Telegram May 1st received. Finance Committee directs me to acknowledge the same and to state that it fully understands the situation with which you are confronted and your authority in the premises. We have only to renew our thanks for the prompt manner in which you met our needs without even waiting for the action of Congress, and we plainly see that no disbursement of funds can be made except through the regular Governmental channels. The only advice we previously received was that Congress had voted large sums of money for San Francisco, and the impression was abroad that it would be disbursed by local authorities.

The army organization under General Greely has given us inestimable aid and has co-operated in systematizing the work of relief. We are under great obligations to the army and desire to express our acknowledgment. There is perfect harmony of co- operation between the Governor, the Mayor, this committee, the army and the Red Cross

We will communicate with you from time to time as to the supplies most needed. We suggest the fund be credited with articles not needed, as certain quantities of tents and blankets, and that so far as practicable you expend funds in California to avoid the transportation cost and to circulate money where it is most needed for rehabilitation of business.

Cash actually on hand is less than $900,000, with drafts in process of collection of which we will report further. Will also advise you as to respective use of money at earliest possible moment. Meanwhile desire to say that we are entering a period of unprecedented privation. The assessable value of the city's property will be reduced by about two hundred million and the ability of the city government to maintain its institutions will be correspondingly decreased. Charitable institutions and hospitals depending on private contributions, paid patients and like sources of revenue are in absolute need, and those which have no endowment will be charges on us. In many institutions their buildings are destroyed. The poor, the old and young create a dependent class, which is augmented by the unemployed and certain classes of persons doing clerical work and engaged in domestic services. They will have to wait for the restoration of business houses and homes. The city with all its agencies has been destroyed and its manifold activities paralyzed. By limited rations to women and children as a measure of restoring business, the men will be required to seek work, of which there is much of a rough character in cleaning up the city and repairing it for reconstruction.

Apart from shelter, food and clothing, efforts will be made to restore the worthy to their employment. Dr. Devine [of the Red Cross] and the committee are so engaged in the important work of systematic relief that these questions, becoming more necessary of solution every day, have not as yet been carefully worked out. We will be pleased to keep you fully advised in order that you may wisely direct the expenditure of your fund in your keeping.

JAMES D. PHELAN, Chairman.