Be it enacted by the Senate and House of Representatives of the Philippines in Legislature assembled and by the authority of the same:

SECTION 1. The Secretary of War is hereby authorized to issue in the name and behalf of the Government of the Philippine Islands bonds in the amount of two million one hundred and seventy-five thousand dollars, the proceeds of the sale of which shall be used by said Government for the construction of works and improvements in the port sale of Iloilo, Province of Iloilo.

The bonds so authorized to be issued shall bear such date and be in such form as the Secretary of War may determine and shall bear such rate of interest and run for such length of time as may be determined by said official. Both principal and interest shall be payable in gold coin of the an United States at the Treasury of the United States and the interest shall be payable at such periods as the Secretary of War may determine. Said bonds shall be issued at times and in amounts to be determined by the Governor-General upon the recommendation of the Secretary of Finance, and they may be coupon bonds or registered bonds, convertible, in the discretion of the Secretary of War, into either form, and in the case of the issue or transfer of any registered bonds the same shall be registered in the Treasury of the United States. These bonds may be issued in series bearing different dates.

Said bonds shall be exempt from taxation by the Government of the Philippine Islands or by any political or municipal subdivisions thereof, or by the Government of the United States, or by any State or territory of the United States, by any county, municipality, or other municipal subdivision of any State or territory of the United States, or by the District of Columbia, which fact shall be stated upon their face by virtue of section one of the Act of Congress approved February sixth, nineteen hundred and five, according to which Act, as well as in accordance with the Act of Congress approved on August twenty-ninth, nineteen hundred and sixteen, as amended, and in accordance with this Act, the said bonds are issued.

SEC. 2. The Secretary of War is further authorized to sell said bonds upon such terms as in his judgment are most favorable to the Government of the Philippine Islands, and he shall deposit the proceeds of the sale thereof with the authorized depository or depositories of the Government of the Philippine Islands in the United States, to the credit of the Treasurer of the Philippine Islands.

SEC. 3. The proceeds of the sale of the bonds issued by virtue of this Act are hereby appropriated for the construction of works and improvements in the port of Iloilo, Province of Iloilo, Philippine Islands, in accordance with the plans prepared by the Director of the Bureau of Public Works and approved by the Secretary of Commerce and Communications.

SEC. 4. A sinking fund is hereby created for the payment of the bonds issued under the provisions of this Act, in such a manner that the total amount thereof at each annual due date of the bond issue shall be equal to the total of an annuity of such a sum, for each million pesos of bonds outstanding, as with interest at the rate of three and one-half per centum per annum shall be sufficient to retire said bonds at maturity. Such sinking fund shall be under the custody of the Treasurer of the Philippine Islands, who shall invest the same, in such manner as the Secretary of Finance may approve in accordance with the provisions of Act Numbered Three thousand fourteen governing the investment of sinking funds, and shall charge all expenses incidental to such investment, to the said sinking fund.

SEC. 5. A standing annual appropriation is hereby made out of the general funds in the Insular Treasury, not otherwise appropriated, of such sums as may be necessary to provide for the sinking fund created in the next preceding section hereof, for the interest on the bonds issued by virtue of this Act and for the expenses incidental to the investment of the sinking fund. A further appropriation is hereby made out of any funds in the Insular Treasury, not otherwise appropriated, of a sufficient sum to cover the expenses of the issue and sale of the bonds issued by virtue of this Act.

SEC. 6. The Director of Public Works of the Philippine Islands shall have charge and exclusive control of all work to be done and improvements to be made under the provisions of this Act, which work shall be begun as soon as the Insular Treasurer shall certify that the funds herein provided for are available.

SEC. 7. This Act shall take effect on its approval.

Approved, December 7, 1927.