Those who prophesied a short life for the new republic and a reign of fraud and corruption were mistaken. During the first year economy became the rule in the administration of all branches of the public service, the government was self supporting, and a balance accumulated in the treasury. Moreover, the reforms inaugurated by Americans continued. Some 3,400 teachers were employed in the island and 120,000 pupils were in constant attendance upon the schools. In all parts of the island the effects of American rule were visible. Ten million dollars had been expended in sanitation reforms and the cleansing of Havana and the other cities. Industrial schools for orphan boys and girls were begun and hospitals and asylums for the sick, helpless, and insane were reestablished. By 1901 a railroad, with branch lines, was constructed between Santiago and Havana, thus giving the whole island excellent transportation facilities. Cuba could not gain prosperity at a bound. Whereas the island should, under natural conditions, have had $30,000,000 to $40,000,000 due her from foreign countries in 1902, she was $50,000,000 in debt. Her manufactures were insignificant. It was estimated that, in the year named, $80,000,000 of American money was invested in Cuba. The main enterprises were railroads, sugar and tobacco plantations, mines, and fruit farms. Free commercial intercourse with Spain no longer existing, Cuban sugar and tobacco producers sought markets in the United States, leading to the "reciprocity" conflict touched upon in Chapter XIII, Vol. V. During 1902 a reciprocity treaty was negotiated and promptly ratified in Cuba. Our Senate amended it and returned it to Cuba for reconsideration. Brought hither again, it was passed by our Senate in December, 1903. President Roosevelt signed it December 17, declaring its provisions effective in ten days. The Philippine Commission (Chapter XV, Vol. V), four Americans and three islanders, at first enacted laws by the authority of the President as Commander-in-Chief. After the Congressional Act of July 1, 1902, the formula ran: "By authority of the United States be it enacted by the Philippine Commission." The government was pronouncedly civil both in nature and in spirit, the natives being gradually placated, and only an occasional outbreak demanding the presence of troops. Schools were established, the English language and American ideas of government and business introduced. No promise of Philippine independence was given, yet the tenor of our whole policy toward the Filipinos, of official utterances and of public sentiment relating to them, was to the effect that we should never look upon any of the islands as a crown colony. [Illustration: Portrait.] Gov. William H. Taft [Secretary of War, 1905.]