The 1902 Philippine Organic Act was a constitution for the Insular Government, as the U.S. colonial administration was known. This was a form of territorial government that reported to the Bureau of Insular Affairs. The act provided for a Governor-General appointed by the U.S. president and an elected lower house, the Philippine Assembly. It also disestablished the Catholic Church as the state religion. The United States government, in an effort to resolve the status of the friars, negotiated with the Vatican. The church agreed to sell the friars' estates and promised gradual substitution of Filipino and other non-Spanish priests for the friars. It refused, however, to withdraw the religious orders from the islands immediately, partly to avoid offending Spain. In 1904 the administration bought for $7.2 million the major part of the friars' holdings, amounting to some , 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.