[Defence expenses.] The reverse, however, happens with regard to the expenses of defence, as I have called them, the better to distinguish them from those purely relating to the interior police or administration.  Every sacrifice, most assuredly, ought to appear small, when the object is to preserve a country from falling into the hands of an enemy, and it ought not to excite surprise, if, during the course of the last fifteen years, several millions of dollars have been expended in the Philippines, in order to shield them from so dreadful a misfortune.  But the late memorable revolution in the Peninsula has given rise to so great a change in our political relations, and it is extremely improbable that these Islands will be again exposed to the same danger and alarm, that the government may now, without any apparent risk, dispense with a considerable part of the preparations of defence, at one time deemed indispensably necessary.  A colony that has no other strong place to garrison than its capital, and on the loyalty of whose inhabitants there are sufficient motives to rely, ought, in my opinion, to be considered as adequately provided against all ordinary occurrences in time of peace, with the 4,000 regulars, more or less, of all arms, the usual military establishment.  In case any suspicions should arise of an early rupture with the only power whose forces can inspire the governors of these Islands with any kind of apprehensions, means will not be wanting to an active and provident minister, of giving proper advice, so as to allow sufficient time for the assembling of the battalions of provincial militia and all the other necessary preparations of defence, before the enemy is in an attitude to effect an invasion of a country so far distant from his own possessions on the coasts of Malabar and Coromandel.  Consequently, by disbanding the corps of provincial infantry, cavalry and artillery, which continue uselessly to be kept on foot, an annual saving of from $220,000 to $250,000 would take place, an amount too great to be expended unless imperiously called for by the evident dread of a premeditated attack from an hostile quarter.

[Shipping reform.] The navy is another of the departments in which reforms may be introduced, of no small moment to the treasury.  Of course by the government merely dispensing with the policy of keeping in readiness two large ships to convey to Acapulco the cargos, for which the Manila merchants enjoy an annual licence, and leaving to the latter the full liberty of following up their speculations on their own account and risk, in vessels of their own, individually or with joint stock, a saving would result in favor of the crown equal to $140,000 to $150,000 per annum, and without preventing the receipt in Acapulco of the customary duties of $160,000 or $166,000 corresponding to the said licenses.  This will evidently be the case, because as long as the large disposal of funds of the charitable institutions are employed in maritime