The SECRETARY OF THE NAVY.
SIR: The destruction of the Spanish fleet at Manila, followed by the taking of the naval station at Cavite, the paroling of the garrisons, and the acquisition of the control of the bay, has rendered it necessary, in the further prosecution of the measures adopted by this Government for the purpose of bringing about an honorable and durable Peace with Spain, to send an army of occupation to the Philippines for the twofold purpose of completing the reduction of the Spanish power in that quarter and of giving to the islands order and security while in the possession of the United States. For the command of this expedition I have designated Major-General Wesley Merritt, and it now becomes my duty to give instructions as to the manner in which the movement shall be conducted.
I inclose herewith a copy of an order which I have this day addressed to the Secretary of War, setting forth the principles on which the occupation of the Philippines is to be carried out; You are instructed to confer with the Secretary of War in order that measures may be devised by which any conflict of authority between the officers of our army and navy in the Philippines may be avoided.
I have given instructions to the Secretary of the Treasury to examine the subject of the duties and taxes imposed by Spain in the Philippines and to report to me any recommendations which he may deem it proper to make in regard to the revenues of the islands. I have informed him, however, that the collection and disbursement of the duties and taxes collected there will, as a measure of military right derived from the law of nations, be made, under the orders of the Secretary of War and the Secretary of the Navy, by our military or naval commanders, as the case may be, at the ports or places which may be in possession of our forces.