The two tables which follow show the face value of the tax receipts placed in the hands of the Spanish Bank for a series of years and the actual amounts collected. They have been carefully compiled by the author from official sources and are believed to be reliable:

Of course this difference does not absolutely represent the uncollected taxes, because the Government officials may have subsequently been able to secure collections from some of the delinquents. The delinquent column is also very greatly enlarged by reason of the fact that the Government authorities place in the hands of the Spanish Bank a large number of worthless receipts—that is, receipts in which the taxpayer is dead or the properties destroyed. This explanation, of course, exonerates the Spanish Bank, and shows that it collects the taxes in a businesslike way; but it does not change matters from a revenue point of view. That remains the same. It is probable, however, that under the new conditions it will be easy so to levy these taxes that they will yield annually from $4,000,000 to $5,000,000 in revenue. In thus proceeding the United States authorities will unquestionably abolish some of the most onerous.

The receipts from internal taxes are estimated as follows:

IN dealing with expenditures, the factors become more certain quantities than those present in the forecasting of possible revenue. The money collected from Cuba, whether it was $26,000,000 or more, has all gone, and nothing was found in the treasury when the United States forces took possession but numerous evidences of promises to pay, records of receipts given by the Government for goods not paid for, and debts of all kinds, including the salaries of a large number of the minor officials. The first and most important item of expenditure is, as has been said, for sovereignty expenses, and aggregates a sum exceeding $22,000,000. These expenses are subdivided as follows:

During the discussion of the Cuban debt by the Peace Commission in Paris last autumn, the Economiste Français contained an article by Paul Leroy Beaulieu, proposing an arrangement or compromise, with the bondholders, of part of the Cuban debt (about $140,000,000). The author of the article admitted that Cuba was not bound to pay the cost of the last insurrection (of 1895-98). As the Economiste Français represents the interests of the French public and of the great French banking houses that have largely invested in Cuban bonds of the issues of 1886 and 1890, the inference to be finally drawn from the above-mentioned article is rather in favour of Cuba. If Spain thus lent her guarantee, she did so in obedience to a necessity and as a business convenience, in order to prop up her colonial and commercial system. The Spanish nation believed that her domination in Cuba would be lasting, and that the remote danger of being called upon to pay the Cuban debt was more than compensated by the enormous amount of wealth which she drew every year from the colony.

The debt which was, so far as Cuba is concerned, wiped out by the American Commission in Paris must have amounted to over $500,000,000. From a variety of rather scrappy data, obtained by the author in Havana, a brief statement of the Cuban debt has been made up. The debts of the Cuban Treasury before the war can be reduced to five.

First: Spain’s debt to the United States.

Third: Annuity debt.

Fourth: Mortgage notes of 1886.

Fifth: Mortgage notes of 1890.

The first debt, $600,000. is an engagement made by Spain and signed in Madrid on the 17th of February, 1834, to pay the United States the amount specified; it was confirmed by the minister of the Spanish Treaty in a royal order, dated April 8, 1841, ordering the payment to be made by the Havana Treasury.

The second and third debts have been almost entirely converted into mortgage notes.

The fourth debt: by a royal decree of May 10, 1886, 1,240,000 notes of 500 pesetas each (about $124,000,000) were issued, redeemable by quarterly drawings and paying six per cent. per annum interest.

The fifth debt: by a royal decree of the 27th of September, 1890, 1,750,000 mortgage notes of 500 pesetas each (about $175,000,000), were issued, redeemable at par by quarterly drawings, and paying five percent. per annum interest.

Paul Leroy Beaulieu gives the bonded debt of Cuba as 2,032,000,000 pesetas, or $406,400,000. This evidently does not include the large floating debt included in the above estimate. So far as Cuba is concerned, this debt has been liquidated. It will, therefore, in the language of the French economist, be “absolutely necessary for Spain to meet the expenditure.” Why not? Spain lost the game, therefore she must pay the cost.

The second grand division of expenditure is the smallest, and represents the amount of money which was spent strictly for local affairs, and not in the defence of the sovereignty, in its possession of Cuba, and the payment of an unjust debt. One of the first items of expenditure under this latter head is the result of the concession last year by Spain of autonomy for the Island, and the round sum of $133,830 is paid under the head of “Colonial Legislature.” The second section is for the church, justice, and executive; also for the courts of justice, expenses for prisons and charitable institutions. It aggregates $1,612,859.44. The next most expensive department of the Government seems to be that of the Treasury, the salaries of the secretary, sub-secretaries, and other officers aggregating $218,725. This does not include general expenses, which make another item of this department, aggregating $33,500. Under the head of contingent expenses may be found the various provincial administrations of the Treasury; the cost of administration of custom-houses and revenue marine, amounting to $472,370, giving a total for the department of $708,978.51.

In recommending revenue laws for Cuba, the author was aided by the suggestions of Mr. Fran Figueras, who has given the subject intelligent consideration. To emphasise the importance of giving immediate attention to a careful division of the expenditures for the central government and the expenditures for local purposes (something the Spanish Government, in the whole history of its management of Cuba, has failed to do), the following is given from a statement made to the author by Mr. Figueras:

Another statement well worth attention in this connection is that of Mr. Philip Pelaez, a former official of the Spanish Government in Cuba, who said to the author when in Havana:

This sets forth substantially what has been done. The United States Government has made no violent fiscal changes in Cuba. Where the old laws and methods and customs could be fitted to the new order of things, they have been so fitted. The first and only radical change in the revenue system of Cuba is the speedy and absolute separation of local and general revenue. That which is local should be collected by local authorities and regarded as municipal revenue, to be expended for municipal purposes; while that which is general should be levied and collected by general authorities and expended for the general welfare of the Island. The general fund, after careful consultation with the governor of each province, should be apportioned geographically, and also into funds, such as the following:

a.—Maintenance of the general government, 20 per cent.

b.—Sanitary and other improvements, and loans to cities therefor, 10 per cent.

c.—Public schools and education, 10 per cent.

e.—Development of the Island by the building of railroads, properly constructed highways, and other means of communication, 25 per cent.

f.—The repayment of the cost to the United States of the temporary military occupation pending the establishment of the proposed stable and independent government, 15 per cent.

SPEAKING in round numbers, the commerce of Cuba during the last normal year aggregated about $100,000,000 of exports and a trifle over $60,000,000 of imports. From these figures it would seem that the balance of trade is about $40,000,000 in favour of Cuba. But this is more apparent than real. In one way and another Spain has annually turned away from the Island $40,000,000, which, had it been expended in Cuba every year, would have added immeasurably to the prosperity of the country. This money went to Spain in a variety of ways. Ten and a half millions of it were used in payment of a debt which did not justly belong to Cuba, and with which the people of the Island had been arbitrarily burdened without their consent. Large sums also went to Spain through the constantly changing Spanish civil and military officials, who regarded Cuba as their legitimate field for plunder.

It has been estimated elsewhere in this volume that the total commerce of Cuba, had the affairs of the Island been honestly and economically administered, would have reached from $200,000,000 to $250,000,000, so prolific is the country, and so valuable in the world’s markets are its two staple productions, sugar and tobacco.

In the same year the principal exports from the United States to Cuba, aggregating $15,448,981, were distributed as follows:

A casual inspection of the above table of imports to Cuba, covering only a portion of the articles taken from us by the Cubans, shows at once what the demands of the Island are for even the simplest necessities beyond bare existence. The million and a half people of the Island want our flour, our lard and pork, our oil, our barbed wire—our soldiers found samples of it strung around San Juan hill,—our manufactures of leather, our household furniture of all kinds, our locomotives and cars and steel rails, our saws and mechanics’ tools, our stationary engines and boilers, our lumber in its various shapes for framing and building, our locks and hinges and nails, our corn and beans and potatoes; our coal, our street cars and carriages, and any and every kind of the manifold things we produce in this country for the comfort and convenience and economy of mankind. In part exchange for these things, we get from Cuba sugar and tobacco, and control the markets of the world in these products; mahogany and all manner of beautiful hard woods; bananas and cocoanuts and fruits, pleasing to the palate and wholesome to the health; honey from the flowers; glycerine, no less sweet, from the fats of cattle; manganese and molasses; cigars and coffee; beeswax and birds, and the vast fields of tropical wealth and luxuries for the millions of our colder clime scarcely yet touched.

The golden dream of Columbus and his followers, when they beheld for the first time the purple peaks of the strange land rising out of the sea before them, are as poverty and nightmare in comparison with what is actual and real, for the more material age of the twentieth century.

Under the reciprocity of the McKinley Tariff law, Cuba and the United States were brought more closely together in commercial union than ever before in their history. No more competent testimony on this point can be adduced than the following extract from the report for 1892 of the British Consul-General at Havana: