-called "Sakdal uprising peace and order have generally prevailed throughout the islands. The Sakdal party is composed of a small minority group whose activities are directed against the existing government and particularly against the leaders of the political party in power. A serious disturbance of the peace occurred on May 2 and 3 at several points in the area immediately surrounding the city of Manila due to agitation of the Sakdal party leaders. Reports received indicate that the causes were political rather than economic. Disturbances occurred simultaneously at several points in the four provinces of Bulacan, Rizal, Cavite, and Laguna.

The beginning of the uprising was marked by an interruption of telephone and telegraph communications into the city of Manila and by assemblies of Sakdalistas in several towns in the provinces named. Local constabulary units were immediately sent to the various points and quickly restored order, in some cases without serious incidents, in others with regrettable loss of life and a number of wounded. Clashes in which casualties occurred took place at Santa Rosa, Laguna Province; at San Ildefonso, Bulacan Province; and at Cabuyao,

Laguna Province. The total casualties resulting from these clashes were: 4 members of the constabulary killed and 10 wounded; of the Sakdalistas 56 killed and 69 wounded, of which 52 were killed and 39 wounded at the town of Cabuyao.

Following the disturbances the Acting Governor General promptly directed an investigation into the situation. A number of the leaders have been arrested, against whom proceedings have been instituted. The entire situation was handled by the constabulary forces of the Philippine Government. No United States troops took any part whatever in the affair.

Health conditions were in general satisfactory. No epidemics of any importance have been reported.

A number of severe typhoons visited different parts of the islands, causing a loss of about 125 lives, rendering thousands of people homeless, and causing great damage to crops in the stricken localities. The most destructive one occurred on October 16, 1934, in central Luzon, centering around Manila, causing a loss of 50 lives, the destruction of thousands of lightly constructed houses, and immense damage to crops, especially coconut trees, with a total estimated damage of $3,500,000. On October 20, 1934, another storm visited southern Luzon taking 25 lives with property damage estimated at $1,500,000. In November heavy damages resulted from a typhoon in the Visayan Islands and Mindoro. On November 28 the Island of Cebu was visited by a typhoon with a loss of 22 lives. Early in April 1935 the province of Samar was visited by a storm which took a toll of 33 lives. The American Red Cross, always ready to assist in emergencies, promptly appropriated funds in the amount of $25,000 for assistance in the area stricken by the typhoon of October 16, 1934. In all cases prompt measures were taken by the Governor General and agencies of the insular government to extend relief in the storm-stricken areas.

Commerce and finance. The establishment of a sugar quota for the Philippine Islands by the Agricultural Adjustment Administration pursuant to the provisions of the Jones-Costigan Act, resulted in curtailment of sugar production in order to bring production in line with the requirements of the quota for the United States market, for home consumption, and a reasonable reserve. However, as there was an overquota surplus of several hundred thousand tons of Philippine sugar on hand in the United States at the beginning of 1935, the quota for the current year has been reduced to about one-half of the 1933 shipments. Accordingly, it is to be expected that there will be a considerable further falling off in insular revenues from this source during the current year. It is expected that the adjustment will be approximately completed by the end of 1935.

Reports from the Governor General indicate that the coconut industry has been adversely affected by the provisions of section 6022 of the Revenue Act of 1934. Due to the increased prices that were received for this product during a part of the year, it is not yet clear to what extent the tax has been detrimental to the interests of the islands. Up to June 30, 1935, there had been accumulated in the Treasury of the United States $16,013,673.36 from the processing tax on coconut oil, none of which had been remitted to the insular government.