-----------+------------+----------+----------+-------------+---------- As I have elsewhere remarked, the Philippines have a coast line longer than that of the continental United States. A very large percentage of the municipalities are situated on, or close to, the sea and the maintenance of adequate marine transportation is therefore a matter of vital importance to the peace and commercial prosperity of the archipelago. In the early days of American occupation conditions were most unsatisfactory. Most of the boats in the coastwise trade were antiquated, foul and had no decent facilities for transporting passengers. As the number of vessels was too small to handle the business of the country, ship-owners occupied a very independent position. The freight rates on such things as lumber and currency were practically prohibitive. It was a common thing for vessels to refuse to receive hemp, sugar and perishable products that had been brought to the beach for shipment, giving as an excuse the fact that they were employed in the private business of Messrs. Smith, Bell & Co., Warner, Barnes & Co., or whoever happened to own them, and could not transport freight for the public as the volume of their private business would not permit it. However, if the owners of the freight were willing to sell it to the ships' officers for a fraction of its value, they encountered no difficulty in transporting it! Furthermore, there existed the danger of Moro raids, the necessity for checking the operations of smugglers, and that of preventing the ingress of firearms, which in the hands of irresponsible persons might cause great damage and expense to the government and the public. In view of these facts it was decided to establish a fleet of twenty coast-guard vessels, which were not only to do police duty and to assist in the transportation of troops, but were to carry freight and passengers when opportunity offered. Fifteen such vessels were ordered from Messrs. Farnham, Boyd & Co., of Shanghai, and five from the Uraga Dock Company of Japan. The Japanese vessels proved unsatisfactory, and only two were accepted, making the total fleet seventeen. As the condition of public order improved the coast-guard boats became available to a constantly increasing extent for commercial service. Prior to July, 1906, there were practically no established steamship routes over which commercial vessels operated on regular schedules. With the exception of the service between Manila, Cebú and Iloílo, vessels traded here and there without regular ports of call or fixed dates of arrival or departure. The policy which guided their owners was one of privilege and monopoly, and by agreement between them competition was rigidly excluded. Trade was discouraged and the commercial development of the islands seriously retarded.