The instructions of President McKinley to the commission stipulated that it was their duty to make a thorough investigation into the titles of large tracts of land held or claimed by individuals or by religious orders. The commission conducted a series of public hearings into the matter beginning on July 31, 1900 and lasting until November. On November 30, 1900, a 604 page report submitted by the commission discussed the friar lands in detail, recommending that "... the insular government buy the large haciendas of the friars and sell them out as small holdings to the present tenants." In 1902, testifying in the U.S. before the House Committee on Insular Affairs, Taft repeated this recommendation, appraising the market value of the friar lands as between $2,500,000 to $7,000,000 in gold, and proposing that the insular government be allowed to float bonds for the purchase of the lands and use the proceeds from the sale of the lands to settle the bonds.
The Philippine Organic Act, enacted in July 1902, authorized the insular government to purchase the friar lands, empowering it to issue bonds for the purpose. Taft traveled to Rome in May 1902, meeting with Pope Leo XIII and proposing to buy the lands. The Pope promised to study the issue and expressed support for the American pacification program. On November 18, 1902, Papal representative Jean Baptiste Guidi arrived in Manila to negotiate the sale of the lands. Taft commissioned a survey to determine their market value, and a purchase price of $7,239,784.66 was paid in December 1903 by the insular government. The holdings amounted to some 166,000 hectares (410,000 acres), of which one-half was in the vicinity of Manila. The land was eventually resold to Filipinos, some of them tenants but the majority of them estate owners.
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