Report of provisional administration


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Report of provisional administration
Physical Description:
1 online resource (2 volumes) : plates, tables ;
Cuba -- Provisional Governor (1906-1909 : Magoon)


Subjects / Keywords:
1906 - 1909   ( fast )
Political science   ( fast )
Cuba   ( lcsh )
Politics and government -- Cuba -- 1906-1909   ( lcsh )
Cuba   ( bidex )
Política -- Cuba -- 1906-1909   ( bidex )
Gobierno -- Cuba -- 1906-1909   ( bidex )
Cuba   ( fast )
non-fiction   ( marcgt )


System Details:
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002.
General Note:
At head of title: Republic of Cuba.
General Note:
Includes departmental reports.
General Note:
Published also in Spanish.
Statement of Responsibility:
by Charles E. Magoon, provisional governor.

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oclc - 574282133
lcc - J163 .N45
ddc - 972.9107 C962rE
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Table of Contents
    Front Matter
        Front Matter
    Title Page
        Page i
        Page ii
    Table of Contents
        Page iii
        Page iv
    Report of provisional governor
        Page 1
        Page 2
    Genesis and legal status of present administration
        Page 3
        Page 4
        Page 5
    Political condition
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
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    Economical conditions
        Page 36
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    Legislative condition
        Page 68
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    Administrative condition
        Page 92
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    Appendix A. Report of department of state and justice
        Page 117
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    Appendix B. Report of department of government
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    Appendix C. Report of department of the treasury (hacienda)
        Page 287
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    Appendix D. Report of department of public instruction
        Page 311
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    Appendix E. Report of department of public works
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    Appendix F. Report of department of agriculture, commerce and industry
        Page 401
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    Appendix G. Report of department of sanitation
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    Appendix H. Report of commanding general, armed forces of Cuba
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    Appendix I. Report of board on state aid to municipalities
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Full Text

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33 AND 35 OBISPO STREET. ,> 1908



Genesis and legal status of present administration . . . . . 3

Political Condition: . . . . . . . . . . . . 6
,Cause of Revolution . . . . . . . . . . 6
Intervention; Provisional Administration established . . 7
Elections and Election frauds . . . . . . . 9,
Creation of Liberal Committee . . . . . . . 16
Rural Guard. 18
Suspension of Congress; exercise of Legislative power by
Provisional Governor . . 20
Enactment of Laws in order to make Constitution ef fcctive. 20
TheAdvisoTy Law Commission . . . . . . . 21
Postponement of Elections . . . . . . . . 22
Registration of Voters . . . . . . . . . I
Census . . . . . . . . . . . . . 26
Political parties; their pre-sent -organization . . . 28
Granting of Franchise to alien residents . . . . . 30
Termination of Provisional Administration . . . . 32

Economical Conditions: . . . . . . . . . . . 36
Agriculture, Commerce and Industries . . . . . 36
Commercial interests . . . . . . . . . . 41
Sanitation . . . . . . . . . . . . 45
Needed improvements in transportation facilities . . . 48
Road Construction; effect on public tranquility and trade. 49
Public necessities and improvements . . . . . . 52
Assistance to Municipalities . . . . . . . . 52
Trade and Commerce . . . . . . . . . . 53
Liquidation of private indebtedness by planters . . . 54
Appointment of Advisory Commission of Agriculturists. 60
Loan of $5,000,000 to banks . . . . . . . . 60
Strikes . . . . . . . . . . . . . 63
Strikebreakers . . . . . . . . . . . . 67

Legislative Condition: . . . . . . . . . . . . 68
Judicial branch of Government . . . . . . 68
The Judiciary . . . . . . . . . .
Legislative branch of Government . . . .. . : : : 69
Legislative needs . . . . . . . . . . .

Miscellaneous: . . . . . . . . . . . . . 80
Purchase of Church property . . . . . . . . so
Appointment of Claims Commission for adjustment of
damages caused by Revolution of 1906 . . . . 83

.7 .178847



,Cost of Revolution of 1906 . . . . . . . . 84
Army of Cuban Pacification; U. S. Troops . . . . 86
Collision between Municipal Police of Santiago and seamen
f rom U. S. S. I Tacoma . . . . . . . 88
Bandits . . . . . . . . . . . . 89
Masso Parra conspiracy . . . . . . . . I

Administrative Condition: . . . . . . . . . . 92
Executive Departments . . . . . . . . . 92
Department of State and Justice . . . . . . . 94
Department of Government . . . . . . . . . 96
Department of the Treasury . . . . . . . . 99
Department of Public Instruction . . . . . . . 101
Department of Public Works . . . . . . . . 103
Department of Agriculture, Industry and Commerce . . 107 Department of Sanitation . . . . . . . . . 108
Armed Forces . . . . . . . . . . . . 110

Conclusion .. . . . . . . . . . . . . . 114
Appendix "A ".-Report of Department of State and Justice; . 117
(a) Report of Adviser . . . . . 119
(b) Report of Acting Secretary of State. 141
(e) Report of Acting Secretary of Justice 181 Appendix "B".-Report of Department of Government . . . 237 Appendix C I '.-Report of Department of the Treasury (Hacienda) 287 Appendix D ".-Report of Department of Public Instruction . 311 Appendix E ".-Report of Department of Public Works . . . 357
Appendix 'IF".-Reportof Department of Agriculture, Commerce
and Industry . . . . 4.. . . . . . 401
Appendix G ".-Report of Department of n station . . . 453
Appendix H ".-Report of Commanding General, Armed Forces of
Cuba . . . . . . . . . . 489
Appendix "I".-Report of Board on State Aid to Municipalities. 553


Havana, Cuba, December 1, 1907.


I have the honor to transmit the annual reports of the acting Secretaries of the several Departments of the Government of Cuba presented by them to the Provisional Governor.
I take advantage of this opportunity to submit also a statement of the workings of the Provisional Administration of the Government of Cuba during the time I have occupied the position of Executive Head of that Governinent.
The events leading up to and requiring the establishment of the Provisional Administration are now well known historical incidents and were fully reported to the President of the United States by you during the time you were the Provisional Governor of Cuba, and, therefore, repetition is unnecessary. .
It seems appropriate, at this time, to reiterate the genesis and legal status of the existing administration of the Government of Cuba.
As a result of the War for Independence waged by the Cuban people, and the Spanish-American War, the sovereignty of Spain was withdrawn from the island and the Military Government was established. When the time arrived for the withdrawal of the Military Government and the establishment of the new Republic of Cuba, it became necessary to secure recognition from the Governments of Earth of the independent sovereignty of the new Republic and the consent of those Governments to its admission into the family of Nations with equality of right as to international relations. Thereupon it became advisable for the United States to guarantee the preservation of Cuban


independence, the maintenance of a government in the island adequate for the protection of -life, property and individual liberty and the discharge of the obligations, imposed by the Treaty of Paris.
The matter was presented to the Cuban Constitutional Convention, then in session, and provisions well adapted to accomplish the desired end were made a part of that instrument. This relation between Cuba and the United States is not a limitation upon its sovereignty and independence; it is the buttress by which sovereignty iand independence are protected and sustained; it is the guaranty by which the Cuban Republic is assured of equality of right and privilege in the Assembly of Nations.
After the Republic of Cuba was established and the Cuban Congress assembled, the provisions of the Constitution above referred to, and the other provisions of the Appendix were included in a Treaty with the United States which was duly celebrated by and with the concurrence of the Cuban Congress and the treaty making powers of the United States. Thereby the United States accepted the powers conferred by the Cuban Constitution and became bound to discharge the obligation. The Revolution of 1906 furnished an occasion for the officials of the Government of Cuba, charged with the responsibilities of place and power, to call upon the United States to perform the obligation and exercise the authority as above described. The President of the Republic of Cuba called upon the President of the United States for the performance of the Treaty obligation. The United Stated responded. President Estrada Palma, Vice-President M6ndez Capote and all the Cabinet resigned and the Congress dispersed. Manifestly the first thing to be done was to provide for the administration of the affairs of government and thereby maintain the existence of the Cuban Government until the vacancies occasioned by the resignations could be filled. The attempt was made to fill these vacancies by the action of the Cuban Congress, but a quorum could not be secured. The Government must be administered and therefore a provisional administration was -established. The Government was not changed, but continued in full force and vigor, exercising the same sovereignty and maintaining complete independence. There is in Cuba a Provisional Administration,


but the Government continues to be that of the independent sov. ereignty of the Republic of Cuba.
The character and scope of the Provisional Government were set forth in the proclamation of Secretary Taft, by which it was established:

"The failure of Congress to act on the irrevocable resignation of the President of the Republic of Cuba, or to dect a successor, leaves this country without a government at a time when great disorder prevails, and requires that pursuant to a request of President Palma, the necessary steps be taken in the name and by the authority of the President of the United States to restore order, protect life and property in the Island of Cuba and islands and keys adjacent thereto and for this purpose, to establisli therein a provisional government.
"The provisional government hereby established by direction and in the name of the President of the United States will be maintained only long enough to restore order and peace and public confidence, and then to hold such elections as may be necessary to determine those persons upon whom the permanent government of the Republic should be devolved.
"In so far as is consistent with the nature of a provisional government established under authority of the United States, this will be a Cuban government conforming, as far as may be, to the Constitution of Cuba. The Cuban flag will be hoisted as usual over the government buildings of the Island. All the executive departments and the provincial and municipal governments, including that of the City of Havana, will continue to be administered as under the Cuban Republic. The courts will continue to administer justice, and all laws not in their nature inapplicable by reason of the temporary and emergent character of the Government will be in force.
"President Roosevelt has been most anxious to bring about peace under the constitutional government of Cuba, and has made every endeavor to avoid the present step. Longer delay, however, would be dangerous.
"In view of the resignation of the Cabinet, until further notice the heads of all departments of the Central Government will report to me for instructions, including Major General Alejandro Rodriguez, in command of the Rural Guard and other regular Government forces, and General Carlos Roloff, Treasurer of Cuba.
"Until further notice, the Civil Governors and Alcaldes will also report to me for instructions.

4 6 1 ask all citizens and residents of Cuba to assist in the work of restoring order, tranquillity and public confidence.
"Havana, September 29, 1906.
(Signed) W- H. TAFT,
Secretary of War of the United States, Provisional Governor of Cuba".

The greater portion of the affairs with which the Provisional Administration was called upon to deal can be conveniently grouped as Political, Economical, Legislative, Miscellaneous, and Administrative.


During the administration of President Palma there were
CAUSEOF three political parties-the Moderate party (at
REVOLUTION. first called Republican party), the National party, and a small Independent Radical party. Each of these parties was composed, in large part, of groups with recognized leaders; that is to say, the personal following of a natural leader. For a little more than three years President Palma declined to affiliate with either of these parties and endeavored to distribute the patronage and governmental benefits equally, or rateably, between them. The contest between these parties for political supremacy became intense. There was an especial effort on the part of each one to control the Cuban Congress and this rivalry made it difficult to secure le(,iqlative action, even as to much needed legislation. The constitution of the Republic of Cuba requires that not imly on the assembling of Congress, but at the opening of the daily sessions there must be an attendance of at least two-thirds of the total membership. No measure for compelling the attendance of the members of Congress had been provided, and, therefore, it was easy to prevent a quorum. In securing a remedy for this evil, President Palina determined to affiliate with the Moderate party; hoping, with the aid of the powers of the Executive branch of the Government, to secure two-thirds or more of the Congress who could be relied upon to enact laws and measures which he deemed essential or advantageous. The Nationals then coalesced with a number of disaffected Moderates and formed the Liberal party which was also joined by the former Radicals. Several National leaders, how-


ever, refused to enter the combination, but maintained independent organizations, retaining the old name of "Nationals". Upon President Paqma's affiliation with the Moderate party, the policy was adopted of displacing Liberals from official positions-national, provincial and municipal-throughout the island, filling their places with members of the Moderate party. This embittered the opposition to the administration. When the time for elections approached, the Liberals made nominations for all of the offices and entered upon a vigorous campaign. The Independent Nationals favored the re-election of President Palma, and locally combined with the Moderates. All the powers of the Executive branch of the Government were utilized to secure the success of the Moderate party in the National, Provincial and Municipal elections, and measures were taken of such kind and character as to create a belief in the minds of a large number of the Electors that the laws had been violated, the constitution subverted, the rights of citizens invaded, and the character of the Government changed; in other words, that recourse had been had to unlawful exercise of power and perpetration of gross injustice to such an extent as to vitiate the elections. This belief led to the revolution and the investigation of the Peace Commission established that the belief was well founded.

The inability of the Administration to cope successfully with INTERVENTION: the revolution induced President Palma to
PROVISIONAL invoke the exercise by the United States ADMINISTRATION
ESTABLISHED. of the powers conferred upon that Government by Article 3 of the Appendix to the Cuban Constitution and accepted by the United States and confirmed by the Republic of Cuba by the treaty between the two Governments. In response to the call of the President of the Republic of Cuba and pursuant to said treaty obligation, the President of the United States created a Peace Commission, composed of Honorable Wm. H. Taft, Secretary of War, and Honorable Robert Bacon, Assistant Secretary of State, and sent them to Cuba to investigate the situation and attempt to restore peace and re-establish law and order. Upon the arrival of the Commission in Cuba the President of the Republic communicated to them his intention to resign his office. The members of the Cabinet tendered their resignations to President Palma and the same were


accepted by him. The President sent his resignation to the Cuban Congress, then assembled in Havana. The Vice-President also resigned. The Congress dissolved without filling either vacancy. Thereupon, the President of the United States, by virtue of the authority conferred by the Cuban Constitution and the existing treaty between Cuba and the United States, appointed Honorable Wm. H. Taft, Provisional Governor of the Republic, thereby insuring the maintenance of constitutional government, international relations, and a means of preserving -law and order.
The Peace Commission, during the course of its investigation, determined upon ways and means for settling the existing controversies between the several factions into which the people were divided. These terms and conditions were embodied in a letter to President Palma and were also submitted to the National Committees of each of the three important political organizations. President Palma and the Moderate party declined to accept the conditions; the Independent National party approved of the general plan proposed, but requested certain modifications; and the Liberal party accepted the proposal without modification.
The plan of the Peace Commission was as follows:

First. The resignation of the Vice-President, all the Senators and Representatives, Governors and Provincial Councilors, elected December, 1905.
Second. The laying down of the arms of the insurgents on the signing of this compromise and the presentation of thew resignations.
Third. The provision by law for a commission to consist of three lawyers whose names were to be selected by the Moderate party, three to be selected by the Liberal party, and one by the President of the United States, for the purpose of drafting laws.
Fourth. The holding of elections on January 1, 1907, under the provisions of the electoral law drafted by such commission.

On the 6th day of October, 1906, the President of the United States designated the writer as Provisional Governor of the Republic of Cuba and directed him to proceed to Cuba and assume the duties of said office. Pursuant thereto the writer was inducted into office on the 13th day of October, 1906, and issued the following proclamation:


"Acting upon the authority conferred upon him by the Appendix to the Constitution of Cuba, by the treaty between the United States and Cuba ratified July 1, 1904, and by the Act of Congress of the United States approved March 2, 1901, the President of the United States has appointed me Provisional Governor of Cuba, to succeed the Honorable Win. H. Taft, and I hereby assume that office.
"The policy declared and the assurances given by my predecessor, Secretary Taft, will be strictly adhered to and carried out.
As Provisional Governor, I shall exercise the powers and perform the duties contemplated and provided for by the 3rd Article of the Appendix to the Constitution of Cuba, for the preservation of Cuban independence and for the protection of life, property and individual liberty.
"As soon as it shall prove to be consistent with the attainment of these ends I shall seek to bring about the restoration of the ordinary agencies and methods of government under the other and general provisions of the Cuban Constitution.
"All provisions of the Constitution and laws, the application of which for the time being would be inconsistent with the exercise of the powers provided for by the 3rd Article of the Appendix, must be deemed to be in abeyance. All other provisions of the Constitution and laws continue in full force and effect".

Prior to the departure of Secretaries Taft and Bacon ELECTION rRAUDS. from Cuba a question arose as to the advisELECTIONS. ability of holding the elections at the time
set forth in the plan of settlement. Conferences were held with the leaders of the political organizations and many other prominent and influential citizens, and by common consent and agreement it was decided to postpone said -elections until the close of the season in which the tobacco and sugar cane crops are harvested. This postponement, by mutual agreement, insured the peace and tranquillity of the island during the harvest season and afforded the provisional administration opportunity to investigate the numerous charges made by the Liberals and the Revolutionary Committee as to the improper exercise of the powers of the Executive branch of the Palma administration, whereby that administration sought to perpetuate itself in place and power.
These charges, in general, were that the Municipal officials in many municipalities having a Liberal majority had been dis-


placed and substituted by Moderates; that members of the Liberal party were excluded from practically all the appointive offices of the Government, and that the Rural Guard had been converted into a political agency for accomplishing the purposes of the Moderate party.
The Peace Commission determined that the Liberal party was entitled to and should receive equitable representation in the public service of the National government. The Liberals desired and requested that a sufficient number of Moderates should be displaced and their places filled by Liberals to secure such representation immediately. The Peace Commission rejected this suggestion and, instead, adopted the policy of appointing Liberals to fill vacancies as they occurred.
The Peace Commission concluded its labors and Secretary Taft retired from the office of Provisional Governor at noon, October 13, 1906, and on the afternoon of the same day embarked for the United States.
The people of Havana forgot their political differences and taking thought of the fact that the horrors of civil war had been averted, all parties joined in a demonstration of gratitude and praise for the work that had been accomplished. The shore of the Bay was lined with thousands of cheering people, all available water craft was pressed into service to escort the ships to the mouth of the harbor, the forts exchanged salutes with the vessels, and amid cheers and aill possible display of good will the Peace Commission concluded its labors. The character and extent of their service is shown by the Resolution adopted by a mass meeting of the American residents of Havana, as follows:


"The Americans residents of Cuba, temporarily organize d for the purpose of making known to you their situation and necessities in connection with the recent disturbances, desire to express to you their high appreciation of the great services your wise and prudent measures have secured to them and to all the people of Cuba.
"The results you have accomplished are greater than could have reasonably been hoped for at the time of your arrival. Nearly thirty thousand armed men, moved by the most intense and bitter passions, were then arrayed against the armed forces of the government and a disastrous conflict was imminent, in which enormous loss of life and property would have been in-


evitable. It scarcely seemed possible that these angry elements of discord and strife could be brought into peaceful and orderly citizenship without bringing into active service the military power at your command to compel a cessation of the struggle for supremacy between the contending forces. But in less than one month the wise and sagacious methods you pursued and the skill and adroitness with which you approached the difficult task committed to your charge have brought peace and quiet to Cuba. Warlike conditions have vanished, with no immediate probability of their resumption. The armed forces have surrendered their arms and most of them are already in their fields and shops engaged in peaceful industry.
"Not the last satisfactory of the considerations involved is the fact that in the settlement of the turbulent conditions that prevailed you have caused but little irritation or resentment, and have secured from the Cuban people increased respect and regard for the United States and greater confidence and trust in the good will and wishes of the American people for the people of Cuba and their future welfare.
"We do not believe that so successful and speedy an achievement under conditions so difficult and dangerous has any parallel. And the thanks and gratitude of the people of Cuba, as well as of the great people you represent, are due to you for these inestimable services.
"Wishing you a safe return to the United States and the enjoyment of higher honors in the future, we are,
"Sincerely yours,

(Signed) : S. S. HARVEY,


The complete success of the Peace Commission has now become a matter of history, and in the interests of history I insert a letter written by President Palma to a personal friend on October 10, 1906. This letter was published recently in the newspapers of Havana, and is as follows:


"My esteemed friend:

"I dictate these lines impelled by a sentiment which elevates and makes happy, the sentiment of gratitude. This sentiment is strong within me when I read your letter of the 6th. In the unbalanced state of society in Cuba today and in the midst of the confused noise of a low mob, it is pleasant and strengthening to receive testimony of approval and sympathy from superior spirits who are capable of comprehending acts of abnegation and disinterest, inspired by the purest love of country. In complying with my public and private duties, especially on difficult occasions, I have never evaded the grave responsibilities imposed on me by circumstances. I have assumed them without vacillation with the courage and resolution of a clear conscience, foreign to any personal interest, and moved only by a sensible, upright and true patriotism. Let those who wilfully hide the reality of matters to themselves join in censurable chorus with the ignorant, boastfully clamoring of patriotism. I am satisfied with the conviction of having saved my beloved country from a horrible demoralization, of having saved it from anarchy and its necessary concomitants, ruin and pillage.
"From the first days of the insurrectionary movement I understood the situation and was able to appreciate it with a serene mind. I saw before me numerous masses tired of the order and legality to which they appeared to have submitted during the four years of the Republic, eager for licence and forays, follow like a mob the first adventurer who invited them to rise; I saw everywhere persons who sympathized with disorder and encouraged disturbance; I saw the press in the morning, afternoon and at all hours, assisting with unparalleled cynicism the secret conspiracy organized in behalf of the rebels; I suddenly found myself in the midst of a tremendous social disorganization, with thousands of insurgents in three provinces and the menace of rebellion in two others, without sufficient regular forces to undertake immediately an active campaign against the former and to beat and disorganize them; at the same time I constantly feared that they would carry to the -great sugar plantations of Santa Clara the measures of destruction already realized on railroad stations, locomotives, bridges, culverts etc.; I saw the customs revenues fall off by one-half and the other income of the State to 25 or 30 per cent, and that the millions of the Treasury were being spent in streams with uncertain result and to very doubtful advantage, a large part being used for keeping up hastily improvised militia, which, for that very reason, could not inspire sufficient confidence as to their reliability for undertaking the labor, the privations and the dangers of a constant persecution of adversaries, who were also Cubans and in a great number of cases, friends and comrades. In the mean time, like


a pre-conceived countersign, there resounded day after day in all quarters the threatening demand for "Peace at any cost", with the tendency of obliging the government to submit to whatever humiliation might be required, nor did any one stop to think how impossible the realization of the conditions was in practice, or consider the serious consequences of such a course in the future. To these reflections I might add "other unfavorable circumstances of great seriousness" as to which nevertheless I must remain silent because of their personal nature.
"The situation therefore, from the Cuban standpoint, presented the following dilemma: On the one hand the necessity of putting down the insurrection by force of arms; on the other that of making a compact with the insurgents.

It is easy to express the first course in a few words, but its complete realization was a difficult matter, as may be judged from what I have said above. At all events it would have required a period of several months, great effusion of blood, loss of life, destruction of property, and the consumption of the millions put aside for works of public utility, only to leave deeply rooted in the country the hatred caused by civil war, ready to break out again whenever a favorable opportunity arose. My humane sentiments of cbristian civilization, the attachment I had for the economies which had been accumulated in the Treasury by resisting the opposite tendency of improvident legislators, and the importance of protecting lives and property of Cubans and foreigners during the armed struggle, made me reject this course, which was further subject to having the Washington Government, already preparing forces in the south of the United States, believe at any moment that it was time to intervene.
"The coum of making a pact with the insurgents in arms was the worst which could be considered. Even supposing that the different rebel leaders and the directors and instigators of the movement arrived at an understanding among themselves and that they agreed with the Government upon the fundamental bases for terms of settlement, the secondary problems which wougd afterwards arise would be so many and so difficult to decide, in view of the weakened if not lost moral force of the legitimate authorities and in the absence of other authority that might settle differences, these problems would, I repeat, be so many and so difficult that they would cause the country to remain for many months in constant agitation with results as pernicious as war itself. From the moment the Government treated with the rebels it placed itself on an inclined plane of interminable concessions, initiating an era of successive insurrections, and putting the stability of future governments on a frail basis. I could never consent to be an accomplice in such evil in exchange for being permitted to continue to occupy the Presidential chair of the Republic; humiliated and its prestige taken away by the requirements of the insurrection, and in a situation


in which it would have been impossible for me to give my country the services which my high and disinterested aspirations desired.
"No, by no means, neither one course nor the other in the dilemma; neither answer war with war, nor degrade my authority as the -legitimate chief of State and my personal dignity by submitting to the exactions of armed men, lacking all social prestige, lacking principles and ideals, the instruments of a number of ambitious men without pity who were astute enough to remain aloof while they sent forth against the defenseless community those ignorant masses ready for pillage and disorder.
"When I saw the insurrection take serious proportions my soul was overcome with profound disenchantment, contemplating the patient and glorious work of f our years overthrown; and I irrevocably resolved to resign the Presidency, to abandon completely public life and to seek, in the bosom of my family, the certain refuge against so many deceptions. But before carrying out this intention, so grateful to my desires, it was absolutely necessary to make a last sacrifice on the altar of my country. It was not possible that I leave the Government in criminal hands; in the hands of those who had dealt a fatal blow to the credit of the Republic and the good name of the Cuban people. The conscience of a superior duty, one of those duties which cause the heart to bleed -and give rise to unpopularity and hate, imposed upon me as the only measure of salvation, the necessity of acquainting the Washington Government with the true situation of the country and with the lack of means of my Government to give protection to property, and to say that I considered that an occasion had arisen for the United States to make use of the right granted them by the Platt Amendment. I did so, consulting few people, since it was not a time to expose myself to contradiction in order to seek partners in this responsibility, but to assume the responsibility entirely, with the firmness of a legitimate conviction and thecourage which always accompanies acts inspired in the most sterling patriotism.
"Whether I did well or not, time will decide. Meanwhile my attitude is justified by my decree of September 17th, which virtually put an end to the war, exactly one month after it had begun, thus avoiding further bloodshed and loss of life; it is also justified by the fact that the insurgents are already disarmed and returning to their homes, tranquillity having been re-established guaranteed by the moral and material force of American authority. Ordinary occupations may be followed once more without fear and it is to be supposed that the next sugar and tobacco crops will begin to restore economic prosperity impaired by the crisis. As to politics I venture to predict nothing, neither as regards the parties nor as to the probable result of the intervention.


"I have always believed, since the time I took active part in the Ten-Years war that independence was not the final goal of all our noble and patriotic aspirations-the aim was to possess a stable Government capable of protecting lives and property and of guaranteeing to all residents of the country, natives and foreigners, the exercise of natural and civil rights, without permitting liberty ever to become pernicious license or violent agitation, to say nothing of armed disturbances of public order. I have never feared to admit, nor am I afraid to say aloud, that a political dependence which assures us the fecund boons of liberty is 'a hundred times preferable for our beloved Cuba to a sovereign and independent republic discredited and made miserable by the baneful action of periodic civil wars.


It required but slight investigation to see that the principal immediate cause of the uprising against President Palma's administration was the interference with the municipalities. One of the keenest and best qualified observes of Cuban affairs stated "that the Government could have done anything it saw fit to do in Havana, but the attempt to convert Liberal municipalities into Moderate ones was a fatal error". The Liberal Committee was called upon to state which municipalities had been illegally interfered with and submit proof. They submitted a list as follows; including therein several municipalities whose authorities had been changed during the uprising on account of sympathy with the insurgents:

Pinar del Rio Province: Guane, San Juan y Martinez, San Luis, Consolaci6n del Sur, Artemisa, Guanajay, Cabafias and Vdfiales.
Havana Province: Havana, Marianao, Giiines, Bataban6, Aguacate, Alquizar and Guanabacoa.
Santa Clara Province: Camajuani, Vueltas, Placetas, Yaguajay, Cadabazar, Trinidad, Cienfuegos, Rodas, Lajas, Ranchuelo, Sagua la Grande, Santo Domingo, Cruces, Palmira, Caibari~n, Rancho Veloz and Sancti Spiritus.

The Committee stated that there were other municipalities in the Republic in which a majority of the inhabitants were Liberals and in which the officials should be members of that party, but that the displacements had been accomplished in such manner as made it difficult, if not impossible, to present sufficient


proof to justify action on the part of the Provisional Administration, therefore, their names were withheld.
Investigation was made as to the municipalities whose names were presented. Each case was disposed of on its own merits. As to many of them the charges made by the Liberals were admitted; as to others, evidence was adduced. Liberal administrations were re-established, in whole or in part, in the following municipalities:

Pinar del Rio Province: Guane, San Juan y Martinez, Consolaci6n del Sur and Guanajay.
Havana Province: Giiines, Aguacate, Aiquizar and Guanabacoa.
Santa Clara Province: Camajuani, Vueltas, Placetas, Yaguajay, Calabazar, Trinidad, Cienfuegos, Rodas, Lajas, Ranchuelo, Cruces, Palmira, Rancho Veloz and Sancti Spiritus.

The action of the Provisional Administration in these cases was generally approved and universally accepted without protest or complaint.

The matter of appointing Liberals to positions in the NatioCREATION nal Government was one that bid fair to give
LIBERAL the Provisional Administration considerable
COMMITTEE- difficulty. Party ties set lightly on individuals in Cuba. There are few, if any, issues involving national policy or political principles. The individual voter gives allegiance to the party which, at the time, suits his inclination, and easily passes from one party to the other-a man may be be a Liberal one month and a Moderate the next, or vice versa, being governed by the personality of the candidate, or the local leaders supporting a candidate. The revolution of 1906 had many adherents who, at different times, belonged to the Moderate and Independent parties, but had from one cause or another joined the opposition to the Palma administration. It was a practical impossibility for the Provisional Governor to determine what persons were representative of the class which bad been excluded from office, or whose appointments would assist in restoring equitable representation. The Provisional Governor was a stranger to the country and people, and without the necessary knowledge. Ordinarily the requisite informa-


tion would be supplied by the members of the Cabinet, but Secretary Taft had ordered that the Chief Clerks of the Departments should be the acting Secretaries, and as they were either Moderates or independent, the Liberals protested against their being allowed to designate the Liberal representation. From this situation there developed the proposal that the Coinmittee which had dealt with Secretary Taft in his successful endeavor to secure the disbandment of the revolutionary forces and the restoration of tranquillity, should propose to the Provisional Governor the names of the persons to fill vacancies, as from time to time they occurred. This plan gave promise of securing the desired result, for the Committee represented not only the Liberal party, but also other elements which constituted the opposition and the excluded classes. The plan was adopted and proved satisfactory. The Committee, as originally constituted, was composed of the following gentlemen: Faustino Guerra, President; Eduardo Guzmnin, Vicepresident; Ernesto Asbert, Secretary; Alfredo Zayas, Jos6 Miguel G6mez, Juan Gualberto G6nez, Tomhts Recio, Demetrio Castillo Duany, Jos6 de J. Monteagudo, and Carlos Garcia V6lez.
.The creation of this Committee saved the Provisional Gov,ernment much time and trouble and secured appointees, who, with very few exceptions, proved efficient and generally acceptable to the public. The announcement was made from the first that officials would not be removed to make way for Liberals. This was reluctantly accepted by the Liberals; being acquiesced in as convenient, if not essential, to the Provisional Administration. In this, as in all other matters, the Liberal party has shown a purpose and desire to aid and assist the Provisional Administration in carrying out the plan adopted by the Peace Commission, and in securing an honest and efficient administration, and in other ways promoting the sueess of the endeavor in which the Provisional Administration is engaged. The Moderate and Independent parties, having practically dissolved, were unable, as a party, to assist the Provisional Administration, but, individually, many of the members called and offered their aid and assistance. When the Conservative party was organized, a Committee from that party called and offered their assistance, unconditionally, to the Provisional Government and have been of great help.


Investigation of the charge that the Rural Guard had been RURAL used as a political agency by the Government
GUARD. showed the charge to be true. Justice to the Rural Guard, however, requires that the statement be made that this service was contrary to the desire of a large majority of the officers and enlisted men. I am convinced that the service was distasteful and was. performed under protest and against their judgment and desire. There may have been a few who thought the ends justified the means, but by far the greater number considered it a disagreeable service which they were constrained to perform because it was imposed upon them by the obligation of military service. The purpose of the Rural Guard is hadicated by its name, and the field of their operation was intended to be outside of the municipal zones, or inhabited portions of the municipalities (tow-us). Within the municipal zone the Municipal police should have exercised the police powers. For various reasons-among them the small number of policemen, inefficiency resulting from political appointments, etc., but largely because of the political influence which they might exercise-the Rural Guard gradually supplanted the Municipal police within the Municipal zones. This unwarranted exercise of police authority by the Rural Guard in all localities throughout the island, brought the Guard into disfavor. The Rural Guard force was not sufficient to police the towns and rural districts and the rural districts were largely neglected. This added to the disfavor of the Guard and in no small measure afforded the opportunity for fomenting revolutionary sentiment and the assembling of insurgent bands, which, when joined together, constituted the revolutionary forces.
The operation of the Rural Guard against the insurgents was greatly hampered by the desire of the Government to afford adequate protection to the towns, especially the City of Havana, and, if possible, to avoid armed conflict with resulting loss of life and arousing of passion and animosities which battles engender. This resulted in a loss of prestige which was keenly felt by the Guard and, at that time, the esprit de corps was at low ebb and danger of further demoralization existed. In addition to using the Guard as a political agency, the Gov-


ernment had also made numerous promotions in the service as reward for political activity or because of political influence. On the whole the Guard was in a bad way.
The Rural Guard was organized under the Military Government of Cuba established by the United States at the -close of the Spanish-American War. The officer in charge of the organization at that time was Major Herbert J. Slocum, then in the 7th Cavalry, U. S. Army. Major Slocum was detailed for service with the Provisional Administration and signed to duty as Adviser to Major General Alejandro Rodriguez, commanding the Armed Forces of Cuba. He requested and received the assistance of Major Henry A. Barber, U. S. A. (retired), and Captains Powell Clayton, Jr., 11th Cavalry, George -C. Barnhardt, 15th Cavalry, Andrew J. Dougherty, 30th Infantry, and Edmund Wittenmyer, 5th Infantry. These officers entered upon the work of re-organizing and restoring the Guard to its original -efficiency.
The Rural Guard consists of three Regiments with headquarters at Havana, Matanzas and Santiago. Each Regiment is charged with policing two provinces. Captain Powell Clayton was detailed as Adviser to Colonel Emilio Avalos, commanding the Ist Regiment, which is charged with policing Havana and Pinar del Rio provinces, with headquarters at Havana; Captain Edmund Wittenmyer was detailed as Adviser to Colonel Manuel Antonio Martinez, commanding the 2nd Regiment, with headquarters at Matanzas, and charged with policing the provinces of Matanzas and Santa Clara; and Captain Andrew J. Dougherty was detailed as Adviser to Colonel Saturnino Lora, commanding the 3rd Regiment, charged with policing Camaguey and Oriente provinces, with headquarters at Santiago.
The officers of the United States Army detailed for duty with the Rural Guard are performing excellent service. All of them entered upon the discharge of their duties with enthusiasm and confidence of speedy success. The Rural Guard, from the Commanding General to the latest recruit, are eager for the necessary reforms and I record with much gratification that they have already a high degree of efficiency; that promotion is no longer secured by political activity or influence; that


they ref rain from exercising police power within the municipal zones excepting when called upon by proper authority; that they refrain from political activity and, with few exceptions, manifest no desire to engage therein; and that they have regained the confidence and good will of the general public.

The Peace Commission found that the Congressional elecSUSPENSION OF CON- tions of 1905 were so tainted with fraud GRESS.
EXERCISE OF LEGIs_ as to render them illegal. This elecLATIVE POWERS BY tion involved one-ha lf of the members
PROVISIONAL GOVERNOR. of the Senate and National Assembly,
and upon the elections being declared void no quorum existed. Thereupon Secretary Taft issued a decree suspending the meetings of the Congress and providing that the legislative powers should be exercised by the Provisional Governor. The exercise of legislative power by the Chief Executive of the Republic is in harmony with the established order prevailing in Cuba.

When the Constitution of Cuba was adopted, it was recogENACTMENT or LAWS nized that many of its provisions
CONSTITUTION EFrEC- were opposed to the existing laws;
TIVE. and many other provisions required
legislation to render them effective. To meet this situation and tide over the period between the establishment of the Republic and the enactment by Congress of the necessary legislation there were adopted certain "Transitory Rules" by which the old laws were continued in force, in so f ar as they did not conflict with the constitution, until amended or repealed by Congress and new legislation substituted. In construing these rules the Supreme Court has held that the Chief Executive may exercise the authority theretofore possessed and exercised by the Spanish Governors General. Under the Spanish regime the decree of the Governor General had the force and effect of legislative enactment and, under the authority of said Transitory Rules and Article 68 of the Constitution which empowers the President to issue regulations for the better enforcement of the laws, and decrees for the administration of the country, President Palma continued to issue Decrees having like force and effect.


The plan approved by the Peace Commission called ADVISORY LAW for the enactment of four special laws,

1. A Municipal 'law embodying the requirements of the Constitution.
2. An Electoral law containing sufficient provisions to secure a representation by the minority and providing for the conduct of elections under a nonpartisan bureau of elections having charge of police during the election and registration period, as well as the registration, counting of the votes, and declaring the result.
3. A law providing for the reorganization and increased in-dependence of the Judiciary.
4. A Civil Service -law.

A revision of the Provincial law was also deemed necessary. Although the laws of all countries on these subjects bear a general resemblance, it is necessary that said laws should conform to national characteristics, local conditions, public desires, and public exigencies. The study of these requires time and a knowledge of the conditions to be met.
A Commission similar to that contemplated by the plan of the Peace Commission was appointed December 24, 1906; it is known as the "Advisory Law Commission" and is composed of the following gentlemen: Colonel E. H. Crowder, U. S. A., President, Doctors Erasmo Regileiferos Boudet, Manuel Maria Coronado, Francisco Carrera Jhistiz, Mario Garcia Kohly, Rafael Montoro, Felipe Gonz~iez Sarrain, Miguel F. Viondi, Alfredo Zayas, Mr. Otto Schoenrich, Mr. Juan Gualberto G6mez, and Major Blanton C. Winship, Judge Advocate, U. S. Army.
This Commission entered upon its work at once. The field of investigation proved larger than was anticipated and more time has been consumed than orig-inally intended. The Commission has given the task great care and attention and have exhibited ability, care, thoughtfulness, and comprehension of subject matter. The time employed by them has been well spent. Their work is rapidly approaching completion. The Municipal Law and the Electoral Law are practically finished. Although not officially reported to the Provisional Governor, they have been examined by him -and he feels assured they are admirably adapted to the purposes for which they are intended.


The Judiciary law is also practically ready. These laws will be printed in pamphlet form and given extensive circulation in order that their provisions may be examined and considered by the inhabitants of Cuba prior to giving them force and effect. There is every reason to believe that the laws so formulated will become an important and potential part of the permanent legislation of the Republic.
Where all have done so well, it might seem inadvisable to single out one for special mention and commendation, but in this instance every other member of the Commission will be gratified by special mention and commendation of the work and ability of Colonel E. H. Crowder, U. S. A., President. It was especially advantageous that his services were available for the Provisional Administration. In addition to exceptional legal ability and training, he served as Legal Adviser to the Military Governor of the Philippine Islands and, while serving in that capacity, drafted many new laws and reformed many old ones which have become part of the permanent legislation of the Islands. This experience is of great value in the work of the Advisory Law Commission. The members of the Commission promptly recognized his ability and the value of his ju dgment; and the special study which he gave to theConstitution and existing laws of Cuba increased his efficiency and enabled him to reconcile existing differences of preconceived opinions, and, therefore, it is just to attribute to him a large share of the credit for the excellent results the Commission has attained.

The harvest of the sugar and tobacco crops in Cuba is POSTPONEMENT completed, usually, about the middle of
OF ELECTIONS. May. As that season approached in 1907 REGISTRATION
OF VOTERS. it became evident that the Advisory Law
Commission would not complete the draft of the laws upon which they were working within the time calculated. The Municipal law and the Electoral law are indispensable requisites to the elections. It is necessary, also, before holding these elections to have a new registration of voters, for it is commonly known and concededd that the existing registration lists are erroneous-lacking the names of many qualified electors, and containing the names of unqualified or non-existing persons.


The present registration law contemplates that the electors will register voluntarily, or that the representatives of a party will submit d list of the qualified electors belonging
to their party to the Registration Board, whereupon, either by virtue of actual knowledge of the Board, or upon evidence submitted by the political managers, the names are entered in the Registration books. This system, although in common use in Central and South American states seldom secures either a full or accurate registration. The ordinary voter, especially in rural districts, is seldom willing to take the trouble to present himself for registration and the lists presented by the partisan committees are usually inaccurate and incomplete. It is a common practice for all parties to submit a long -list of names and preserve or secure a copy of those accepted, and at elections call upon their partisans to vote under the names entered in the register. When it was known that the Provisional Administration contemplated a registration in accordance with the old law, objections were made on all sides and the Advisory Law Commission addressed a letter to the Provisional Governor urging that a census of the island be taken, and that from the census list a new registration -list be compiled. This plan met with universal commendation and was adopted. In April 1907, Secretary Taft again visited Cuba. Among other matters which received his attention at this visit was that of fixing the dates for the forthcoming elections. In conference with him, the National Committees of the several parties agreed that it was inexpedient to hold the elections at the time then contemplated. The results of these conferences with these Committees and other representative bodies, were embodied in a letter written by Secretary Taft to the Provisional Governor, as follows:

"After having conferred with the committees of the Liberal, Conservative and Republican parties and with the leading men of the community, including lawyers, bankers, business men, representatives of the Chamber of Commerce and others, and after a full discussion of the situation with you, General Barry, and Consul-General Steinhart, I have made the following statement and recommendation to the President:
"Having in view the circumstances making the intervention necessary, and the purpose of that intervention, the condition of Cuba and the attitude of its people under your admi-


nistration are very satisfactory. The question now arising is when shall the elections be held. The Advisory Law Commission appointed to draft an electoral law, a municipal law, a judiciary law and a civil service law, and composed of three Americans, four Liberals and four Conservatives, have declared to me that no f air election in Cuba can be hold until after the taking of a census for the purpose of enumerating with exactness and justice the residents of each town with a view to the verification of the registry upon which the election is to take place, and this view has been -enforced by the assurances of all the political parties. All parties, through their committees, have expressed the view that the wisest course is to hold a preliminary election to test the electoral law and to test the tranquillity of the country. The Liberal party urge that this election shall be for municipal officers and for provincial officers, while the Conservative party insists that it ought to be limited to municipal officers; but they agree in recommending the holding of a preliminary election. The Liberal party expresses the view that the census can be -completed in four months and that the provincial and municipal elections may therefore be held in September. The Conservative party does not express an opinion as to the time in which the census can be taken, but insist that the census should be taken with great care and the registration -lists founded on it should be subjected to severe and impartial judicial scrutiny as proposed by the Advisory Commission, and that the preliminary election sha,11 be held -a reasonable time after the -completion of the census. The Liberal party, hoping that the preliminary election may take place in September, recommends that the presidential and congressional elections be held the 31st of December, next, that the regular constitutional periods shall elapse thereafter before the assembling of the electoral colleges to name the Senators and the President, members for which are elected at the general election. By the constitution these electoral colleges do not convene until one hundred days after the general election. The Liberal party suggests that the new congress shall meet to receive the vote of the election for the President in time to permit his inauguration on the 20th of May, 1908, that date being the anniversary of the day upon which the first President of the Republic was inaugurated.
"The Conservative party insists that the preliminary election is in the nature of an experiment and that three months is not a suffice ent interval to determine whether the experiment has been a success, and recommends that not less than six months should elapse between the preliminary election and the presidential and congressionaI elections.
"First. It is hardly necessary to reiterate that the position of President Roosevelt is exactly what it was when the


first proclamation was issued establishing a Provisional Government under the Platt amendment in this island, to wit: That Cuba must be turned over to a Cuban government fairly elected as soon as the conditions and the tranquillity of the country will permit and will assure the stability of the government to be established.
Second. I do not think that four months is a sufficient time in which to take such a census as is necessary to assure a fair basis for holding, an election. It would be most unwise, therefore, to fix a definite date for the holding of a preliminary election. All that can be done, and all that ought to be done, is to declare that a census will be taken in as short a time as is consistent with making the census thorough, fair, and complete for electoral purposes, and to announce that the preliminary election will be held within such period thereafter as may afford a reasonable time for complying with all the requirements of the new electoral law preceding the elections.
Third. The municipal and provincial elections, which are in a sense local elections, should be held at the same time. I have already expressed the opinion that the election by which the present provincial authorities were put into power was attended with such irregularity that their resignations should be at the service of the Government, although present conditions justify the maintenance of the de facto status of these officials so long as they conduct themselves properly rather than an indiscriminate removal of them with the possible excitement and controversy likely to attend the selection of their successors. Still the question of the proper policy to pursue in respect to the present provincial officers is a matter which is in your hands for decision. But it is certain that as soon as the present condition as to provincial officers can be cured by an election that that election should be held, and, therefore, that both the municipal officers and the provincial officers should be selected at the preliminary election. It is true that at the provincial election, provincial councilmen are to be selected who by law will constitute one-third of the electoral college to vote f or Senators, but at the national elections there will be selected twothirds of that same college; and, therefore, the selection of the provincial council will have comparatively little bearing on the national election.
"Fourth. Three months may not be a sufficient time in which to test the question of the tranquillity of the country and the success of the experimental preliminary election, and therefore our declaration should not be more limited than that the national elections will be held within six months after the preliminary election.
Fifth. It is, of course, proper to comply with the consti-


tutional requirements as to the interval of one hundred days between the congressional and presidential elections, and the vote of the electoral colleges, the assembling of the Congress and the inauguration of the new President. The government of this island should then devolve on the newly elected President and Congress.
"Sixth. The carrying out of this plan is of course strictly dependent on the tranquillity of the country which must continue through the two elections and must give assurance of the stability of the new government, because without this, the United States will not be discharging the obligation devolving upon it by reason of the intervention.
"Seventh. It is in the interest of the business prosperity of the island that this policy, if it is to be adopted, be made public.
"I have submitted the substance of this letter to the President, and he approves the foregoing and directs me to make this communication to you".

The Provisional Administration has proceeded in accordance with the views expressed in the above letter.

It being determined to take a Census of the population of
CENSUS. Cuba, Mr. Victor H. Olmsted was appointed Director of the Census on April 29, 1907. On May 8th, following, a decree was issued making provision for the taking of the Census "for electoral purposes and such other purposes as the statistics are desired to serve".
In order to effect a proper organization, Cuba was divided into six districts, corresponding to the six provinces of the Island; and six Supervisors were appointed.
The work of sub-dividing the different provinces into districts most convenient for purposes of enumeration was carried forward as rapidly as possible and, at the same time, persons were selected for appointment as enumerators.
While this preparatory work was in progress, the necessary supplies for the taking of the Census were purchased, blanks were printed, instructions to Supervisors and enumerators formulated, and all the other preliminary work incident to censustaking accomplished.
The Supervisors were -called to Havana, and were personally instructed and drilled by the Director of the Census. They


were required, among other things, to perform the work of an ordinary enumerator; and the schedules prepared by them were criticised and recriticised until they became letter-perfect in the work.
The Supervisors, upon returning to their provinces, assembled the "Instructor Enumerators" (one from each municipality) and personally instructed them in the same manner that they themselves had been instructed by the Director of the Census. These Instructor Enumerators returned to their respective municipal terminus, and there instructed the ordinary Enumerators.
On September 6, 1907, a Proclamation was issued fixing Monday, September 30, 1907, as the day on which the enumeration should begin and requiring the same to be completed not later than November 14, 1907. During the interval between September 6th and 30th, 1907, the supplies to be used by the enumerators were distributed; and, on the day fixed by my Proclamation, the enumeration began simultaneously in every portion of the island. It was carried forward with very little interruption; such few obstacles as presented themselves were readily overcome; and the entire field work of the Census was completed within the required time.
1,800 enumerators were employed, and the results of their labors have been thoroughly and intelligently accomplished. It is probable that in thoroughness, clearness and general excellence, this Census will compare favorably with any Census ever taken. All the schedules from every portion of the Island should be in Havana by or before the 15th day of December. They could be brought here immediately -vvere not the Supervisors required to scrutinize them carefully for the purpose of correcting errors and supplying deficiencies.
The Director of the Census now has a considerable force of clerks at work (which will be increased as rapidly as circumstances require) engaged in the preparation of alphabetical lists of male citizens of Cuba, 21 years of age and over, who are entitled to the right of suffrage. A separate list will be prepared for each barrio in the island, of which there are about 1,000. The work of preparing these lists will be pushed forward with all possible speed, consistent with accuracy; after


whicli the work of tabulating the entire returns and the preparation of the full Census Report will be taken up.
Judging from the returns thus far received, the total population of Cuba is estimated to be about 2,000,000 an increase of about twenty-five per cent as compared with that shown by the Census of 1899.

The political parties in Cuba now present an alignment POLITICAL PARTIES; somewhat different than at the time
THEIR PRESENT the Provisional Administration was esORGANIZATION. tablished. The Moderate party has
ceased to exist under that name. There is a new party called the Conservative, which is largely composed of former members of the Moderate party, but is under the direction of new leaders. The Independent National party, or the portion of that party which followed the leadership of Emilio Nfifiez, Governor of Havana Province, and therefore known as "u iiiztas", have joined the Conservatives, but 'another independent party calling itself Republican, was started and has joined the Miguelista faction. The Liberal party is "split". This si~lit is caused by the rival candidacies of Senator Alfredo Zayas and Major General Jos6 Miguel G6mez for the nomination for the Presidency. Major General Jos6 Mignel G6mez was the candidate of the Liberal party in opposition to the reelection of President Palmna at the elections in 1905. He and his adherents take the position that those elections were fraudulent and should be considered as not held, and that he is the legal, as well as the logical, candidate of the party at the forthcoming elections.
Senator Zayas and his adherents refuse to admit the claims of the "Miguelistas" and insist that the Liberal party, finding itself -unable to overcome the fraudulent measures adopted by the Government to insure success at the Presidential elections of 1905, abandoned the field, dissolved the party organization, and terminated the candidacy of Major General Jos6 Miguel G6mez, who voluntarily surrendered his candidacy; that the revolution brought about a new condition of things and that many new men and measures came to the front; that Senator


Zayas, the Chairman of the National Committee of the Liberal party, also became Chairman of the Revolutionary Committee; that he conducted the negotiations with the Peace Commission on behalf of the Liberal party and the Revolutionary organization in such manner as to secure the accomplishment of practically all of the purposes of the revolution and the Liberal party; and that these services entitle him to the nomination.
The two wings of the Liberal party are commonly known a2 the "Miguelistas" and the "Zayistas". Both seem equally determined to adhere to their chosen leader. There have been several attempts to reconcile these factions, or to settle the disputed question by mutual agreement, or arbitration, but so far all have failed. Attempts have been made to select a third candidate upon whom both factions can unite, but that also has been unsuccessful. There has been no test of strength by which the size of the respective followings can be estimated. The forthcoming municipal elections, however, will probably afford opportunity for a fairly accurate estimate.
The Miguelistas sought to have the old National Committee oi the Liberal party issue a call for the election of the precinct, municipal, provincial and national assemblies of the party. A majority of this Committee favor the candidacy of Senator Zayas and declined to issue the call for the reason that it was too far in advance of the elections. Thereupon the Miguelistas proceeded to the selection of assemblies without said call, and completed their organization, even to the election of the delegates to the National Convention, in all of the provinces excepting Havana. The Zayistas are preserving the old organization by filling the vacancies in the Assemblies and Committees occasioned by the abandonment of positions by the followers -of Jos Miguel G6mez.
This split in the Liberal party has occasioned much trouble to the Provisional Administration, especially in the matter of distribution of patronage. Both sides claim to be the regular organization of the Liberal party and, as such, entitled to the advantages secured by the agreement with the Peace Commission. General G6mez insisted that the Committee recognized and relied upon in the selection of appointees did not accord


10m fair treatment, and that a majority of said Committe favored the candidacy of Senator Zayas and were making recommendations which resulted to the exclusive benefit of that candidacy. He and his supporters on the Committee withdrew from the same and notified the Provisional Governor that said Committee no longer represented that branch of the Liberal party which supported the G6mez; candidacy. The rank and file of both followings are Liberals and belong to the class which had beenexcluded from national patronage. It is imperative that the Provisional Administration should deal justly and impartially with both factions. Each side admits that the other is entitled to participate in the patronage, but each insist that the Provisonal Governor is favoring the other in the matter.

Politics in its broad relation to the maintenance and deGRJ&_NTING OF velopment of Government in Cuba is
ALIEN insr-DENTs. complicated by the fact that a large portion of the population is composed of resident aliens and that a large portion of the commerce, productive industry, and public utilities are owned and conducted by resident and nonresident foreigners. Under the Spanish regime the Spaniards in Cuba were a privileged class and it was practically impossible for a Cuban or fallen to establish and maintain a commercial institution. The wonderful richness of Cuba and its commercial possibilities are well known, and upon the withdrawal of Spanish sovereignty and the establishment of the Cuban Republic many foreigners and much foreign capital entered Cuba and engaged in commercial enterprises. The flood of Spanish immigration was checked for a short period, but soon revived and has continued unabated. There has also been a large immigration from other European countries, and the United States. It was, of course, desirable that the old Spanish residents of the Island, and the new-comers of all nationalities should become citizens of the Republic and identify themselves with, and participate in, the effort to establish and maintain the Government. The treaty of peace between the United States and Spain made provision whereby the Spanish residents of the island became citizens of the new Republic without ae-


tion on their part, but provided that, upon declaration of a desire so to do, they remained subjects of the King of Spain. The Constitution of the Government of Cuba provides an easy and simple means of naturalization; but the Republic of Cuba was in its experimental stage and few foreigners, newly arriving in Cuba or having property interest therein, were willing to surrender their citizenship and resulting right to protection. It follows from this that a large proportion of the business and property owning classes are not citizens of the Republic, and avoid the obligations of citizenship. There is a manifest neglect of even the obligations devolving upon a resident alien who receives for his person and property all the benefits of orderly government and the business opportunities existing in the island, without the responsibilities of citizenship; they, of course, pay tariff dues and such taxes as are imposed by local governments, but the greater obligations are avoided. This large class, however, is persistent in securing both general and special. benefits and exercising freely the right of criticism and complaint as to the Government, its agents, and its agencies. They apparently stop when they have performed this service to their own satisfaction and make little or no effort to influence or control political powers by which good government is to be secured.
The remedy for this situation, -at first, appeared to be to impose the obligations of citizenship upon resident aliens, who, by five years residence and a knowledge of the Spanish language have become sufficiently informed as to local and national affairs and public thought and feeling to be of substantial service in the proper exercise of political powers. The Advisory Law Commission, in drafting the Electoral law, spent much time and effort investigating and considering the proposition to bestow the right of suffrage, in municipal elections, upon resident aliens. The proposition, however, met with objection from both Cubans and foreigners. They feel that this would renew the animosities created during the long struggle of the Cubans for independence. Many protests were received from both Cubans and Spaniards. Both called attention to the fact that sufficient time had not elapsed to completely eradicate the bitterness, although, happily, rapid progress has been and is


being made in the right direction. The Cuban -protests called attention to the fact that a majority of the population of many towns in the island, including Havana, are aliens; in several of the towns the Spanish contingent constitutes a majority and in several more the combination of the Spanish and Chinese residents would constitute a majority. The protests from the Spaniards called attention to the injustice of compelling them to participate in the partisan strife resulting from election contests and expressed a grave fear that they would be injured by having the right of franchise forced upon them. The matter is still under consideration by the Advisory Law Commission and, therefore, is not further discussed.

The work of the census enumerators is completed and this TERMINATION OF naturally induces the general public to
ADMINISTRATION. consider the question as to when the elections are to be held. The electoral lists to be compiled from the enumeration lists will be completed by February Ist, 1908. Publicity and opportunity to correct errors must be given, and it will probably be February 15th before the lists are finally completed. The new Electoral Law, Municipal Law and Provinciad Law must be put in force before elections can be held, and the Advisory Commission has found that, owing to the lack of legislation at present, a Municipal Accounting Law and Municipal Tax Law will be required in connection with the Organic Municipal Law. The Electoral Law, the Municipal and the Municipal Accounting Law are about ready to be submitted to the Provisional Governorbut, while the drafts of the Municipal. Tax Law and the Provincial Law have been made, they have not yet been considered by the Commission. Prior to enactment, these laws will be printed and made public in order that the people may read and study them and offer such suggestions as they deem advisable. The decree promulgating these laws will probably be issued early in February 1908. It will then be necessary to organize the central Electoral Boards and the Provincial -and Municipal Boards required by the Electoral Law. This organization will probably not require more than forty-five days and therefore should be completed by March 15th, 1908. The Municipal Boards take charge of the electoral lists and verify, correct and add new registrations, but must


complete the registration twenty-nine days before the elections. It will also be necessary to provide voting booths, furniture, and other paraphernalia for the elections and to instruct the Election Boards as to their new duties. The call, for Provincial elections must be issued seventy-five days, and for Municipal elections sixty days. As the flrst elections are for both Provincial and Municipal officials, the call will be for seventy-five clays.
The elections are to be held under a new law, not yet in force, and as there are many provisions that will require explanation and instruction, I doubt if the periods of time mentioned can he permitted to overlap to any considerable extent; therefore, the Provincial and Municipal elections will presumably be held in April or May, 1908.
The agreement reached by all parties as to the holding of the elections provides as to the Congressional and Presidential elections as follows (See letter of Secretary Taft, dated April 10th, 1907):

"Fourth. Three months may not be sufficient time in which to test the question of the tranquillity of the country and the success of the experimental preliminary elections, and therefore our declaration should not be more limited than that the national elections will, be held within six months after the preliminary elections".

The tranquillity of the Island is absolute and complete and I believe it will not be seriously disturbed by the preliminary elections. Doubtless numerous election contests will developed which must be settled, for it is essential that the Municipal and Provincial officials be duly installed and become familiar with the duties of their offices prior to proceeding with the second elections. I do not think this will require six months, but, of course, cannot fix the limit without knowing the effect of the preliminary elections. The present prospect is these elections will pass off quietly and will cause sufficient amalgamation of the existing political groups to show the general outline and outlook of the national contest, and the proper thing to do, in fact the only thing that can be done, is to await the results of the Provincial and Municipal elections before taking the i3ext step.
The serious aspect of the present situation is the lack of


unanimity among the people and the want of a political issue of sufficient importance to command the efforts of a majority, of the electors for its promotion. The campaign involves no other issue than the personal popularity of the several candidates now announced, or being considered, and in its present stage consists of efforts to secure the support of local leaders; it is similar to the ante-convention campaigns in the United States. At this time there exists a general lack of confidence that any of the candidates have a following sufficiently large and united, or possesses sufficient prestige and public confidence to make his administration stable if he were elected and installed in office. The partisans of each candidate are certain their leader has such a following and prestige, but they are equally certain all the other candidates have not. As already stated, I hope and believe the preliminary elections will give the several parties more form and substance, and do away with this uncertainty. If they do not, the question of the time for holding the Presidential election will be further complicated instead of elucidated.
During the first few months of the Provisional Administration there was considerable discussion of the advisability of bringing about the annexation of Cuba to the United States, c.- the establishment of a protectorate by the United States, over the island. In spite of the oft-repeated assurances to the contrary; a large number of Cubans fear the United States desires and contemplates the annexation of the island. This feeling interferes with the attempts of the United States to assist Cuba and will continue to interfere with the carrying out of the obligations of the treaty by which the United States guarantees and protects the sovereignty of the Cuban Republic. This fear is of natural origin. The Cubans rightly consider their island the richest in possibilities and the most salubrious in climate of any portion of the Western Hemisphere, if not the world; they remember the struggle Spain made to retain it, and, as most men do with a possession they greatly prize, they cannot realize that others do not covet it; they know the strategical importance, from a military standpoint, of Cuba to the United States and were made accustomed by centuries of Spanish rule to seeing everything subordinated to military requirements; also, from their point of view, the trade and commerce of the United States apparently would be benefitted

by the annexation of the island. The Cubans have Qe utmost confidence in President Roosevelt and his administration; many of them realize that public sentiment and many of the great special interests of the United States are opposed to annexation now or hereafter; they know that the joint resolution adopted in April 1898 by the United States Congress that the people of the Island of Cuba are and of right ought to be free and independent", is a part of the permanent legislation of the United States and that recourse was had to the war powers of the nation to enforce recognition of this declaration; but nevertheless the fear I-arks, especially among the ignorant; this comes in large measure from the periodical agitation of the matter by residents of the island who desire annexation, aud the fears of the people are taken advantage of by numerous agitators and politicians seeking to promote their personal interests or prestige. If it were possible to entirely allay these fears and make all the people of Cuba realize how sincerely and steadfastly the people of the United States desire and intend that the sovereign independence of the Republic of Caba shall be preserved, and the Government of the Island administered by officials elected by citizens of the Republic, many difficulties of the Cuban situation would be eliminated, but the assurance of the United States has been repeated so often and as it is now crystalized into congressional legislation, treaty stipulation, and international pledge, there is nothing more possible.
Doubtless the desire to be brought under the jurisdiction and direction of the Government of the United States continues to prevail among the large alien contingent and a small number of Cubans who own property and fear a recurrence of disorder. An overwhelming majority of the Cubans are unwilling to surrender the independence and sovereignty to secure which, practically every Cuban of this generation joined in revolt against Spain. The universal prevalence of this sentiment among them gives me confidence that the Cubans will achieve good and stable government. During the years of warfare against Spain they willingly endured great hardships and cheerfully made great sacrifices. This action on their part was not spasmodic, but the hardships and sacrifices were long sustained. At the present period of their national development, it is necessary that they should make sacrifices and compromI


ises of individual opinions, preferences and desires respecting the personnel and conduct of affairs of Government, and I believe that when they finally ascertain and realize what these sacrifices are, and would accomplish, they will be made in the sarne spirit and with the same completeness that makes possible the maintenance of stable government in all well regulatcd Republics.
The Provisional Administration is going ahead as rapidly as circumstances and conditions permit with the execution of the plan set forth in Secretary Taft's letter. Up to this time peace and tranquillity have prevailed in the island and substantial l progress has been made in gratifying the desire of the Cuban people to make stable the Republic and secure for its people good laws, good administration, public improvements, promotion of commerce and development of the island together with the other benefits of public peace and domestic tranquillity.


Tested by tangible evidence the Economic situation is AGRICULTURE, excellent.
COMMERCE AND In October 1906, it was generally fearINDUSTRIES. ed that the revolution had destroyed the
financial credit of the island; the long continued drouth was believed to have greatly injured the cane, tobacco, fruit and vegetable crops; a cyclone devastated the island during the month and was believed to have completed the total loss of the cane and tobacco crops. Every one expected the receipts of the Customs Houses would diminish and a general fear prevailed that the revenues of the Government would not be sufficient to meet the obligations and current expenses. The outcome was quite the reverse of public expectation. The island produced more sugar than ever before in its history. The tobacco crop was short, but superior in quality and commanded the highest price in the history of the industry in Cuba. The fruit and vegetable crops were large and showed a gratifying increase in acreage over previous years, and, although the output was reduced by the drouth, the prices secured were high and results gratifying to the producers. The customs receipts were in


excess of any preceding year and the condition of the public Treasury continued to be excellent.
The rain fall in Cuba during the past twelve months has been considerably less than usual. The rain fall during what is known as the "Rainy Season" was little in excess of the amount of rain that usually falls during the "Dry Season", and during this year's dry season there was little if any rain. This has impeded the growth of the cane and there will be a corresponding reduction in the amount of sugar produced from a given quantity of land, but there has been an increase in acreage and the prevalent opinion is that the island will produce ,-t least 1,150,000 tons of sugar-rains between this time and the completion of the harvest will increase the output. Some portions of the island had rain in sufficient quantity and frequency to secure ordinary growth of cane, while in other portions the cane is small. The cane has grown throughout the season, but not as rapidly as usual and is about thirty days behind its usual development. If the cane cutting is postpolied for an equal length of time the yield will be correspondingly increased; there is a good deal of cane that was left uncut last year and this is well matured and will be cut first, but this will not take more than two weeks. The difficulty about delaying the cutting is that all the cane will not be harvested by the time the rainy season sets in next spring; when the rains come it is difficult and expensive to work in the fields and haul the cane to the railroads or the mills. Sugar experts predict that the price of sugar will be high, and if the prediction is realized, the sugar output of Cuba will bring at least the average financial return.
The tobacco crop is now being planted and, therefore, no estimate can be made as to the yield, but there will be -a large increase of acreage and there is nothing to indicate a reduction of the present high prices.
There is also a substantial increase in acreage devoted to the raising of bananas, pineapples, oranges and other fruits, and the raising of vegetables to supply the demand for fresh vegetables during the winter season in the United States.
The culture of coffee also shows gratifying increase and new groves are being planted in those portions of the island where this important food product is successfully grown.
The iron industry is showing remarkable advancement.


New deposits of ore have been discovered and are being developed. Extensive plants which require the construction of railways, mills, piers, and dredging of channels axe being installed.
The manufactures of the island, especially those which consume the natural products are in prosperous condition and are rapidly expanding in capacity and output.
Foreign and domestic commerce and trade for the past year show a gratifying increase over preceding years.
The increase in Customs receipts at Havana from December 1st, 1906, to October 31st, 1907, over the same months in 1905-6, amounts to $1,381,684.15.
The receipts of the Treasury from other sources from December 1st, 1906, to October 31st, 1907, as compared with the receipts for the same months in 1905-6, show an increase of $48,158.41.
The receipts of the Post Offic e Department from December 1st; 1906, to Octobe)r 31st, 1907, show an increase of $58,290.02 as compared with the receipts for the same months in the year 1905-6.
The condition of the National Treasury on October 31st, 1907, is shown by the following statement:

On hand and in Treasury, Sept. 29, 1906
(date of establishment of Provisional
Government) . . . . . . . $ 1.3,625,539.65
Received during period from Sept. 29,
1906, to Oct. 31, 1907:
Customs receipts . . $ 27,747,170.30 Consular receipts . . 420,055.86
Post Office receipts. 870,346.05
State Taxes. i * . 995,632.07
Income from State property- - 386,093.02
Internal Revenues . . . 4,451,607.50
From all other sources. . . 6,371,119.71 $ 41,242,024.51
Total . $ 54,867,564.16

Expenditures since Sept. 29, 1906:
Congress . . . . $ 284,956.58
Executive Office (salaries, materials, etc.) . . 87,500.54
Dept. of Treasury . . . 5,247,973.36
Carried forward. $ 5,620,430.48 $ 54,867,564.16


Brought forward. $ 5,620,430.48 $ 54,867,564.16
Dept. State and Justice (including
Judiciary). . ja n, ii., 9 1,964,178.71
Dept. of Gover me t '].di.
Armed Forces, Census and Sanitation). 12,910,986.45
Dept. of Public Instruction. 4,523,339.26
Dept. of Public Works. . 9,450,702.85
Dept. of Agriculture . . 291,043.53
Interest on Loan and cost of collection of Internal Revenues. 2,711,053.56
Special Deposit . . . 743,007.00
Payments to Army (2d 50%). 1,398,488.76 $ 39,613,230.60
Balance in Treasury, Oct. 31, 1907. $ 15,254,333.56
Surplus f rom:
Revenues . . . . . . . $ 93525,489.13
Taxes . . . . . . . 2,568,987.12
Special Fund . . . . . . . 311,916.44
Ist Army Loan . . . . . . 6323431.00
2nd Army Loan . . . . . . 2,2153509.87
Total . . . . . . $ 15,254,333.56

This amount is not all available, or "free cash". There are included in said funds unexpended balances of permanent appropriations by the Cuban Congress for public works $5,489,516.42; -and unexpended balances of permanent appropriations for public improvements made by the Provisional Administration amounting to $2,153,909.87. These two foregoing sums cannot be charged, in full, against the cash balances in the Treasury, for the unexpended portion of appropriations for works now in progress are, either in whole or in part, in the hands of Disbursing Officers and -deposited to their credit in the Banco National or Royal Bank of Canada, and do not appear in the cash account of the Treasury. The total amount on deposit in the Banco Nacional to the order of the Disbursing Officers is $3,476,955.96, and in the Royal Bank of Canada $72,234.54, making a total of $3,549,190.50. What amount of these deposits consists of unexpended balances of appropriations made by special laws and what amount is chargeable to the current expenses provided for in the Bubget cannot be stated until the end of the fiscal year, but it is safe to assume that at least $1,000,000 consists of unexpended appropriations for public works. The funds in the Treasury also include $1,000,000 of National bonds (Speyer) purchased by the Govornment in 1905, and unavailable for reissue or appropriation;


also $2,847,940.87 unexpended balances first and second Army Pay Loans unavailable for appropriation. It follows from the foregoing that the amount of cash in the National Treasury available for appropriation is $4,551,310.63.
The annual budget for the fiscal year ending June 30, 1908, appropriates the sum of $23,309,539.87 from any money in the Treasury not otherwise appropriated for specific purposes, as follows:

For the Executive Power Provisional Government $ 105,980.00
For the Department of State and Justice. 680,265.57
For the Department of Government . 8,973,002.65
For the Department of the Treasury . 3,440,954.65
For the Department of Public Instruction. 47195,868.00
For the Department of Public Works . 4,445,226.00
For the Department of Agriculture, Industry and Commerce . . . . 274,988.00
For the Judicial Power . . . . . 1,193,255.00

Total . . . . . $ 23,309,539.87

In addition to funds appropriated by Cub-an Congress.

The application of the foregoing appropriations must be adjusted in accordance with allotments detailed in statements attached to and made -a part of the Decree establishing the budget.
The estimated receipts to cover the appropriations hereby provided are as follows:

Customs less amount for covering the expenses of the Legislative Power in the
Fixed Budget . . . . . . $ 23,046,000.00
Consular Revenues . . . . . . 350,000.00
Communications . . . . . . . 743,000.00
Internal Revenue . . . . . . . 831,000.00
State Properties and Rigths . . . . 234,000.00 Miscellaneous Revenues . . . . . 262,325.00

Total . . . . . $ 25,466,325.00

The receipts of the National Treasury for the past five months have been in excess of the estimate upon which the


budget was based; to wit, $25,466,325.00, and therefore the appropriations made in the budget will be provided for by the ordinary revenues, leaving the available cash now on hand and excess of future revenues over budget appropriations to be applied to extraordinary expenditures-elections, unadjusted claims for damages by insurgent forces, new public improvements, etc.
Taking into consideration that this showing is for a year immediately following a revolution and cyclone, and includes a period of panic and world-wide disturbance of business and finance, of strikes and lockouts throughout the Island that paralyzed for months the cigar-making and building industries, and otherwise interfered with commerce and industrial pursuits, and with low prices for sugar prevailing, some idea is obtained of the wonderful richness and recuperative powers of the Island, and impels consideration of the question,-What would be the results of a few years' progress under conditions of tranquillity, united effort and proper administration?

The Commercial interests of Cuba are in excellent condition. CO RCIAL The foreign and domestic trade is constantly
INTERESTS. increasing, and this has been true each year since the Spanish-American war.
The commercial classes are conservative but are quick to see and take advantage of actual and genuine opportunities for trade expansion and increased profits. The development of the commerce has been so well grounded and safely conducted that no disastrous results were occasioned in commercial circles from the ebb tide of expansion induced by the 1arge increase of the currency of the Island by the bond issues and practically free distribution of money and the practically unlimited credit for the years from 1902 to 1906.
This gratifying condition results, principally, from the marvelous productiveness of the Island, the constantly increasing population, and the business sagacity and acumen of the merchants, but no small share of the credit is due to the Chamber of Commerce, Industries and Navigation of Cuba. This organization includes representatives of all the mercantile interests of the Island. Its officers are capable, farsighted business men who keep in touch with all lines of business in all parts of


the Republic and render prompt and efficient assistance whenever needed. By means of this organization the co-operation and co-ordination of all branches and kinds of commercial life is secured and the individual and mutual interests are promoted. A few months after the Provisional Administration was established, representatives of the Chamber if Commerce presented a large number of complaints which had arisen in the administration of the affairs of the Customs Houses. Practically all of them could be grouped as complaints against (1) erroneous classification of imports under existing regulations; (2) changes in classification of goods after entry and payment of the amount of duties demanded; (3) improper interpretation and application of the regulations governing coastwise trade and navigation; and (4) arbitrary levy of fines and penalties. Especial stress was laid upon the hardship and injustice of changing the classification of goods after they had passed through the Customs House and been in the possession of the importers for weeks and months and, in many instances, sold in the regular course of trade at prices fixed with reference to the duties originally imposed. The opportunity for this practice was afforded by the fact that the -accounts of the Customs Houses with the 'Treasury were not audited for from eight to twelve months after the transactions occurred; if during this period a change in classification was made, the Auditor required the amount called for by the new classification and the importer was required to make good the difference. Each of the complaints presented were investigated and all of them finally settled to the mutual satisfaction of the Chamber of Commerce and the officials of the Treasury.
This led to the establishment of an arrangement which is working saiLsfactorily,-rf a member of the Association considers himself aggrieved by action of any Department of the Government, he presents the matter to the Executive Committee of the Chamber of Commerce; if that Body sustains his contention the matter is presented to the Provisional Governor and referred to the Department involved for investigation and report; if a different of opinion is found to exist the question is determined by the Governor. This plan saves both time and trouble for the Government; it has 'brought about a much better


feeling and alleviated the "irrepressible conflict" that in all countries is waged between importers and Customs officials.
The approximate value of goods imported and exported during the Fiscal Years of 1905-6 and 1906-7, is shown in the following statement:




United States ............. $ 48,830,629 $ 48,197,234 $ 88,981,407 $ 98,141,012
Germany ................... 6,593,215 6,435,969 4,309,794 3,130,757
Spain ........................ 10,647,860 8,287,061 768,686 413,305
France ....................... 5,564,301 5,781,602 1,580,047 1,002,329
United Kingdom ........ 14,987,900 13,639,130 5,869,376 4,446,223 Other Countries in American ..... 12,833,135 9,501,412 2,208,415 2,211,504 Other Countries in Europe ........ 3,970,0121 3,434,585 11M,529 821,672 All other Countries...... 968,540 1,398,996 675,061 598,135
Tbtalg ......... 1$ 104,395,592 $ 96,673,9891 105.199,3151$ 110,764,937




United States ............. $ 553,698$ 7,558 $ 1,215,472 $ 3,373,000
Spain ........................ 279,360 18,526 842,083 238,255
France ....................... 1.27 6 4. 3 639,222 ....... 36,364
Other Countries .......... 260 .................. ..................

Totals ......... $ 2,1091752$ 665,306$ 2,066,898$ 4,047,909

In order to test the financial condition of the people at large, I requested statements of annual gross receipts since 1903 of the Havana Electric Street Railway Company, the Havana Gas and Electric Light Company and the Savings Department of the Banco Nacional; these institutions being dependent upon the general public for revenue and doing business with all classes. The showing. made by these corporations is as follows:



(Gross receipts from 1903.)

MONTH j1903 1904 1905 196 1907

January ....... 76,081.57$6 86,549.99 $ 92,849.29 $ 0,9.1$ 136,034.51
February.... 72,952.58 82,504.93 83,505.5 6038 122,075.65
March........ 76,320.01 82,645.40 85,868.75 9,2.8 121,206.72
April ............ 73,040.13 81.007.03 80,658.23 101,686.77 122,726.89
May ............I 71,670.74 82,175.59 82,906.79 115,100.26 121,958.12
June.I........ 76,711.23 76,079.65 76,460.68 104,299.48 118,003.95
July .......... 68,168.52 76,703.40 77,139.531 105,607.85 118,641.89
August ....... 70,688.801 82,701.17 82,127.811 111,848.10 124,35586
September. 74,963.161 80,870.58 84,007.99! 117,0816 132,60279
November 8... 6,149.641 92,568.84 9,3.7 1,747.39 143,000001 Approximately
December 96,244.191 103,688.65 1098,439.51 131,1912 4,0.0jEtmtd

TOTAL ... 922,944.36161,014,915.13 81,043,762.96 61,326,662.93 $1,547,605.88


(Gross receipts of the operation of Electric Road in Havana including
gross receipts of Stage Lines from 1st; of April 1903.)

MONTH 1903 1904 1905 1906 1907

January......... 75,921.308 119,585.74 5 130,296.91 6 156,847.42 S 175,830.83
February...... 79,9124.28 117,564.04 128,789.08 147,951.38 162,834.98
March .......... 88,139.74 128,408.52 144,977.01 175,687.70 181,564.21
April............ 116,755.84 120,703.24 137,013.95 136,081.78 168,401.86
May ............. 123,949.33 127,242.58 154,757.29 160,85)0.79 176,003.10
June ............ 117,963.84 123,580.49 147,133.86 156.414.29 175,710.92
July ............. 118.648,88 127,865.42 168,629.15 167,832.14 181,650.58
August ......... 125,408.95 150,794.05 158,254.19 169,353.42 192,504.05
September .. 124,171.78 125,949.23 151,276.70 151,719.96 179,559.66 October .... 118,56*2.70 131,018.20) 180,250.83 166,217.39 179,076.17 November .. 110,229.12 125,810.68 159,072.80 160,471.32 182,000.00 1 Etited
December 114,518.48 187,316.82 151,112.08 182,521.48 184,000.00)J d
TOTALS. $1,313.292.19 61,515,289.01 81,806,568.88 61,.981,399 02 62,139.135.76 INCREASE ...1441,597.05 201,994.821 291,274.82 12,3.9 207,736.74

The showing as to the Savings Department of the Banco Nacional, was submitted by letter from the President of the Bank, Mr. Edmund G. Vaughan, from which the following is quited:

"Permit me to say in this connection that the records of the Savings Department in the National Bank of Cuba during the two worst months of the year-September and Octobershow the following: During September there were 206 new accounts opened which aggregate, all monies being reduced to United States currency, over $117,000.00. In October there were accounts aggregating $ 119,000.00, making a total for the two months of 416 new accounts for an aggregate amount of $236,000.00.


The accounts current were almost in the same proportion, but, of course, in much larger amounts, an d yet, perhaps, not as significant. This same proportion of gain has been maintained through the month of INovember. These figures only apply to the Head Office; the Branches having shown a gain throughout, but not in a proportion as great."

This gratifying showing does not mean that economic conditions cannot be improved nor that there are no economic wastes to be checked or evils to be remedied.
The attention of the Provisional Administration was early directed to the opportunity and necessity for improving certain economic conditions. The matters pressing for consideration Wcre'1. The sanitation of the island.
2. The large number of unemployed, annually, during the months of the dead season (May to Recember.)
3. The absence of roads, harbor facilities and other aids to navigation, necessary for the economic production and marketing of the crops.
4. High cost of transportation by railroad, wagon road and ocean-going vessels.
5. The high rate of living; i. e., food, clothing, rent, building material, etc., in the cities and towns.
6. The small margin of profit in the production of sugar.
7. The high interest rate for money.
8. The low price paid for common labor.
9. Extortion by money loaners dealing with wage-earners.
10. Unjust restrictions upon commerce and shipping imposed by the Customs House regulations.
11. A banking law.
12. The use as legal tender and currency of three different kinds of money.

The sanitation of Cuba is of more than national importance;

SANITATION. it is international and is made the subject of
constitutional provisions and treaty stipulation, by both of which the National Government is bound to take such steps as may he necessary to prevent "a recurrence of epidemic and infectious diseases."
The people of Cuba fully appreciate the great advantages that will accrue to the Island from its proper sanitation, and are anxious to secure those benefits. The Cubans realize the necessity and advantages of proper sanitation to a much larger


degree than do the people of the United States in the communities with which I am familiar; but they look to the Governm.ent for the accomplishment of sanitation instead of making the necessary individual effort.
The Military Government (1899-1902) made a brilliant record of individual achievement and administrative excellence in the matter of sanitation; but remitted to the Republic the enactment of an adequate law for continuing that service at a high standard. The Republic by Executive Decree provided for the organization of a Sanitary service, co-extensive with the Island, and prescribed rules and regulations for the performance of the service. The Cuban Congress (1906), appropriated a total of $3,646,216 for public works and other objects calculated to promote sanitation and for sanitary services in the cities and towns of the Island. The law promulgated by the President provided for a Central Board of Sanitation, with headquarters in Havana, and a local Board of Sanitation in each municipality to be appointed by the municipal authorities; the expense of the sanitary service to be paid by the mur cipalities and to be provided for in the annual municipal budgets. The revenues available to the municipalities were not sufficient to permit the apportionment of the amount necessary for sanitation and, therefore, the National Government was called upon to supply the deficiency. Upon trial it was found that the plan of having the local sanitary officers appointed by and subject to removal by the municipal authorities resulted in the sanitary services being improperly performed or entirely omitted. However much a man may believe in the theory and advisability of complete sanitation he -usually -objects to the strict enforcement of sanitary rules and regulations against himself. The officer attempting to enforce the law usually becomes involved in difficulty with the offender and complaints to higher authority, which frequently result in reproofs, restraints and, sometimes, dismissal. Not infrequently the offender is a municipal official and the sanitary officers are unwilling to bring him to account for fear of losing their places, or if they undertake to secure proper punishment, the local police and judiciary are indifferent or ineffective. Under these conditions it seemed advisable for the National Government to be charged with the execution as well as the responsibility of proper sanitation. To


accomplish this result a Decree was issued nationalizing the sanitary service of the Island. This Decree provides for a National Board of Sanitation charged with the responsibility of securing proper sanitation and given the authority necessary for accomplishing that result; the local Sanitary Boards are abolished and substituted by a Chief Sanitary Officer in each of the municipalities who is appointed by the National Board; these Chiefs of Sanitation are under the direction and control of the National Board and may be removed by the Board; the municipalities are required to devote one-tenth of their total revenues to defraying expenses of sanitation-the money is paid to the National Treasury and made available for the intended purpose; the cost of sanitation in the municipalities, in excess of the amount contributed by the municipalities, is defrayed by the National Government; penalties are prescribed for violations of the Sanitary rules and regulations and may be imposed by the Chief Sanitary Officer of the municipality, but appeal may be taken by the alleged offender to the Courts. The new organization is rapidly approaching completion and if the plan is successful it will doubtless lead to the creation of 'a new Executive Department to be known as the. "Department of Sanitation. "
The importance of sanitation to Cuba is not confined to the health of its inhabitants; it has a direct bearing upon its development and commerce. Cuba is capable of sustaining a population many times the size of the present number of inhabitants, but it will be impossible to secure such a population of persons who are immune to yellow fever and other diseases which may be averted by proper sanitation. Consideration must also be given the fact that it will be of little use to construct roads, improve harbors, erect lighthouses, etc., if, annually, the ports of the world are quarantined against the ports of Cuba. Ships will not seek to enter the harbors of the Island if thereafter they are debarred from entering the harbors of other countries. When the Panama Canal is completed, the seaports of Cuba will be visited by many ships destined for passage through the Canal, but these ships will avoid Cuba if visiting the Island debars them from entering the Canal. The Cubans appreciate all phases of this question, and the plan of making the sanitary service a National matter received the hearty approval of the public at large.


General economic principles and the special conditions NEEDED IMPROVEMENTS existing in Cuba impel-led the beIN TRANSPORTATION FA- lief that the basis of permanent CILITIES. improvement was the construction
of roads, the improvement of the harbors and the placing of lighthouses, buoys and other aides to navigation calculated to induce shipping to frequent the coast.
The principal products of Cuba-sugar, tobacco, timber, fruits, vegetables and iron ore-find their market in foreign countries, and must be hauled from the place of production to one of the harbors of the coast that can be entered by oceangoing craft and after being loaded on such vessels transported to markets across the sea.
There are at least forty harbors on the coast of Cuba that, at relatively small expense, can be improved sufficiently to be entered by ocean-going vessels. At present six harbors are available for such purpose and none of these are adequately equipped for easily and quickly handling cargoes and all of them need dredging. These harbors are reached from the interior by railroads and from along the coast by small sailing craft. Many portions of the Island are not as yet supplied with railroad facilities and the cost of transportation by rail is great.
Cuba is annually subjected to a great economic waste by reason of the lack and cost of inland transportation. On the first of October 1906, there were less than five hundred miles of macadamized road in the entire island. The small island of Jamaica has one thousand miles of macadamized road. The products of Cuba are hauled to the markets over trails that are barely passable during the dry season and absolutely impassable during the rainy season. In many localities it is impossible to transport the prod-acts in wagons or carts and necessary to pack them on horses or mules. Where carts can be used it is necessary to employ from four to ten oxen, horses, or mules where two would be sufficient if good roads existed. Days are spent in hauling a load to market where hours would be sufficient if the roads were good.
The sugar mills of the island are sufficiently far apart to require that the greater portion of the cane raised must be transported for a considerable distance in order to be ground. Owing to the difficulties of wagon transportation a large por-


tion of the cane is hauled from the colonies to the mills on the railways. The rates of railroad transportation are high, and when good highways are provided, a large saving to the agriculturists will result.
Cuba is -dependent upon the agricultural products-with the exception of its forests and iron ore-for the production of wealth. Its principal agricultural product is sugar cane. The cane, when first planted matures in about eighteen months and thereafter is produced, without replanting, up to fifteen years. It is seldom necessary to clean out the weeds more than once a year. The cutting, hauling, and grinding season lasts from about the middle of December until the beginning of the rainy season, which usually starts early in May. The cane is cut by hand and, during the cutting season, a large number of men are employed. They work from daylight until darkness on all plantations and some estates are fitted out with electric lights to enable the cutting to proceed during the night time. This season of the year is the period of growth and harvest for tobacco, fruit, and vegetables. The harvest being completed there is but little to do on the sugar estates, fruit and vegetable farms and, therefore, about seventy-five per cent of the rren necessary to harvest these crops become idle. The money they have been able to save from their earnings during the crop season is hardly sufficient to maintain them during the remaining six months of the year, and is usually improvidently expended. The tobacco crop furnishes employment for a longer period of eachyearas the preparation of the leaves for market requires numerous handlings and constant attention, but does not provide employment for many more persons than are engaged in raising the crop. Practically all of the cane cutters are without employment for six months in the year and by August are without money or means of support for themselves and families. The most important economic question in Cuba is to secure employment for this large number of men during the six months intervening between the harvest periods.

Under these conditions the proper course for the GovernROAD CONSTRUCTION; ment to pursue was plain; viz: to inEFFECT ON PUBLIC crease road construction and other
TRADE. public works during the dead season.
Orders were issued to the Department of Public Works to


prepare a general plan for a system of macadamized roads throughout the island. The torrential rains of the tropics make it unwise to construct dirt roads. The instructions to the Department of Public Works were to plan a system of roads which should consist of a highway running east and west, approximately through the center of the island, with branch roads running north and south to a harbor on the coast with at least one harbor on the north and one on the south coast of each of the six provinces into which the island is divided; the equipment of said harbors for handling cargoes easily and quickly; and the erection of lighthouses and placing of buoys along the coast, where needed, thereby inducing ocean going craft to frequent the coast and securing the competition necessary to reduce the price of ocean transportation; at the same time the increased traffic resulting from the development of the country will give ample compensation to the railroad and steamship lines for such reduction. In attempting to execute these orders the Department of Public Works found itself without necessary personnel and equipment, but these were supplied as soon as possible. The Provisional Administration desired to have everything in readiness to commence work on this large endeavor at the close of the sugar harvesting season in May, 1907, but the work, was retarded; at first by the fear that the National revenues would be diminished as a result of the revolution and cyclone; and, second, by the difficulty in securing competent personnel for drafting the plans and specifications, While the plans were being made, effort was made to locate contractors with sufficient means and machinery to do the work which would be entered upon during the present fiscal year, and it was found that there were only a few contractors so equipped, and that they did not possess sufficient amount of machinery to do the desired amount of work. Thereupon the Government decided to contract as much o" the work as possible and to do the remainder, for the current fiscal year, by administration. This necessitated the purchase of a large amount of road-making machinery; such as steam rollers, steam shovels, graders, traction trains, etc. Considerable time passed before the Government and the contractors could secure the necessary machinery; in fact, all that
required has not yet been delivered, but much of it has been received and other deliveries are contracted for and are being


made from time to time. Bids were called for by public advertisement, but it was impossible to get the work started until late in July, and it was the latter part of August before it was fairly inaugurated.
While impossible to completely execute the plan of public improvement above outlined within the period fixed for the continuance of the Provisional Administration, the general plan is adopted and has already received unanimous approval; the detail plans, specifications, etc., will be completed, the Public Works Department sufficiently expanded and trained personnel secured, the machinery purchased, delivered and installed, and the work sufficiently advanced, to make it fairly certain that the plan will be carried out within a reasonable period. Induced by the adoption of the general plan and the call for bids, a number of contractors have purchased the necessary machinery for road-making plants. The private concerns have invested large sums of money in purchasing outfits for executing contracts on this work and will materially aid in inducing the continuance of the work.
Attempt was made to rateably distribute this work in all the provinces and to begin work in each at about the same time. The obstacles to overcome were so numerous that it became necessary to concentrate effort on one province at a time. Pinar del Rio was selected as the first; largely because it was feared, at that time, that the tobacco crop of that province for the year 1906, would be nearly if not a total failure-timely rains, however, made the crop satisfactory in quantity and quality. As soon as the preliminary work in Pinar del Rdo province was completed, Havana province was taken up, and shortly thereafter Matanzas province. The work is not yet fully started in Santa Clara, Camaguey and Oriente provinces; although work on some of the roads commenced late in the semon and other roads are being projected.
Three principal objects were contemplated by starting these public improvements-the development of the country, the reduction of the economic waste resulting from the diffieulties of transportation, and the improvement of the industrial situation by providing employment for a large number of men who would otherwise be idle. The belief was entertained that the construction of-these roads would also tend


to preserve public tranquillity and substantially promote trade and commerce.

The public necessities did not permit the work of public PUBLIC NECESSITIES improvement to be confined to the
AND IMPROVEDIENTS. rural districts. There is great need in Cuba for national, provincial and municipal betterments; such as school houses, post offices and other public edifices. The cities and towns need public buildings, water works, sewers, pavements, parks, etc. The existing structures devoted to, governmental or public use are largely the old Spanish forts, jails, churches, convents, etc., and need to be remodeled or reconstructed. Much of this work was done by the Military Government and the Republic, but the buildings are old and not adapted to the purposes to which they are devoted and many of them were allowed to fall into disrepair. The cyclone of October 1906, damaged practically all and demolished some of them.

The necessity of municipal improvements is very great. ASSISTANCE TO It is reasonable to estimate that it will
MUNICIPALITIES. take not less than $75,000,000 to provide, the municipalities of Cuba with the public improvements desired and needed by the inhabitants.
In distributing the powers of taxation, the laws of Cuba do not provide means for the municipalities to secure sufficient revenues to provide for municipal improvements considered essential to modern life and which are usually paid for with municipal funds. This will be remedied, in part, by the new law of Municipalities. Meanwhile the Provisional Administration continues the policy pursued by the Spanish administration, the Military Government, and the Republic, of using a reasonable proportion of the National funds in aiding the municipalties; but when possible, the municipalities have been required to participate in the cost by appropriation of municipal funds or private subscription, and also to make provision for the maintenance of the improvement at the expense of the municipality. In order to secure proper investigation and determination of the innumerable applications for aid to municipalities, and to prevent improvident expenditures, a Board of Municipal Aid was appointed, consisting of Lieut. Colonel Wm. M. Black,


President, Lieut. Colonel E. St. J. Greble, and Major J. R. Ke an, all of the U. S. Army, to whom these applications are referred for examination and recommendation (see report of Board transmitted herewith). This Board made an examination of the receipts and expenditures of the various municipalities, and fcund that, though, in general, a wiser administration of municipal funds would make provision for the municipal needs, excepting those requiring the immediate expenditure of large sums such as water works, etc., under existing conditions a continuation of State aid is advisable.
All petitions from private citizens are referred to the authorities of the respective municipalities for recommendation. Allotments of funds are recommended for necessary work, as far as practicable in such a manner as to be equitable throughout the island. Action has been taken on 107 petitions. Fortyone cases were favorably reported on; thirty-four cases were disapproved. In the other eases final action has not yet been had. The adopted policy is to provide first, when possible, the works most needed for sanitation, such as water supplies, slaughter houses, cemeteries, markets, etc.

The trade and commerce of the island have been greatly TRADE AND stimulated by the distribution amono, all clasCOMMERCE. ses of the large amount of moneyexpended for public improvement. The laboring man, from necessity, expend,% his money as soon as received in purchasing supplies for himself and family. As before noted, this year has been one of exceptionally long and continued drouth. The tobacco crop (lid not "cure" as rapidly as usual and, in fact, is not yet marketed. The revolution of 1906 induced many people having loans in Cuba to refuse extensions and insist on payment. Ordinarily under these conditions the trade and commerce of the island would diminish, yet for the nine months from December 1st. 1906, to August 31st, 1.907, inclusive, the receipts of the Havana Customs House show an increase over the receipts for the same period of the year 1905-6 of $536,044.80, being an average monthly increase of $59,560.53. By August 1907, the work of road building and other public improvements was well under way and the effect upon business is shown by the fact that Customs House receipts for the Island for September and


October amounted to $5,131,524.76, being a monthly average increase of $360,133.02.

The events in Cuba during 1906,-revolution, retirement LIQUIDATION or of the Palma administration, and
PRIVATE INDEBTED- the cyclone-naturally injured priNESS BY PLANTERS. vate credits and induced many foreign and domestic creditors to seek to collect their accounts. This liquidation of private indebtedness has continued through the year and a large amount of indebtedness has been discharge ed. Under ordinary circumstances this period of liquidation would have terminated at the end of a year, or by October 1907, but, unfortunately, in October of this year came the panic and the resulting world-wide money stringency. Owing to the liquidations of the year, the panic did not produce a financial crisis in Cuba's business circles, but it further continued the demands for payments and will undoubtedly extend the period of enforced liquidations at least another year. These periods of general payment of debts are exceedingly beneficial and are usually recognized as such after they are completed, but while the liquidation is going on, individuals suffer and considerable discontent prevails.
The severities of the situation in Cuba have been reduced to a minimum by the expenditures for public works and the wonderful fertility of the Island: These combined have kept trade, commerce and industrial activity up to, if not beyond, the average. The liquidation now in progress, when accomplished, will put the commercial and industrial interests of Cuba on a conservative and solid foundation, for the first time in the history of the Island. During the many years of intermittent warfare by which the Cubans gained their independence, and during the Spanish-American war, conditions were abnormal; the time of the Military Government was a period of readjustment and re-organization during which normal conditions could .neither be reached nor ascertained; during the first three years of President Palma's administration there was an abnormal stimulus to trade and expansion of credit resulting from the distribution among the Cubans of $2,544,750 ostensibly for the purchase of the arms held by the late soldiers of the Armies of Liberation; and shortly thereafter, the payment of $27,716,248.59 to the soldiers of said armies for military ser-


vices in the war with Spain, and at -a later date, the payment of $16,553,869.59 in cash, and $10,617,000 in bonds, in further compensation for said services, making a total of $57,431,868.18. This money was distributed so long after the service was rendered that the recipients had forgotten how hard they had labored to earn it. With most of them it was easy come, easy go ".
In 1903 the price of sugar was high; the yield per acre and total output in Cuba was the largest in the history of the island up to that time; the profits of the planters were great. In 1903 the money markets were glutted with money seeking investment, and the knowledge of the probable profits of sugar production in Cuba caused a flood of money to the Island for investment in that industry. Sugar mills sprang up and cane fields were planted all over the Island with more attention given to early completion than to economical expenditure.
The establishment of the Republic afforded opportunity for thousands of Cubans to hold official positions with rank and emolument.
Under these circumstances it was inevitable that unnecessary credit would be tendered and accepted and extravagant expenditures incurred; such has been the result in all countries at all times under similar conditions. But now the money distributed by the Government has been spent; the notes given for money loaned to build sugar mills and plant cane fields, have matured, and the period of liquidation set in something wore than a year ago. The sugar industry in Cuba is in a flourishing condition and, as an industry, will promptly and easily meet all the demands of liquidation. This results from the fact that many of the estates are free from mortgage or owe no more than they can readily handle. There are other mills and estates that are not as well conditioned, having borrowed more than justifiable or omitted to reduce the indebtedness in previous years. These need only time and economical administration to pay out in full.
The properties are fine investments, being new and modern, and the conditions for growing cane are ideal; there is no possibility of a total crop failure such as in past times periodically visited the agricultural portions of the United States. New cane fields are started every year. The world's


consumption of sugar increases every year. Theoretically the outlook for the sugar industry is most encouraging.
The principal difficulty with which the sugar planters contend is the expense incurred in preparing the fields, cutting and getting the cane from the field to the mill, grinding and converting into sugar, transporting to market and selling the product. This requires a large amount of money and must be done in about six months; during the remainder of the year the mills are practically closed and the estates are kept up at comparatively small expense. If the money can be obtained at reasonable rates, it is good business to borrow for the period of the harvest season instead of making it a permanent addition to the capital invested. In an ordinary year the money to make the crop is wanted in November. At that season of the year money is in demand in the United States to move the crops of cereals and equally in demand in Europe to purchase these crops. It is also near the end of the year when the annual balances are struck in all lines of business and banks through,out the world are drawing in their temporarily outstanding accounts and over drafts in order to close their annual business.
The usual practice is that the planter applies to a money loaner, either directly or through the lender's agent, on or about August 1st for a certain amount of money required to help him through the season; i. e., he will require, during the months of August and September, money for repair of machinery actually installed, or money for the installation of new machinery, also considerable money for the preparation of the fields for the planting of cane. In this case the planter not only offers to compensate the money lender by a payment of good interest-ranging from 8% to 147o-but also binds himself to sell to the lender the sugar which is ground until the indebtedness is liquidated, on which the lender receives an additional commission as selling agent. The loans are repaid all the way from January to June or July; i. e., as the sugar is sold -either the whole or part of the receipts therefrom is applied to the liquidation or reduction of the actual loan existing. In Cuba, as in all other countries, the large planter whose plantation is not mortgaged to the limit, or even beyond the limit, has no difficulty whatever in obtaining money and credit, but the small planter, or even the large planter who is not so fortunately situated, is under the double disadvantage


of havin g difficulty in obtaining credit, and, if obtained, the interests and commissions collected are so enormous that he is fortunate indeed if sufficient funds remain to fairly compensate him for his labor.
When the high cost of selling the sugar is added to the high cost of transportation by land and sea of the cane, the supplies for the estates, the sugar, etc., it will be seen that the present low price of sugar gives the Cuban producer little margin of profit. The outlook for the season of 1907-8 is that, owing to a reduced yield throughout the world, the price of sugar will be higher than that now prevailing. In anticipation of higher prices the sugar mills are agreeing to pay higher prices for cane. If the price of sugar goes up, the situation of the Cuban planters will be relieved, temporarily at least, and if the profits realized are -devoted to reducing existing indebtedness, a partial permanent relief will be secured. Good roads, and enough of them, will effect a further saving by reducing the cost of inland transportation; while harbor and coast improvements ought to secure sufficient competition to reduce the rates of ocean transportation.
There remains to be solved, however, the question of permanently reducing the excessive interest rate. On behalf of the money loaners consideration must be given to the fact that they cannot put out at interest for twelve months in the year the large sum necessary to supply the demand for money during the cropping season. A large share of the money must therefore be borrowed in foreign countries and considerable expense incurred in bringing the cash to Cuba; transportation and insurance rates are high and as the money is ordinarily returned at the end of six months, these costs both in and out must be included in the charge for the use of the money for that short period. While under normal conditions it is easy to secure more than sufficient funds to make the crops in Cuba.. yet the manufacture of sugar by the modern methods now adopted, is a comparatively new venture in Cuba and a good many of the new concerns have not had time to establish their credit,-they have not yet demonstrated the success of their establishment, and the banker or money loaner must rely upon his own established credit to float the paper of such manufactuners. From this it results that an attractive interest rate must be offered the foreign banker and the local lender must not


only recoup himself but make certain that his guaranty will not fail. In short, the lender truthfully says "The cost to me is high and I must protect my credit". Banks, ordinarily, make loans from their deposits on which they pay no interest, or a very low rate. There are in Cuba many millions of dollars hoarded in the safes and houses of the people. It is a comparatively small per cent of even the business men of the island who deposit their money in the banks. This results from the secretiveness of the people induced in times past by fear of extortion, enforced loans, confiscation, excessive taxation, etc., It takes time and a high degree of confidence to overcome this practice of generations. I am convinced that if the money in Cuba now withdrawn from circulation and retained in the possession of the owners was deposited in the banks and the moneys used in general business was passed through the banks to the extent prevailing in other countries, there would be available to the banks ample funds from which to advance the money required to make the sugar crop and plant, raise and cure the tobacco crop; and as this money would cost the banks little or nothing, there would be an immediate reduction in the interest rates to the planters and business men. The first step in securing this economic and advantageous reform is to secure for the banks general and unwavering confidence by seeing to it that they are entitled to that confidence. There is no banking law in Cuba. All the banks of the Island are private institutions and rely for credit upon their established reputation and to known probity and means of the men by whom the
bank is owned and operated. A good banking law adapted to the conditions in Cuba, properly regulating their organization, providing for thorough inspection, requiring adequate reserve fund and securing for them the known approval and confidence of the Government would be of great service to the banks and 01' inestimable advantage to the Island, for it would within a short period of time, if not immediately, bring to the banks the large amount of money now withheld. The existence of these private hoards is known; their amounts can only be guessed. That the total must be a vast sum is shown by the fact that the balance of trade between Cuba and the other countries with which it deals, has for the past six years been greatly in favor of Cuba. If the balance of trade with a country is continuously in favor of that country, such country eventually


becomes rich, unless the money so realized is withdrawn by non-resident proprietors, investors, etc., or carried abroad by residents and spent in foreign sojourn and travel. It is a fact that much of the money realized from the products, industries, trade and commerce of Cuba is withdrawn from the island because of the large foreign holdings in its factories, mills, commercial houses, railroads and other public service corporations. This is the inevitable result of the necessity for bringing in foreign capital at the close of the struggle for independence and the Spanish-American War. This will gradually be eliminated as the residents of the Island acquire the means and inlination to invest in home enterprises, and the process is already at work. There is one phase of the matter that should be remedied and would be corrected by an adequate and safeguarded banking system. Many of the public service corporations, large mills and manufactories, and not a few commercial institutions do their banking with banks in foreign countries, shipping the cash or remitting through the local banks all in excess of the amount used to defray current expenses and not infrequently to such extent as to require drawing on these foreign -deposits to meet cost of operation. The surplus out of which is paid interest on bonds and dividends, is deposited in and used by the foreign banks during the intervals between the time of deposit and the payment to bond and stock holders. If these funds were available to the banks of Cuba upon the same terms as the foreign banks secure them, a reduction in interest rate would be inevitable, without reduction in the profits of the bamks.
There is a desire, often expressed by planters, for the establishment of an Agricultural Bank along the lines of the Mexican Bank, or tlie Agricultural Bank provided for in the recent law of the Philippine Commission, or the Credit Foncier of France. This proposal requires careful study, investigation and consideration. Among other things it requires decided changes in the law of mortgages and foreclosure proceedings. There are serious objections to the Government going into the banking and loaning business; but there are also serious objections to the principal industries of the Island being subject to exorbitant interest rates. There has been also an insistent suggestion from individual planters that the Government loan the planters money directly from the National Treasury. Num-


crous other suggestions have been made as to ways and means for assisting the agricultural interests of the Island. All of these plans require study either to give them practicable execution or to establish their impracticability.

There exists in Cuba an organization of sugar planters APPOINTMENT OF ADVIS- known as the "Liga Agraria"
ORY COMMISSION OF (Agricultural League). This AsAGRICULTURISTS. sociation requested that a Cornmission be selected from the membership of the League to study, formulate and recommend to the Government such measures as were considered, after due investigation, to be proper and advantageous for both the Government and the interests they represent. This seemed to afford a practical and appropriate means of securing tangible results and the request was granted. The membership was extended to include representation for the tobacco planters and a Commission appointed composed of the following gentlemen: Rafael F. de Castro, President; Gabriel Casuso, Manuel Froil~n Cuervo, Leopoldo Sola, Eduard. Dolz y Arango, Claudio G. de Mendoza, Luis S. Galb~n, Jos6 Maria Espinosa, Luis Marx, Lorenzo D. Beci, Juan Maria Cabada, Roberto B. Hawley, Miguel Machado and Gabriel Camps.
I record with pleasure that these gentlemen tendered their services free of expense to the Government, and upon being informed that the Government felt that they were entitled to compensation, replied that their determination to render gratuitous service was irrevocable.

Pending the solution of questions 'relating to the permaLOAN oF nent improvement of the financial needs of
$5,000,000 TO
BANKS. Cuba, an emergency arose with reference to
the supply of money for harvesting the sugar and planting the tobacco crop. To meet the situation the Government offered to deposit the sum of $5,000,000 in the local banks. The reasons for the offer and the terms and conditions are set forth in the Decree authorizing the same, -as follows:

"Whereas: The harvest season for the sugar crop, the planting season for the tobacco crop and the marketing season for the fruit, vegetable and minor crops of the Island of Cuba are now at hand; and
"Whereas: The planters of Cuba are accustomed to em-


ploy their credit for a period of six months in securing the money necessary to harvest and market the agricultural products of the island; and
"Whereas: A large portion of the tobacco crop of the last season has not yet been sold, owing to the unusual length of time required this year for the drying and otherwise preparing said tobacco crop for the foreign market; and
"Whereas: The condition of the money market in foreign countries make it impracticable for the banks and financial institutions of Cuba to secure all of the money required by the necessities of the agricultural industries in the island at this critical season of the year; and
"Whereas: The financial condition of the National Treasury of Cuba is such as to permit the withdrawal, for the period ordinarily consumed in harvesting the crops, of a sum sufficient to supply, in large part if not in its entirety, the necessities of the planters and overcome the existing emergency; and
"Whereas: It is the duty of the Government to adopt such reasonable and legitimate measures as will assist, protect, and promote the industries of the country and the welfare and prosperity of 'its citizens; now
"Therefore: By virtue of the power vested in me as Provisional Governor of the Republic of Cuba, I hereby


That the sum of five million dollars ($5,000,000), or qo much thereof as may be necessary, shall be withdrawn from the National Treasury of Cuba and deposited in banks and banking institutions doing business in the Republic of Cuba; not to be called for or drawn upon until July 15, 1908; said deposits to be on the following conditions:
"A bank or banking institution of Cuba desiring to secure a deposit of any portion of said funds made available for said purpose by this decree, shall make application therefor, in writing, to the Secretary of the Hacienda setting forth the amount desiredand kind of security offered as a guarantee for repayment to the Government of the funds to be deposited, as well as affirmative statement that the funds, or any part thereof, if so deposited, will only be applied to assisting and promoting the industries of the Island of Cuba. Said application must be presented prior to November 30, 1907, on which last named date the Secretary of the Hacienda shall submit all applications received to the Provisional Governor of the Republic of Cuba for approval or disapproval. The Government reserves the right to reject any or all of said applications, or to approve any of said applications in whole or in part. .
"The application of the bank or financial institution of


Cuba being approved by the Provisional Governor, the Treasurer of the Republic of Cuba is hereby authorized to deposit in said bank or fmancial institution public funds hereby made available for that purpose to the amount authorized by the Provisional Governor of the Republic of Cuba;
"Provided: That said bank or financial institution shall make, execute and deliver a certificate of deposit in due and legal form, acknowledging receipt of such deposit and binding the bank or financial institution as to the use, during said period of the funds for the purposes only heretofore specified and to return of said deposit, when called for, at any time on or after July 15, 1908; the Government reserving the right, that in the event the deposits so made are applied to other purposes, such as for export, etc., to withdraw the deposit at any time prior to July 15, 1908; the bank or financial institution agreeing, also, to pay interest at the rate of six per cent (67o) per annum for the time said deposit remains unpaid or not returned to the Government after July 15, 1908; the bank or financial institution to have the right to return said deposit to the National Treasury at any time without waiting to be called upon by the Treasury; and
"Provided further: That any bank or financial institution receiving such deposit shall give collateral security for the repayment thereof by depositing in the National Treasury approved bonds of the kind hereinafter named, and assuming the obligation to reinforce said security or securities whenever said security or securities, on account of market fluctuation, shall decline one point or more in value.
"The following securities listed, quoted and dealt in, in the Havana Stock Exchange will be accepted at ten per cent (10%) less than the actual market value thereof on the date when the deposit is actually made, but no security will be accepted above par value:
Bonds of the
Republic of Cuba, 1896-7.
Republic of Cuba (Speyer).
.Republic of Cuba, internal indebtedness.
City of Havana, first and second mortgage.
Gas and Electric Light Company of Havana.
Havana Electric Railway Company.
United Railways, consolidated.
"A sufficient number of said bonds must be deposited as guarantee and security to equal the amount of the deposit; taking into consideration the ten per cent (10%) reduction from said market value".

At this writing (November 21st) the banks have not sub-


emitted their proposals but they have made known their intention to subscribe for all the funds thus made available.
The effect of this Decree upon the public mind and business interests was exceedingly beneficial as it removed whatever doubts or apprehensions which existed and induced the bankers to release the funds on hand in their banks.
The satisfaction with this measure was communicated to the Government by resolutions of representative bodies, congratulatory messages, etc. From a number received I select and quote the resolution of the Chamber of Commerce, Industries and Navigation of the Island of Cuba, as follows:
The Chamber of Commerce, and the other financial institutions, as well as the merchants and manufacturers whose names appear below, have the honor to address this message to you, solemnly expressing the satisfaction felt by all social classes on account of the measures lately adopted in favor of the agriculture and industries of the Island of Cuba by the government entrusted to your honorable direction.
"One of said measures is the one recently adopted with the view of putting in circulation for a certain stated period and without any interest the sum of five million dollars from the National Treasury; the end contemplated being, and no doubt as you hope it shall be, to reinspire confidence, to facilitate operations and to develop the public wealth.
"Kindly accept, Mr. Governor, the expressions of satisfaction which this message embodies, and the assurances of our most distinguished consideration."
The industrial situation has been complicated by numerous
STRIKES. strikes. The first strike was that of the cigarmakers. The cigar factories had been paying wages in Spanish gold. The cigarmakers and other employes demanded payment of wages tin American currency at the same schedule theretofore paid in Spanish gold; this meant a ten per cent increase in wages. The strike involved about one-half of the factories in and -about Havana. Thinking to break the strike the owners of the remaining factories declared a lockout. The combined strike and lockout continued from February to July. The strikers abstained from violence and not a single violation of the peace, as a result of the strike, occurred. Eventually the proprietors of the factories against which the strike had been declared granted, in full, the demands of the workmen and a few days later the factories which had declared the lockout made similar concessions.


Induced, doubtless, by the success of the cigarmarkers' strike, the masons and plasterers demanded pay in American currency and an "eight-hour day". These demands were denied by the contractors and thereupon the workmen in these trades, and their "helpers", struck. Shortly thereafter the workmen in the shops of the United Railway Company at Cardenas became incensed at the Superintendent and demanded his removal, which, being denied they increased their demand to payment of wages in American currency at the rates theretofore paid in Spanish gold and an "eight-hour day". These demands were denied by the Railroad Company and the engineers, firemen and shopmen struck; also those of the Western Railway, and shopmen of the Havana Central.
These strikes were followed by strikes in a number of the smaller trades, such as the box makers, plumbers, broom makers and carpenters; and the strike of the masons forced manufacturers of cement, brick and tile to close their factories.
!The striking workmen announced their intention to abstain from all acts of violence or intimidation. There have been individual acts of violence committed which the employers attribute to the strikers, but the strikers deny this and insist that the employers are attributing to them all violations of the peace which take place at all times and under normal conditions. Investigation shows that the labor unions and the workmen's -association have been active and vigorous in attempts to preserve order and prevent breaches of the peace, and that they desire to conduct the strike without violence. There has been, however, an increase in violations of the peace since the railway and masons' strikes were inaugurated, and several collisions were reported about the middle of November. There has been considerable ill feeling engendered. Individual strikers and knots of strikers have hooted, jeered and menaced men who continued to work. Several instances of assault and battery have been reported, -and two of the men assaulted have died from their injuries. The largest number of disturbances of thischaracter have been attributed to the striking masons. The masons' union insists that these offences have not been committed by the masons and that their union -discountenances violations of the law. In the erection of buildings there are always a number


of "helpers" employed to shovel sand, carry mortar, stone, brick, etc. These helpers work a few days on one job and then are idle for a few days; -afterward seeking employment on some other job. Generally they may be classed as irresponsible and some of them as vicious. These joined the strike and the authorities attribute practically all of the acts of violence which have occurred to the men of this class.
The railroads complain that old employes who desire to return to workand new men whom they can secure are subject to intimidation by the strikers; that rocks are thrown at their trains; that the track has been greased; that on three occasions shots have been fired; that in several instances switches have been misplaced; obstructions placed on tracks; and that engines have been disabled by cutting of hose, or removal of small pieces of mechanism.
Shortly after the death of one of the workmen assaulted, the owner of two houses under construction made complaint against the strike committee to the effect that they were the instigators of the attack upon men working upon his buildings. The Judge to whom the complaint was made, upon his own initiative, caused the arrest of 213 men, including the President of the Federation of Labor; all of whom, at the time of their arrest, were in the halls of the labor union. These arrests were made without disturbance; the workmen submitted quietly to the orders of the police. The Audien cia appointed a special judge to examine these cases, which resulted in the release of 203 of the workmen, and the other ten were held for trial under bond of $2,000 each. This bond was immediately furnished -and the men released from confinement. Their cases will come before the Court in the regular order. The Judge proceeded under Section 567 of the Penal Code, which reads as follows:

"Tho e who wrongfully combine to enhance or lower the price of labor or regulate its conditions wrongfully, provided such combination has begun to be carried into effect, shall be punished with the penalty of arrest mayor.
"This penalty shall be imposed in its maximum degree on the leaders and promoters of the combination, and on those who shall employ violence or threats to insure its success, unless they deserve a higher penalty by reason thereof."
No disorders have resulted from these arrests, and the exaggerated accounts which later appeared in American news-


papers had no foundation in fact. The Committee of the strikers continue to advocate a peaceful continuation of the strike and exert a wholesome control over members of their associations, except in individual cases.
There has been an insistent demand from those accustomed to the protection of the Spanish regime that the Provisional Government intervene in the strikes and compel the striking workmen to return to work; the Government, however, has declined to do this. The position taken by the Government as to the rights of the strikers was set forth in a letter to the cigar manufacturers, from which the following is quoted:

"The strikers decline to work unless paid the prices fixed by them for their labor. This is a right which every freeman possesses. They offer no obstacles to the manufacturers employing others; and they have not resorted to violence or other, unlawful means of coercing the manufacturers into compliance with their requirements. Their refusal to work may be ill advised, or based upon imperfect understanding, or misinformation, but so long as they conduct themselves in orderly manner as peaceable law abiding citizens, I cannot interfere officially, for the occasion for the exercise of official powers is not presented. "

The position of the Government as to the rights of workmen who desired to return to work, or to accept employment with employers against whom a strike was declared was set forth in a letter to the Civil Governor of the Province of Havana, as follows:

"Complaints have reached me that laborers and mechanics who wish to work are prevented from so doing by display of force by some of the men now on strike; that such display of force consists in surrounding them applying opprobrious -epithets to them, and urging them, in a hostile manner, not to go to work, and otherwise intimidating them. Such intimidation is violation of the rights of the person affected and heisjustifie'd in calling for the police protection of his rights and should receive it.
"A man's right to sell his labor includes the right to select his employer and fix the price, also to deliver and perform his labor when he is satisfied with his employer and wages. The law does not permit a man (in the absence of special contract) to be coerced into involuntary servitude for an unsatisfactory employer, or wages, and equally the law will not permit a man


to be coerced into involuntary idleness when he is satisfied with his employer and wages. From this it follows that any direct, or positive coercion cannot be legally applied or permitted in either instance.
"I believe -a large majority of the working men in Cuba and elsewhere recognize these rights and the value they are to them as well as to the community at large. Under normal conditions these rights are apparent to everyone, but during a strike they are frequently ignored or violated by reason of excitement, passion, or prejudice.
"You will therefore please issue the necessary orders to the proper authorities to prevent the illegal conduct of which complaint is made and forward a copy of the instructions issued by you to the Committees of the strikers for their information and guidance."

Soon after the railway strikes were declared newspaper STRIKE-BREAKERS. dispatches stated that a number of engineers and machinists had departed from the United States for Cuba to take the places of the railroad strikers. A Committee representing the workmen called on the Provisional Governor to inquire if the laws permitted the landing of said reported workmen. The Immigration law of Cuba is an adaptation of the Immigration law of the United States. In both countries the importation of contract laborers is prohibited. The prohibition is not based on the fact that the incoming workmen are foreigners, or that they seek to enter for the purpose of engaging in any particular employment. The law of Cuba being borrowed from the United States, the interpretations of that law by the Courts of the United States are authoritative in Cuba. The Courts of the United States establish that, in order to exclude a workman under the Contract Labor Law, it is necessary to establish: (1) That. the immigrant, before attempting to land, must have entered into a contract to perform labor in the United States; (2) That he must have come to the United States in actual pursuance of said contract; and,
(3) That the person or Company with whom he entered into such contract must have prepaid his transportation. Unless these three facts are established the passenger must be permitted to land.
The Chief of the Immigration Service was advised as to this condition of the Law and that the questions involved were questions of fact to be established by evidence.


The partial suspension of the, railway service had occasioned much inconvenience to a large portion of the general public and considerable pressure had been brought to bear to permit the landing of the alleged "strike-breakers", but the attention of the Chief of the Immigration Service was called to the fact that:
"The laws of a country must be applied impartiAlly, with judicial calmness, and in accordance with established procedure, without regard for rank or station. All just Governments apply the law with equal force to rich and poor, employerand employe, and those of high or low degree. This rule must guide us in this and all other affairs, and I doubt not will commend itself to all Cubans and others interested in the welfare of the Island. "
On the arrival of the boats in which the alleged strikebreakers were shipped, the Chief of the Immigration Service examined the passenger list, and questioned the Captain and Purser as to whether or not there were any passengers on board whose passage had been paid by persons other than themselves, And required their written certificate as to the facts; he also examined each of the passengers and questioned them as to whether they were under contract to work uponarrival in Cuba, or whether they came to Cuba in pursuance of such contract, and whether their passage had been paid by themselves or others. The examination developed nothing justifying the exclusion of any of the passengers and they were allowed to land. The strikers made no resistance and committed no acts of violence, but proceeded to collect evidence and when shortly thereafter a number of said immigrants who were supposed to be strikebreakers entered the employ of the railways, the strikers brought the matter to the attention of the Courts by application for judicial order of deportation. The Audiencia of Havana appointed a special Judge to conduct the investigation; the proceedings therein are not yet concluded.


The Courts and Judges of the Island have a standing as XUDICIAL ]BRANCH high as do the Courts of other counor GOVERNNMNT. tries. The Cubans are deservedly proud THE XUDICIJ4MY. of their Judiciary. This results from
the character and ability of the individuals who constitute the


tribunals, for the codes, procedures and body of laws are not adapted to the form of government or the conditions of society and business now existing. The Courts of Cuba are called upon to deal with a mass of laws quite the most complicated of any unearth. The laws of Cuba consist of a number of 'laws originally enacted for the Spanish Peninsula and subsequently extended to Cuba; thereafter, modified or interpreted by innumerable Royal Decrees and added to by orders of Spanish Military and Civil Governors issued in many instances with reference to special cases or emergencies; these in turn were supplemented by the orders of the Military Government established by the United States; complicated by a Constitution for a Republic which provided that the old aaws should continue in force until new ones were enacted by Congress; thereafter, the President of the Republic issued numerous decrees having the force and effect of legislative enactments and for the past year the Provisional Governor has exercised the legislative authority in numerous instances.
The Judges and Courts of countries where the laws are well adapted to conditions, every principle well established by years of harmonious legislation, every question of practice and procedure settled by innumerable decisions and practically all questions of law buttressed by precedent, would view with consternation a confusion such as the Cuban Courts are called upon to harmonize and reduce to consistency. That they have so well succeeded in this as to merit and receive the confidence and esteem of all Cuba is not only worthy of mention but establishes conclusively that the judicial faculty is to be found among the Cubans and that the functions of the Judicial branch of Government will be performed by Cubans equally as well as are performed the functions of that branch in other countries, and that the defects in the Judicial system are to be attributed to the Legislative and not the Judicial branch of Government.

The Constitution of Cuba was promulgated by military LEGISLATIVE BRANCH order on April 14, 1902, and went inOF GOVERNMENT. to effect on May 20th following, on
LEGISLATIVE NEEDS. which date a government under its
provisions was inaugurated. The Government under the Constitution is, in theory, one of three co-ordinate and independent Departm-ents-the legislative, executive and judicial-and in


this separation of governmental power is fundamentally opposed to the pre-existing government maintained by Spain, under which the executive branch exercised the legislative power and was given an effective intervention in the affairs of the judiciary. The Constitution established another important innovation in the grant it made of local self-government to the provinces and municipalities, being in this respect opposed to the pre-existing Spanish system, under which a very effective supervision and control over these subordinate governments was reserved to the Chief Executive.
To complete the transition from monarchical to republican government, legislative action upon a broad scale was urgently necessary. The most immediate necessity was new legislation to perfect the organization of the government under the Constitution, and for the enforcement of provisions of that instrument which were not in their nature self-executory, and would lie dormant for the lack of it. Next in order of importance was the revision of the existing laws regulating the public administration which were mainly of Spanish enactment, and reflected the highly centralized executive government which Spain had maintained in Cuba. The amendment of these latter laws was primarily necessary for the purpose of eliminating those provisions which gave executive officials an undue intervention in the affairs of the judiciary, and in the provincial and municipal administration. Of less urgency, but still of great importance, was the revision of the substantive laws in force at the time of the adoption of the Constitution, the greater number of which were laws of the Peninsula extended to Cuba during the decade following the close of the Ten-Y ear war. Many of the special laws of Spanish origin in force in Cuba had been enacted early in the preceding century, and the code law generally between 1870 and 1890. All this legislation required extensive revision directed toward the elimination of provisions dependent upon Spanish sovereignty and the union of Church and State, and its adaptation to the new conditions brought about by the introduction of republican government.
The First Congress elected under the Constitution of Cuba held a brief session early in the month of May, 1902, under the sanction of a military order, for the purpose of canvassing the electoral vote for Pesident and Vice-President. It re-assembled on the 20th of that month, contemporaneously with the inaug-


duration of the new government. Its life covered the period following until April 4, 1904, when the first biennial renovation of the Lower House became effective, and the Second Congress was organized. During the period of the First Congress the four regular sessions required by the Constitution (Article 57) were held. The first session covered the period from May 20 to October 20, 1902, the second from November 2, 1902, to March 17, 1903, the third from April 3 to July 18, 1903, and the fourth from November 2, 1903, to January 19, 1904. The period during which the First Congress was ostensibly in session aggregated 461 days, during which the Lower House held 198 daily sessions, and the Senate 213 sessions. The response which this Congress made to the urgent demands for legislations under the Constitution may be stated as follows:
1. Municipal Legislation: On July 5, 1902, Congress enacted a law relating to the municipal administration, the sole effect of which was to confirm and continue in office municipal alcaldes, councilmen and treasurers who were in office on June 30th prior thereto, and until such time as laws regulating municipal administration and government could be enacted. It was not, however, until the third session of the First Congress that a project of municipal -law was introduced in either branch of Congress. This project was finally passed by the Lower House and was transmitted to the Senate, which appears not to have acted thereon. No other attempts appear to have been made to enact municipal legislation.
2. Provincial Legislation: During the second session of the First Congress there was enacted and promulgated the Provincial Government Act of March 10, 1903, the defects of which were speedily revealed. It is now undergoing revision at the hands of the Advisory Commission.
3. National Legislation: During the first legislative term of the First Congress, a project of a "Law of Executive Departments" was considered and passed by the Senate (Septemher 2, 1902), and was subsequently passed by the House in an amended form. The bill then went to conference, where it was further amended. The conference report thereon was subsequently rejected in the Lower House, whereupon all efforts upon the part of either House to pass this particular law appear to have ceased. During the third legislative term of the First Congress the Senate again took up the consideration of


a law organizing the central Departments of Government, which it passed and sent to the Lower House, which failed to take action. This appears to have been the final attempt made by the First Congress to supply legislation of this character.
In other respects the attempt of the First Congress to supply legislation of a national character was more successful, it having passed, in addition to the Provincial Government Act of March 10, noted above, laws providing for the biennial renewal of the Lower House and for -the re-organization of the Rural Guard, a law of Cuban citizenship, an organic law of the Diplomatic and Consular Corps, a national loan law, a law of constitutionality, a law of Presidential succession, an electoral law, and, in addition, laws amending the notarial and customs tariff act in minor regards. Regulations governing the two Houses in the enactment of legislation were also adopted.
On February 28, 1904, the elections were held for the first biennial renewal of representatives. Those elected, with the hold-over representatives, constituted the Second Congress, which, under Article 57 of the Constitution, was required to convene on the first Monday of the following April. The National, now the Liberal Party, which was in the minority in both branches of Congress, contested the credentials issued to certain candidates as the result of the election of February 27. Availing itself of the provisions of the Constitution (Article 54), which required the presence of two-thirds of the total membership of each branch to open sessions and of the omission of the Constitution to provide means for compelling the attendance of members, the minority party was able to prevent a meeting of the Lower House on the day fixed by the Constitution, April 4. No session of that body was held until June 13, when a quorum of one-half plus one met and undertook to transact business. The next daily session of the Lower House was held on July 6, following. The first legislative term of this Congress lasted until October 20, a period of one hundred and ninety-nine days, during which the Lower House was, due to the obstructive tactics of the minority, able to hold but sixteen daily sessions. The Senate met on April 4, as required by the Constitution, and began to function in an irregular manner. Eight daily sessions were held during the month of April, three in the month of May, one in the month of June, and none throughout the month


of July. During the first legislative term the Senate held but twenty-six sessions.
This record of both Houses of Congress for infrequent and irregular sessions continued during the three remaining legislative terms of the Second Congress. The four legislative terms of this Congress aggregated six hundred and eighty-two days, and during this period the Lower House was in session but one hundred and eighteen days, and the Senate but eighty-seven days.
On December 1, 1905, there was held an election for the second biennial renewal of the Lower House. Due to the political majorities returned in that election, the minorities in both Houses ceased to be formidable, and the obstructive tactics they had employed during the period of the Second Congress could no longer be successfully utilized. The Third Congress met on the 2nd of April, 1906, and did not adjourn until the 30th of June ighty-nine days, during which period both Houses pursued their normal routine as to daily sessions.
During the period of the Second Congress little or no general legislation was attempted, and even the annual budgets failed of enactment. A few special laws were passed, generally carrying small appropriations, and one act amending the tariff law in a minor regard was enacted. The election disturbances of 1905 were undoubtedly the principal cause of the inactivity of both Houses during the final legislative term of this Congress. From November 15, 1905, to January 9, 1906, the Senate did not hold a single session. During the remainder of the month of January but seven sessions were held, and in February but three. On the day after the final adjournment of Congress, February 24, the attack on the headquarters of the Rural Guard at Guanabacoa took place, and this was followed by other disturbances which finally culminated in the uprising in August. It was doubtless because of this public agitation, which covered the whole period here in reference, that the Third Congress, which assembled on April 2, 1906, likewise failed to enact any important general legislation.
A review of the record of all three Congresses shows 259 acts of all kinds enacted, the general character of which is exhibited in the following table:


Amnesties . 6
Appropriations . 125 Creating offices and fixing salaries. 30
Exemption from customs duties. 23
Miscellaneous provisions. 18
Substantive laws . 35 Repealing acts . . . . 10
Transitory regulations . 12

Total . 259

In the 125 appropriation acts passed there are included but two annual budgets. Twenty-two were donations of public funds to private individuals. The most creditable showing under this head is to be found in the 44 acts carrying appropriations for public works, aggregating nearly $12,000,000.
The only act of any importance classed under the head of "Miscellaneous" is the one recognizing the validity of certain debts incurred by the Revolutionary Government prior to 1899. The general nature of the others may be inferred from one or two examples; the Act of August 29, 1905, validating academic titles conferred by Spanish universities, and the Act of June IS prescribing the formalities to be observed at the funeral of a general officer. But two of the repealing acts affected, even in a slight degree, the old Spanish law or method of administration, and these operated mainly to bring about donations from the State to individuals by waiver of obligations due.
Of the acts listed above as "Substantive Legislation", the more important are the Electoral Law, the Law relating to Armed Forces, the Provincial Law, all of which are now undergoing revision by the Provisional Government, and the Law of the Division of Communal Estates, which has already been revised. In three of the five years between 1902 and 1906, the national budget failed- of passage.
The failure of the Cuban Congress to make any adequate response to the urgent demands for legislation under the Constitution, and by way of revision of the existing laws, is to be attributed, in considerable degree, to the political dissensions and disturbances noted above. There is to be considered, also, as operating to the same end, the lack of experience of the Cuban people in legislative work. During the -four centuries of government wlich preceded the establishment of the Republic, the laws of Cuba were promulgated from Madrid, and the par-


ticipation of the Cuban people in their government was limited mainly to the administrative side. This lack of experience in legislative work has operated to a greater extent, I apprehend, than the political dissensions and disturbances above noted in defeating the legislation which was required for the organization and administration of the new government. That this failure of the Cuban Congress to legislate under the Constitution was a potent cause in bringing about the conditions which made the insurrection of 1906 possible, is sufficiently evidenced by the fact that nearly all the bases of settlement between the warring factions proposed during the period of deliberations which led up to the establishment of the Provisional Government, incorporated more or less urgent demands for legislation of this charracter, and particularly for legislation under the Constitution affecting municipal and judicial administration.
To meet this demand for legislative action, and in pursuance of the plan of the Peace Commission, on December 24, 1906, Decree No. 284 was issued, creating the Advisory Commission, to which I have above referred, and charging them with the duty of preparing projects of (1) an electoral law; (2) provincial and municipal laws; (3) an organic judiciary law; and (4) a civil service law. This legislative program has since been extended by me to include a law of executive departments for the organization of the national administration, an organic law of the armed forces, and a revision of certain designated portions of the Mortgage and Notarial Laws. As already stated, the Commission will shortly have ready for promulgation an electoral law, a judiciary law, and a municipal law, including the law of municipal taxation and accounting; and considerable progress has been made in the draft of a civil service law and law of executive departments. At the suggestion of the Advisory Commission, which, I think, represents a public demand, I shall soon convene a special commission for the revision of the Penal Code and the Code of Criminal Procedure.
The foregoing measures when enacted into laws will constitute a substantial and important advance in supplying the legislative needs of the Republic, but they must be supplemented by numerous other laws of equal, if not greater, importance before the existing emergency is met, or the necessities of the Republic met. There is nothing more indispensable to the establishment, stability and maintenance of the Republic of Cuba


than to do away with, or reform, the body of Monarchial laws inherited from Spanish dominion, and by reformation, or new enactment, provide a system of laws which will render the Constitution effective and are adapted to a Republican form of Government and the conditions of n1odern thought and business, political and social relations prevailing in Cuba.
The character andextent of this work is well stated by Colonel E. H. Crowder, U. S. A., Adviser to the Department of State and Justice, in his letter transmitting the report of the Department of State and Justice, to which letter attention is directed.
Since the inauguration of the Provisional Government, the necessity for numerous provisions of special application to administrative organization and details of government, as well as matters of finance, public order and protection of property rights, sanitation and police powers in general, has resulted in the issue of a number of executive and legislative decrees by the Provisional Governor. Those of a legislative character, modifying or superseding prior existing laws, may be briefly epitomized as follows:
1. Disbursement and Audit: Decree No. 8, October 8, 1906, provided additional laws and regulations governing disbursement and auditing of funds, and payment of -expenses of the Provisional Goverment on authority of orders of the Provisional Governor.
2. Prosecution of Soldiers, Sailors and Marines serving in Cuba for violation of Cuban laws: The exceptional and novel conditions of the service of the United States Army and Marine Corps in Cuba suggested the inadvisability of subjecting the members thereof to the criminal jurisdiction of the ordinary courts. Accordingly Decree No. 16, of October 11, 1906, was issued recognizing the jurisdiction of courts-martial for the trial of United States soldiers, sailors and marines for offenses against Cuban laws when such offenses were committed under circumstances prejudicial to the good order and discipline of these services, but providing that as to offenses against said laws committed by them under other circumstances jurisdiction should vest in Provisional Courts to be convened from time to time by the Provisional Governor, and to be composed of commissioned officers of the several branches of the services named. These Provisional Courts in imposing sentences are governed by


the Penal Code of Cuba. The ordinary courts of Cuba are divested of jurisdiction in the excepted cases, but the decree does not carry immunity from arrest by Cuban officials for crime and breaches of peace committed in their presence, or where a party is escaping from the scene of his illegal act.
Supplementary to this Decree another, 174 of July 12, 1907, was issued imposing penalties against those persons, not members of the services named, who failed or refused to comply with subpoenas of general courts-martial to appear and testify as witnesses; said penalties to be enforced by the local courts.
3. Claims: Decree No. 158, November 22, 1906, created a commission and prescribed methods of procedure for the investigation and adjustment of claims against the government arising out of the recent insurrection. The effective and systematic work of this Commission, elsewhere noted in this report, promises the early settlement of all these claims.
4. Amendment of Law of Charities: By Decree No. 452, April 23, 1907, a modification of the law respecting rights of guardians wid family councils over minor children is made, so far as these rights were applicable to destitute orphans under the care of the State.
These rights are transferred to the Secretary of the Board of Charities, and the reasons for such transfer seem obvious when considered in connection with the obligations of the State to these orphans.
5. Expropriation: Decree No. 595, May 22, 1907, extends the rights of expropriation or condemnation of property, as granted by Order No. 34 of 1902 to Railroads, in case of Public Works of the State, and prescribes the processes of condemnation proceedings by the State when requiring either private property or property of provinces and municipalities, not dedicated to a public use, for public purposes. It was made advisable by the many improvements and constructions of public works in progress and in contemplation.
6. Demarcation of Estates in Common: There are in the eastern provinces of Cuba many large unsurveyed estates held in common, the division of which has for a century been regarded as necessary for the public interests. From 1819 to 1902 the provision of the "Voto Consultivo", a resolution of the Audiencia of Puerto Principe, were applicable to their demarcation. After January 1, 1886, when the Code of Civil Procedure went


into effect, it was found that Art. 2069 of that Code was a menace to the final effectiveness of any such proceedings, and for this as well as other reasons the settlement of land titles came to a partial standstill near the close of the 19th century. In order to provide a clear and simple method for that class of proc feedings, Order No. 62 of 1902 was promulgated. Article 80 of the order repealed all other laws relative to the demarcation and division of rural estates, except such provisions of the Code of Civil Procedure as were not specifically amended.
There can be no doubt that the intention in promulgating that order was to provide a means for surveying and partitioning aill classes of rural estates. The preamble to the order in question indicates such intention; and the interpretation and application of the order by courts and litigants from 1902 to 1906 point in the same direction. The wording of several Articles, however, led the Supreme Court to hand down a decision limiting the estates which may be surveyed and divided, according to Order No. 62, to those which are circular in form, and at the same time originated either immediately or immediately in royal grants.
It was made to appear from the suggestions of interested parties that there were many estates in Cuba, still unsurveyed and undivided, in which these two requisites were not found. It further appeared that proceedings had been instituted under Order No. 62 for the survey and partition of estates not circular in form and not derived from grants; that this was done as a result of a Uberal construction of the order, and possibly by reason of the tacit consent of interested parties; that thousands of dollars had been expended in this class of litigation; and that the construction placed upon the order might result in a loss of all the time and money thus expended and remand the parties to the condition in which they found themselves in 1902, in that pending proceedings in which these defects were present might be annulled upon m ,ion to that -effect, and that even completed demarcations and partitions might be subject to attack. There arose a demand for an amendment to said Order 62, which would make the order applicable to all rural estates, and prevent, as far as possible, the undoing of nearly all that has been accomplished during the period the order had operated.
Accordingly Decree 566, of May 17, 1907, was issued, extending the provisions of said Order 62 to the partition of lands


belonging to tenants in common whatever might be the conditions of such tenancy in common and whether or not the titles to said lands proceeded from grants to the original owners, and providing further that no proceedings theretofore had in any case to which said Order 62 had been applied should be attacked, annulled, or declared invalid for failure to present a grant of the property in the question. The effects of the order have proven most beneficial. The time limits in which actions for partitions of the character herein reference may be brought and in which such actions may be completed have been extended in the Decree No. 1080, of November 9, 1907.
7. Sanitation: une of the most important questions presented to the Provisional Government was that of sanitation. The prevailing sanitary administration was one involving a division of control between the Nation and the Municipalities as to methods, disbursements and personnel. The national obligation of Cuba assumed by Article V of the appendix to the Constitution was such as to negative a divided administration and consequently a divided responsibility. In recognition of this, Decree No. 894, August 26, 1907, was promulgated, transferring the Administration. of Sanitation of all municipalities to national control. The cause and extent of this change and the work and accomplishments of this Department are more fully treated of in other parts of this report. By Decree No. 1127 of November 22, 1907, the Marine Quarantine Service was transferred from the Treasury Department to the Department of Sanitation.
In addition to decrees of the above character, ie., those modifying or superseding prior existing laws, various decrees of amendatory character were issued; among these may be mentioned:
Decree No. 58, series of 1906, temporarily amending the Railway Law in personnel of the Railway Commission, and provinding for final approval of its acts by the Provisional Governor.
Decree No. 66, series of 1907, amending the Customs reg, ulations by authorizing the Secretary of the Treasury to abate or refund duties on goods damaged or destroyed in the Customs warehouses.
Decree No. 773, series of 1907, amending the Consular tariff law by simplifying the manner of drafting manifests.
Decrees No. 901 and No. 1078, series of 1907, amending the


Customs regulations in the provisions for the entry and clearance of vessels.
Decree No. 746, series of 1907, permitting the slaughter of female cattle, and providing that female cattle imported pay the same duties as male cattle.
Decree No. 852, series of 1907, providing regulations for exempting from duty the personal effects of foreign diplomats.
Decrees No. 822, No. 839 and No. 1101, series of 1907, settling difficulties which had arisen in the interpretation of the customs tariff by fixiDg the duties on tar paper, cordage, braids for harness, and card-board.
Decree No. 401, series of 1907, simplifying the manner of making affidavit in petition to take advantage of the law remitting duties on encumbrances in favor of the State.
Decree No. 618, of 1907, approving and ratifying the convention of the Universal Postal Union signed at Rome, May 26 1906.
Decree No. 634, of 1907, providing the manner of registration of deaths and marriages during the Cuban revolution.
Decree No. 900, of 1907, relative to the issuing of certified copies of documents in the National Archives.
Decree No. 908, of 1907, regulating the leaves of absence of Registrars of Property.
Decree No. 1036, of 1907, amending the Civil Registry Law as to death certificates and burial permits.
Decree No. 1051, of 1907, relating to procedure for staying execution of judgements.
Decree No. 882, of 1907, permitting farriers to practice veterinary medicine in places there are no veterinarians.
Decree No. 182, of 1907, extending terms of present School ,Boards.
Decree No. 737, of 1907, amending the curriculum of the School of Sciences.
Decree No. 854, of 1907, regulating the Summer Normal Schools.

Shortly after I assumed the office of Provisional Governor, PURCHASE the matter of the purchase of certain Church
PROPERTY. property upon which an option was held by the State was brought to my attention, and in compliance with


a letter of the Secretary of War, I made an investigation of the options.
In the year 1842 the Spanish Government had confiscated a large aniount of property belonging to the Catholic Church, and though a part thereof was afterwards returned, a considerable portion was retained by the State and used for seenlar purpose. In 1899 when i the State appropriations for the clergy ceased, the Church laid claim to the property so retained, and commissions appointed by the Military Governor reported that the Church was rightfully entitled thereto. The Military Governor thereupon made contracts by which a part of the property was purchased outright, and options secured upon the remainder, with the obligation to pay an annual rental. The property upon which the options were so obtained was situated in the Provinces of Havana and Oriente. The Havana property consisted of the former convent of San Francisco, occupied by the Havana Customs House; the former University and Convent of Santo Domingo, occupied by the Havana High School; the edifice occupied by the Academy of Sciences, which was entirely rebuilt during the Military Government; and two smaller buildings-its retention being, urgently demanded by the public interests. The Santiago property consisted of a number of annuities and rural estates.
The option for the Havana property was entered into October 23, 1501, and was for five years, while the one for the Santiago property was entered into January 11, 1902, and was for the same period. These options were afterwards extended to June 30, 1907. The valuation of this property had been fixed in the contract, as well as the rental to be paid during the time the option was to run.
The purchase of this property by the Cuban Government had been called to the attention of the Cuban Congress by President Estrada Palma in his annual message of 1904, as well as in another message in April 1905, and a special message in November of the same year, but the Congress failed tG act.
Durin(r the consideration of this matter and because of several articles appearing in the daily press complaining that the contract price fixed for this property was greatly in excess of its value, steps were taken to have the property appraised by men having a knowledge of the value of real estate. The


general average of all the estimates submitted by the different parties fixed the valuation greater than that agreed upon between the Church authorities and General Wood.
An inquiry was made of the Church authorities as to whether an extension of the option and lease on the Havana property could be obtained in the event that the Government of Cuba should fail to purchase. the same before the termination of the option, but on account of other bids having been made, the Church authorities replied that it would not be practicable to extend the option further. The investigation included only the property in the diocese of Havana, and did not cover the property in the Archbishopric of Santiago. It was therefore agreed by the representatives of the Catholic Church that the option upon the Santiago property would be extended one year, but the contract with regard to the property in the diocese of Havana was carried out by the execution and delivery of a deed of transfer and the payment of money on July 12, 1907. Public sentiment approved of this action and all seemed pleased to know that this long-drawnout complication was finally terminated.
An examination of the property in the diocese of Santiago will be made before the termination of the option, but this investigation as to the extent, character and value of the property will involve much difficulty, due to the fact that a large number of small annuities and parcels of ground are involved, that many records of this property were destroyed during the Ten Years' War, and other records and documents disappeared at the close of the Spanish-American War and have not yet been located. It is also exceedingly difficult to ascertain facts respecting the property owned by the Church because the Archbishop of Santiago is now a very old man, feeble, almost blind, and is unable to offer any assistance in the matter, while many of the priests who possessed personal knowledge of this property are either dead or have been transferred from Cuba. An effort, however, will be made to secure as complete knowledge of this property as is possible under these eircumstances, and it is hoped that an agreement may be reached by which this much-discussed problem of Church property in Cuba may be brought to a satisfactory conclusion.


With the object of investigating and reporting on th5 APPOINTMENT OF CLAIMS numerous claims filed against the
COMMISSION FO0R AD- Government for damages caused JUSTMENT OF DAMAGES
CAUSED BY REVOLUTION by the insurgents in the uprising oF 1906. of last year, a Claims Commission
was organized by Decree No. 180 of November 27, 1906. The Commission, as at first constituted, was composed of Major Francis J. Kernan, General Staff Corps, U. S. Army, President; Mr. Manuel Landa, Judge of the Audiencia of Havana; and Captain Geo. W. Read, General Staff Corps, U. S. Army, Recorder. With the retirement of Major Kernan and the transfer of Judge Landa to be Acting Head of the Department of Justice, the Commission was reorganized by Decree No. 811 of July 24, 1907, Captain Read was appointed President, and Mr. Antonio del Valle y Duquesne, Deputy Fiscal of the Audiencia of Havana, and 2nd. Lieut. Aristides Moreno, 28th Infantry, U. S. Army, were appointed members. On August 14, 1907, by Decree No. 866, a number of assistants were appointed to make local investigations, as follows:

Captain James W. Furlow, 4th U. S. Infantry.
1st Lieut. J. K. Partello, 5th U. S. Infantry.
1st Lieut. V. La S. Rockwell, 11th U. S. Cavalry.
2nd Lieut. C. S. Donavin, 27th U. S. Infantry.
2nd Lieut. John E. Semmes, Jr., U. S. Marine Corps.
2nd Lieut. Charles F. B. Price, U. S. Marine Corps.
Captain Romdn Martin, Rural Guard of Cuba.
Captain Miguel Varona, Artillery Corps of Cuba.
Captain Ignacio Delgado, Rural Guard of Cuba.
1st Lieut. Francisco Ferndindez, Rural Guard of Cuba.
2nd. Lieut. Eugenio Dubois, Rural Guard of Cuba..
2nd Lieut. Agustin Rodriguez, Rural Guard of Cuba.
The Commission was confronted with an enormous amount of work, which it is doing thoroughly and well. It first turned its attention to the claims for horses and mules carried off by the insurgents. Of these claims there were 6,557 and the amount claimed was $653,027.20. The amount recommended by the Commission was $296,508.84. The number of claims for miscellaneous losses and damages was 8,194, of which 5,500 have been investigated. In these total amount claimed was $1,035,079.56, and the amount allowed by the Commission


$441,920.55. Of these 5,500 claims many were made by aliens; the following nationalities being represented: United States, Mexico, Spain, Germany, Great Britain, Italy, Arabia, Turkey, France, China and Colombia. The amount claimed by them was $436,413.98, and the amount approved by the Commission $179,330.55.
It will be seen that the Commission has made rapid progress. The total number of claims filed has been 14,751, of which 12,057 have been investigated and reported, leaving 2,694 pending. The total a-mount claimed in the 12,057 cases reported was $1,688,106.76; the total amount allowed by the Commission in these cases being $738,429.39. The total amount claimed in the 2,694 cases pending is approximately $2,250,000. The greater part of these claims have been locally investigated and depositions of witnesses taken. It is impossible to say how much will be required to settle the pending claims, but it is estimated that the amount will be not less than $900,000.

The direct cost to the National Treassury of Cuba of the COST OF THE Revolution of August 1906, is shown by the REVOLUTION
OF 1906. following tabulated statement. The total
amount, calculated to October 31, 1907, is $8,634,116.64.

(Calculated to October 31, 1907.)

Increase of Rural
Guard (2,150 men) Disbursements confrom August 1906 tinue under this October 31, 1907.
Pay . . . $ 649,822.51 Rations . . 287,460.54 Forage . . . 191,528.99
Uniforms and Miscellaneous Expensos . . 190,444.64 $1,319,256.68
Machine Gun Com- Disbursements conpany, August 1906 tinue under this item..
to October 31, 1907.
Pay . . . 30,397.15 Rations. . . 9,595.65 Forage . . . 2,547.18
Miscellaneous . 1,675.85 44,215.83



Militia Forces (about
11,000 men.)
Pay . . . 1,058,980.15
Maintenance, forage, equipment and miscellaneous . . . I 473,953.61 2,532,933.76

By rescission of one of the contracts for arms and ammunGuns and Ammunition. 776,977.81 ition, the Republic
has saved $19,040 of the amount comprised in this item. A number of these horses have been sold Horses purchased in at auction, the sales
Cuba and the United in the United States
States . . . 416,788.97 netting $18,168.86
and those in Cuba about $11,000. Over one-half of the horses purchased have died.
Saddles and harness. 43,681.54
Unif orms and dry
goods . . . 270,452.41
Fortifications . . 47,936.37
Remittances to government agents in provinces for fortifications, provisions, mil- The greater part of
itary supplies and this item was spent
miscellaneous. . 557,815.17 for blockhouses, barricades and other Two Coast Guard ves- I fortifications.
sels . . . . 102,267.50
Wireless telegraph stations . . . 163,000.00
Printing and supplies. 10,270.68
Secret expenses. . 51,107.60
Destruction of public
bridges and roads. 7,551.00
Value of claims pending for supplies furnished to government forces, etc. The total amount
(Estimated min- claimed is $55,503.93.
imum.) . . It is estimated that
the amount allowed will not fall below $33,300.
Amounts allowed to
(late by Claims Commission on claims
for damages caused Th, amount claimed
by insurgents. . 7381429.39 1 was $1,688,106.76.



Value of claims f or
damages by insurgents, pending in
Claims Commission. The total amount
(Estimated min- claimed is $2,250,000.
imum.) . . It is estimated that
9001000-00 the amount allowed will not fall below

Expenses of Claims $900,000.
Commission to October 31, 1907, except
railroad transportation . . . 11,807.98 IDisbursements conQuarters for U. S. tinue under this item.
Army of Pacification,
to October 31, 1907. 506,323.95 Disbursements conTOTAL COST, CALCU- tinue under this item.
1907 . . . . $8,634,116.64

To this sum most be added the cost of transportation and maintenance of the American forces in Cuba.
It is not feasible to estimate the indirect damage caused by the insurrection, such as the cheek of the investment of capital, the loss of credit, etc.

Contemporaneously with the establishment of the ProvARMY OF CUBAN isional Administration, the Army of CuPACIFICATION; ban Pacification, consisting of approximUNITED STATES
TROOPS. ately 6,000 men, under the command of
Brioadier General J. Franklin Bell, Chief of Staff, U. S. Army, was distributed throughout the island at the various centers of population, The prompt arrival of these troops at their stations gave confidence and encouragement and assisted in great measure the work of restoring order. While they were not called upon to perform any military operations other than the marches to their stations, their example and advice, when sought by the Cuban people, gave proof of their sincere desire to work for the rehabilitation. of the Republic. Fortunately, many officers of this army had served in Cuba during the first intervention and for them it was renewing old friendships and making new friends among those whom they had not met before. The distribution of troops at that time resulted in the establishment of several posts which have since been discontinued, and at present the army, numbering approximately 5,300 men, occupies 27 stations throughout the island.
Immediately after the troops were settled at their stations


they were engaged in making an accurate topographical survey of the different provinces, which has resulted in producing an excel-lent map of Cuba and in acquainting officers and men with all parts of Cuba and its people. This mingling of the officers and soldiers with the Cubans under such favorable circumstances has had a beneficial effect. They were received everywhere as friends and treated accordingly.
The officers of the Army of Cuban Pacification, especially of the Medical Department, have assisted materially in the work of sanitation, and their aid has been sought and their recommendations carried out by the local civil authorities. Their work has now been supplanted by the establishment of a national board of sanitation, under whose direction the sanitation of the island is being carried on, but its initiation and a great deal of necessary sanitary work was voluntarily performed by officers of the Army of Cuban Pacification.
The conduct of both officers and men of this Army has been most commendable. No serious conflict has occurred between the soldiers and Cubans. A few minor affairs resulting from the misconduct of enlisted men have been treated charitably by the Cuban people and no bad feeling has resulted. This exemplary conduct on the part of the American army among a strange people deserves the highest praise, and is due in great measure to the good advice and intense personal interest of its first commander, now Major General J. Franklin Bell, whose personal inspection of all military posts and whose earful explanation to officers and men of the requirements under the peculiar circumstances of their service, have borne excellent fruit. This good state of discipline has been continuous, both under command of the late General Theodore J. Wint, and its present commander, Brigadier General Thomas 11. Barry.
Reports from Rural Guard officers and Cuban citizens who have come in contact with the Army of Cuban Pacification are strong in their praise of its discipline and training. MaDy requests for detachments to be stationed at different parts of the island had to be disapproved to prevent too great a dispersion of troops.
The present high state of efficiency of this army, notwithstanding the large number of recruits recently received, reflects credit upon General Barry and the officers under his command.


The enlisted men of this Army are held in high esteem by their Cuban neighbors, and in general it may be said that by their good conduct and example they have maintained the high reputation of the best type of the American soldier.
My acknowledgement is due to the entire army, and especially to General Barry, whose prompt and active co-operation has facilitated in every way the administration of affairs in this island, and whose activity, zeal and constant attention to the needs of his command, have made it a power whose influence for peace and good order cannot be measured in words.
The only serious disturbance of the peace involving AmerCOLLISION BETWEEN icans and Cubans occurred at SanMUNICIPAL POLICE tiago de Cuba, on April 30th, 1907,
SEAMEN Or THE and was caused by a collision beU. S. S. I I TACOMA". tween the local police and seamen on shore leave from the U. S. Cruiser "Tacoma". Upon investioation it was learned that a number of seamen, somewhat intoxicated, were returning to the dock, at about 1.00 A. M., from a banquet at a caf6 in the City, accompanied by two civilians, one of whom proved to be a captain of police dressed in civilian clothes. One of the seamen attempted to take a sword cane from this captain of police and a quarrel ensued in wbi3h the police captain was struck and the cane taken from him. He then ran away, blew his whistb-, and is reported to have fired two revolver shots into the crowd of seamen, resulting, in seriously wounding one. The signal brought other policemen upon the scene and a general quarrel took place between the seamen and the local police, in which machetes, clubs kind revolvers were used by the police; the seamen making use of stones, bottles and other available objects. The result was that six seamen and one ensign were hurt; one of the seamen being severely wounded, while one police captain and two policemen received slight injuries. The affair was immediately investigated by the local authorities; the captain and the policemen were charged with exceeding their authority, and suspended. Their trial has been postponed awaiting report as to the result of the injuries received by the seamen and the response to letters rogatory sent to the United States. The Court is now In possession of the information and the trial will proceed ,v.,ithout delay.


The affair was probably caused by the intoxication of the American seamen, and the fear of the local police in an encounter with men much larger in stature and of greater bodily strength. While on the part of the police it may indicate an inclination of too free use of their weapons, it is to be explained by a lack of judgment on their part or a lack of more careful training. It does not appear in any of the reports that the American seamen used weapons of any kind, and the prompt action by the local authorities in suspending and holding for trial the policemen engaged in this quarrel shows a lively desire to preserve peace and harmony.

With the exception of a few cases of cattle stealing and BANDITS, AND forcible hold-ups in the country disTHE MASSO PARRA .
CONSPIRACY. tricts, Cuba has been singularly free
from any disturbance. Not a single band of marauders has appeared in the province of Pinar del Rio, Havana, Matanzas and CamagUey. Four prisoners in the jail at Bejucal, in Havana Province, broke jail and were at large for a week before being overhauled and this gave rise to a rumor that a band was out in Havana Province. With this exception there has been no recurrence of the "bandits" with which these provinces were heretofore annually molested. In Santa Clara Province, as also in Oriente, there have been three small bands during the past year, but all were quickly pursued by the Rural Guard who continued the chase until the marauders were taken into custody and placed in confinement.
Early in July rumors became prevalent of the arrival in Cuba of one Masso Parra, a Cuban by birth, who served the cause of the Cubans in the war of 1898, but who deserted early in 1898 and served the Spanish army until its evacuation from the island. Masso Parra arrived at Santiago de Cuba and soon after I received visits from men of prominence informing me of the danger he was to peace and good order, and advised that he be compelled to leave. I was further informed that he had come to Cuba during the administration of Major General Wood, and also during the administration of President Palma, but on both occasion was not allowed to land. He soon arrived in Havana, but with the exception of a few notices in the newspapers nothing was heard of him. In August information from private sources indicated that he was conspiring to


disturb the peace and order of the island. It was learned that he had recently come from Santo Domingo, where he had taken part in an attempted revolution which had failed, and at first it was brought that his attempts to secure a following here were for the purpose of disturbing the peace of Santo Domingo, but additional information being secured, it was evident that he was planning an insurrection in Cuba. lie had emissaries, who went from Havana to different parts of the island fomenting rebellion, and one of these agents proved to be Lara Afiret, a former officer in the Rural Guard.
Investigation of the actions of Masso Parra and his associates brought new evidence of their intentions. The public rumor that he was contemplating an early uprising gained much credence early in September. Nothing could be learned definitely in regard to the matter until about the middle of the month, when daily reports from secret police and other sources made it evident that some action would soon be attempted. This conspiracy took definite shape in the form of meetings, communications with men at different centers of population, and collections of arms and ammunition. About September 24th news brought by the secret service indicated that their plans were almost completed. The names of all the conspirators who worked with General Masso Parra were secured and an examination of all the data available, led to the conclusion that the whole movement was being directed by a few chosen spirits, under Masso Parra, while the rest were following blindly as tools, the orders of this revolutionist. Through the efforts of secret police the place of meeting of this revolutionary committee became known, and steps were taken to secure information as to all that passed in these meetings. It was learned that the meeting which took place on September 25th was to be the last one before the outbreak, and soon after this meeting was ended on the evening of the 25th, a full report of its proceedings was made to me. The report revealed the intention of the conspirators to have an armed uprising for the purpose of overthrowing the Provisional Government, and to more readily accomplish this, as the forces in the beginning would be small, it was determined to destroy bridges, burn the property of foreigners, and kill Americans. They relied upon securing enough dynamite from the public works in the various parts of the island to carry on the work


(,f destruction. These facts, obtained from reliable sources of information, rendered it imperative that some action be taken at once, and it was determined that the three leaders of the conspiracy should be arrested; hoping thereby to prevent disturbance. As the time set for the insurrection was September 27th, it was decided to arrest these men at once, and on the morning of September 26th the police were directed to arrest General Masso Parra, General Lara Miret, and General Juan Ducasse; charging them with conspiring against the Government. The examination of these men disclosed others equally culpable, and, by order of the examining magistrate, four others were arrested and placed in confinement.
The immediate effect of these arrests was most quieting. Rumors of disturbance ceased at once and the country relapsed into quietness; with no evidence of any intended insurrection in any part. Of these seven men General Ducasse was admitted to bail, and his case has since been dismissed on account of lack of evidence. The other six men arrested, namely, Masso Parra, Vicente G6mez, Gabriel Guerra Santos, Lara Miret, Manuel Vila Rodriguez, and Juan Bautista Martinez, alias "Habanero", are still in jail awaiting trial.
I believe this attempted conspiracy was brought about solely by the instrumentality of Masso Parra, whose life has been devoted to revolution. These conspirators have been placed at the disposition of the civil courts and their trials will take place early in December. This movement had no support whatever from the Cuban public and the few followers that were said to have been willing to trust to its fortunes were loud in their denials after the arrest of the leaders. The prompt arrest and confinement of those engaged in this conspiracy has given assurance that public order and peace in the island will he maintainedd, and the hearty support of the Cuban people to the suppression of such disturbances is evidence of their loyalty to the Government. Is is believed that the conviction and punishment of these men will be a salutary lesson for other restless spirits who regard as a privilege, an annual outing in the Cuban mountains when the spirit of lawlessness moves them.
Captain James A. Ryan, 15th U. S. Cavalry, detailed as military aide to the Provisional Governor, is entitled to special mention and commendation for his arduous and effective work in unearthing this conspiracy and securing the evidence neces-


sary to justify the action of the civil authorities. Through his efforts and his direction of the agencies placed at his disposal, the plans and personnel of this adventure were known to the Government from the beginning, and sufficient evidence was collected of overt acts of rebellion to make it unnecessary to NNait for the conspirators to take to the field or inflict injury upon persons or property.


The work of all the Executive Departments during the past EXECUTIVE year was greatly in excess of any previous
DEPARTMENTS. year. A full and complete exposition of their
services is set forth in reports of the Acting Secretaries transmitted with and made a part of this report. I have attempted to summarize these reports, but find these summaries fail to convey an adequate idea of the amount, character and importance of the work performed, or the excellence and care of the performance. I especially request careful and complete reading and consideration of these interesting and informing documents,
The plan adopted by the Peace Commission for the administration of these Departments was to confer the duties of the heads of the Departments upon the Chief Clerks. They have since been designated as Acting Secretaries. The plan included, also, the detail of an officer of the United States Army as Advisor to each Acting Secretary. The plan has worked to very good advantage and accomplished excellent results. The Acting Secretaries are as follows:

Department of State,
Justo Garcia V61ez.
Department of Justice,
Manuel Landa.
Department of Government,
Manuel Sobrado.
Department of Hacienda (Treasury),
Gabriel Garcia Echarte.
Department of Public Instruction,
Lincoln de Zayas.
Department of Public Works,
Diego Lombillo Clark.
Department of Agriculture, Industry and Commerce,
Francisco 1. Vild6sola.


The U. S. Army officers acting in an advisory capacity, are:

Department of State and Justice,
Colonel E. H. Crowder.
Department of Government,
Lieut. Colonel E. St. J. Greble.
Department of Public Works,
Lieut. Colonel W. M. Black.
Department of Sanitation,
Major J. R. Kean.
Commanding General, Armed Forces,
Major H. J. Slocum.
Department of Hacienda (Treasury),
Major J. D. Terrill, U. S. Treasury Dept.

The American advisors serve a good and useful purpose, with the ability and fidelity which we are accustomed to expect and secure from the officers of the United States Army.
The Acting Secretaries have each and all performed the duties of their offices with judgment, discretion, and fidelity to the principles of good government. Their task has been difflcult for, in addition to a great volume of varied services, they were required to readjust and reform the working of their Departments to accord with American ideas of administration, while the personnel were accustomed to an established routine considerably different.
In addition to the commendable work of the Heads of the Departments, services were rendered and administrative ability displayed by the heads of. the several sub-divisions into which the Departments were divided; two of them, at least, are entitled to special mention for meritorious service-Mr. Charles HernAndez, Director General of Posts and Telegraphs, and Mr. Saturnino Lastra, Collector of Customs for the Port of Havana.
When the Provisional Administration was established there were many and constant complaints as to the inadequacy and inefficiency of the Postal and Telegraph service. The cyclone of October 1906 practically -demolished the Government telegraph lines and greatly increased the public dissatisfaction. Mr. Hernindez was appointed Director of Posts and Telegraphs October 29, 1906, and immediately entered upon a vigorous and successful endeavor to restore, reform and improve the service. The beneficial results of his administration are shown in the re-


port of the Department of Government, and by the fact that no complaints respecting the service have reached this office for more than six months.
Under Mr. Lastra's administration of the Havana Customs House an increased volume of work has been efficiently handled and numerous improvements and reforms effected; among them, simplified manifests for ships, adoption of a rule permitting ships to signal inquiries for cargo without entering the port or payment of port charges, repeal of burdensome restrictions on the coastwise trade and shipping, reform in erroneous classifications of importations, adjustment of many long pending controversies with importers and the -establishment of a better feeling and footing between importers and the Customs officials.
I could extend the list of those whose commendable service is entitled to mention, indefinitely; and attention is called to this fact as -establishing that it is not at all difficult to secure Cubans well qualified to perform all services included in the Executive branch of the Government.

The administration of the Department of State and DEPA-RTmin or STATE Justice is set forth in detail in the
AND SUSTICE. reports of the Acting Heads of the
Sections of State and Justice, respectively. The more important features are the following:
Section of State: Upon the establishment of the ProviSiODal Government notice thereof was conveyed to all diplomatic and consular agents of Cuba, and they were confirmed in their offices. The maintenance of cordial relations with foreign representatives accredited to this Government has continued.
An extradition treaty has been consummated with the Dominican Republic, and the adhesion of the nation has been declared to various conventions of international character, as foltows: The convention concerning the law and customs of war on land, the adaptation of the Geneva Convention of 1864 to maritime warfare, and the convention for the peaceful settlement of international conflicts, which were signed at the Hague in 1899; the convention to improve the conditions of soldiers wounded in the armies in the field, signed at Geneva in 1864; the second international sanitary convention of the American Republics; the convention and protocol of the Universal P6stal


Union concluded at Rome, and regulations for the execution thereof; and the convention for the establishment of an International Institute of Aoriculture in Rome, signed June 7, 1906.
The Government has attended, through its delegates, international conferences, congresses and expositions, including the Second Peace Conference held at the Hague; the XIV International Congress of Hygiene and Demography at Berlin; the Congress of the National Prison Association, at Chicago; the Third International Sanitary Conference of the American Republics, at Mexico; and the Military and Naval Exposition at Hampton Roads, Virginia.
On assumption of office I directed a general inspection of all consulates of Cuba in Europe to be made, appointing for that purpose a Consul General as Inspector of Consuls. The results have been beneficial and are being made the basis of new regulations governing th,6 Consular service now being prepared in the Section of State.
Various extraditions have been requested of foreign governments which, as a rule, have been granted. The Government, on the other hand, has in general honored the request of other nations for extraditions.
The receipts in the consulates and legations of Cuba abroad under the Consular Tariff Law amounted to $385,000 during the period covered by this report, and collections for violations of the law amount to $6,421.22, making the total receipts $391,421.22. The total amount expended in diplomatic and consular service was $399,173.17, which shows a contribution to this Department from the National Treasury of less than $8,000.
Section of Justice: The Section of Justice has the supervision of Judicial Administration, Notarial Administration, Registrars of Property and registration of convicts, last wills and testaments, penal institutions and judicial statistics.
Opinions on questions of law requested by the Provisional Governor and Chief of other Executive Department are rendered by this section.
An adjunct to the Section is the Claims Commission created by Decree No. 158, November 22, 1906, to investigate and report on all claims against the Government arising out of the recent insurrection.