In the same document the Holy See asked for indemnity for “the acts of vandalism perpetrated by the insurgents in the destruction of churches and the appropriation of sacred vestments,” and also for the damage caused by the occupation by the American Government of “episcopal palaces, seminaries, convents, rectories, and other buildings intended for worship.” The Holy See further claimed “the right and the liberty of administering the pious trusts of ecclesiastical origin, or of Catholic foundation, which do not owe their existence to the civil power exclusively”; also “suitable provisions for religious teaching in the public schools, especially the primary.”
Governor Taft, in his reply to the Holy See, dated July 3, expressed regret at the suggested appointment of a new Apostolic Delegate, and sought to bring the Holy See to a definite contract. For the settlement of the friarsʼ land question he proposed “a tribunal of arbitration to be composed of five members—two to be appointed by His Holiness, two to be appointed by the Philippine Government, and one, the fifth, to be selected by an indifferent person, like the Governor-General of India”; the expenses to be defrayed wholly by the Philippine Government, and the tribunal to meet in the City of Manila not later than January 1, 1903. He further proposed that the lands should be valued in Mexican dollars, and be paid for in three cash instalments of three, six, and nine months after the report of the award and the delivery of the deeds. Furthermore, that “the payments ought to be made to the person designated by the Holy See to receive the same,” on the condition that “no money shall be paid for the lands to be purchased until proper conveyances for the land shall have been made to the Philippine Government.” Another condition was “that all the members of the four Religious Orders of Dominicans, Agustinians, Recoletos, and Franciscans now in the Islands shall withdraw therefrom after two years from the date of the first payment. An exception is made in favour of any member of those Orders who has been able to avoid hostility of the people and to carry on his duties as parish priest, in his parish outside Manila, from August, 1898, to date of this agreement,” because “it is certain that such a priest is popular with the people.” Governor Taft adds: “Nothing will calm the fears of the people.... except the definite knowledge ... that the Spanish friars of the four Orders are to leave the Islands at a definite time, and are not to return to the parishes.”
Cardinal Rampolla replied on July 9 to Governor Taftʼs communication of July 3, which covered his proposed contract and enclosed a counter project of convention, explaining as follows:—“The Holy See cannot accept the proposition of the Philippine Government to recall from the Archipelago in a fixed time all the religious of Spanish nationality ... and to prevent their return in the future. In effect, such a measure ... would be contrary to the positive rights guaranteed by the Treaty of Paris, and would put, consequently, the Holy See in conflict with Spain ... Such a measure would be, in the eyes of the Filipinos and of the entire Catholic world, the explicit confirmation of all the accusations brought against the said religious by their enemies, accusations of which ... the evident exaggeration cannot be disputed. If the American Government, respecting, as it does, individual rights, does not dare to interdict the Philippine soil to the Spanish religious ... how could the Pope do it? The Holy See, in accord with the diocesan authorities, will not permit the return of the Spanish religious ... in the parishes where their presence would provoke troubles.”
The Holy Seeʼs counter-proposal was cabled to the Secretary of War, who, in his reply dated July 14, which was tantamount to a rejection of it, remarked: “The lay Catholic population and the parish priests of native and non-Spanish blood are practically a unit in desiring both to expel the friars and to confiscate their lands ... This proposed confiscation, without compensation for the Church lands, was one of the fundamental policies of the Insurgent Government under Aguinaldo.” As an alternative, the Secretary of War accepted the proposal of the Holy See to send a new Apostolic Delegate, with necessary instructions to negotiate the affair amicably. Therefore, in transmitting this reply to Cardinal Rampolla on July 15, Gov. Taft closed the negotiations by stating: “I have the honour to request ... that the negotiations concerning the various subjects touched upon in the proposals and counter-proposals be continued in Manila between the Apostolic Delegate and myself, on the broad lines indicated in this correspondence.... I much regret that we cannot now reach a more precise agreement....”
The receipt of this last communication was courteously acknowledged by Cardinal M. Rampolla on July 18, 1902, and Gov. Taft then continued his journey to the Philippines.[10]
Monsignor Chapelleʼs mission had entirely failed to achieve its purpose, and he retired from the Islands on the appointment of the new Apostolic Delegate, Monsignor Giovanni Battista Guidi. Bora on April 27, 1852, this prelate was a man of great culture and a distinguished linguist, who had travelled considerably. From Rome he proceeded to Washington, and, with the United States exequatur, he entered Manila on November 18, 1902, and died there on June 26, 1904. During his mission the conditions of the friarsʼ land settlement were embodied in a contract dated December 28, 1903, whereby the United States undertook to pay, within six months from date, the sum of $7,227,000 gold in exchange for the title-deeds and conveyances of all the rural lands belonging to the three corporations possessing such—namely, the Dominicans, Agustinians, and Recoletos.[11] To cover this purchase, bonds were issued in America for $7,000,000 bearing 4 per cent, interest per annum; but, as the bonds obtained a premium on the money market, the total amount realized on the issue was $7,530,370. It remained, therefore, with the corporations themselves to deliver the title-deeds, but on personal inquiry of the Gov.-General in the month of July following I learnt that up to that date they had only partially fulfilled this condition. This, however, concerns them more than it does the American Government, which is ready to pay for value received. The approximate extent of the friarsʼ lands is as follows[12]:—
| Province. | Acres. | |
| Cavite. | 121,747 | Some held for centuries. None less than one generation. |
| La Laguna | 62,172 | |
| Rizal | 50,145 | |
| Bulacan | 39,441 | |
| Rizal (Mórong) | 4,940 | |
| Bataán | 1,000 | |
| Cebú | 16,413 | |
| Cagayán | 49,400 | Govʼt. grant to Austin friars, Sept. 25, 1880. |
| Mindoro | 58,455 | Govʼt. grant to Recoleto friars in 1894. |
| Total | 403,713 |
The purchase negotiations became all the more complicated because, from 1893 onwards, the Religious Orders had sold some of their lands to speculators who undertook to form companies to work them; however, the friars were the largest stockholders in these concerns.
As the lands become State property they will be offered to the tenants at the time being at cost price, payable in long terms with moderate interest. The annual compounded sum will be only a trifle more than the rent hitherto paid.[13]