will, doubtless, be some changes in the present tax law made. In this connection, it is well to know that planters and small farmers in the tobacco growing districts are rapidly recovering from their forlorn_condition. The quick growing crop and the remunerative prices have enabled them to restore, in a measure, the lost cattle, mules, and implements necessary to the farmers. There is, also, a desire to use laborsaving devices, which are now being slowly introduced.

In the cane-growing districts the progress is slower. The large capital necessary to the economical production of cane sugar precludes the small farmer from entering this field, at present at least, though it is possible that in the future small farmers will grow sugar cane in those sections where the soil is favorable and sell it to the "centrals." The quick returns from the tobacco and food crops will, it is believed, deter many from entering upon cane growing. As soon as the favorable sites for fruit growing are occupied there will be found large profits in the foreign trade produced from this source. The drought which has prevailed this summer has been a sad drawback to the people. Their small crops have largely failed. The cane crop has been affected by it, particularly in the new cane, which has, it is reported, not been successful. Within a few days past there have been rains, but not in all parts. Those parts where the rains fell have been much benefited, though they came too late to save the early crops of corn and vegetables, but it is now thought the winter crops give promise for an abundance.

The expected advent of the rainy season in May prevented the commencement of work on the repair of roads and bridges, it being deemed better to wait until later. Some of the roads have been repaired-the macadamized highways and some of the country roads near the coast west of Habana; surveys have been commenced on other roads and are still in progress, and, it is hoped, these will be in condition to move the crops when they are ready for market.

The collection, care of, and uses to which the revenues of Cuba, derived from customs, are treated in the reports of General Chaffee, the chief of staff; Colonel Bliss, the collector, and Major Ladd, the treasurer.

General Chaffee was placed in charge of the details of the uses to which the revenues were applied, and his report shows in extenso the working out of the problem of the public funds, and the reports of the department commanders recite the benefits derived from this expenditure.

In the reports of the commanders of the various departments of the division on civil affairs it is recommended that their reports, forwarded direct to the Adjutant-General, copies of which were appended to the military report from these headquarters, be considered also. In this way a full understanding of the affairs treated in both reports can be obtained. In these reports it will be found that opinion differs as to what should have been done, and it is undoubtedly true that the conditions differed somewhat in each command. An effort was made to obtain some concert of action and the department commanders were assembled at division headquarters on June 1 to confer with the division commander and with one another. Unfortunately, the conference was without result. The differences were irreconcilable. The division commander was obliged to take such action as the conditions in each department seemed to demand and the finances permitted. In carrying out this purpose it was necessary to exact compliance with the

necessary regulations and the greatest economy as well. In the matter of sanitation a wide latitude was permitted, but in other matters it has been, and is now, most imperatively necessary to reduce the large amounts of money which have been heretofore allotted. The reasons for this are well known to the authorities and it is not necessary to revert to them here. It is believed that the revenues have been properly applied and in the best possible manner. Much has been accomplished in a sanitary way, much suffering has been relieved, many sick taken care of, and, at this time, asylums and hospitals are being supported from these revenues to the full extent of the needs, so far as I am informed.

In the way of systematic and concurrent action by the commanding generals of departments attention is invited to the letters addressed to them on the subjects of food supply, care of the sick, furnishing medicines, etc., and to their relation to the conduct of civil affairs. Copies of the orders modifying or changing the laws are also appended; the orders appointing civil officials are included in these.

Many requests have been made by the planters and farmers to be assisted in the way of supplying cattle, farming implements, and money; the latter to enable them to restore their houses. The matter has been most carefully considered and the conclusion reached that aid could not be given in this direction. The limit has been reached in other means of assistance to the verge of encouraging or inducing pauperism, and to destroy the self-respect of the people by this system of paternalism is thought to be a most dangerous implanting of a spirit alien to a free people, and which would, in carrying it out, tend to create trouble by arousing a feeling of jealousy in those who would not receive such aid. It should be understood that the full amount of the revenues would not be sufficient to meet all demands of this kind, even were this the only objection to the scheme. The real solution of this question of furnishing means to those who need this kind of aid is through the medium of banks, agricultural or others; through them and through them alone, it is believed, the means now sought from the public treasury should be obtained. In this system of loans, which can be under the scrutiny of the banks or associations from which loans are secured, lies the only apparent solution of this much talked of source of assistance. This system would not destroy or impair the self-respect of the borrower; he would not be the recipient of charity, but a self-respecting citizen working out his own financial salvation by means of his own labor and brain. From information on the subject, it is believed that there is enough capital lying idle in Cuba to-day to supply all that is needed, were the capitalists assured as to the future. The scheme of those who urge this system of assistance to agriculturists by the use of the revenues of the island is that, as appears in the papers submitted, very cumbersome and expensive governmental and other machinery must be organized to carry it out. It is believed that the workers of farms will have obtained through other and more satisfactory channels the assistance needed before this system could be put to work. One feature of this particular scheme is that it will require five years to work it out, possibly more.

A scheme to create an association or bank, which desired to have the incentive of the exclusive right to make such loans in Cuba, could not, of course, be granted, and, as the scheme was based on this monopoly, the projectors withdrew it when they found that no monopoly could be obtained.

Personal applications have been received from people who are the owners of large estates for assistance in the way of loans, cattle, and implements, the interest to be nominal and payment to be made at a time beyond that indicated in the matter of extending the time for the collection of mortgages, viz, two years. Another feature, which has a vital bearing on this matter, is that the revenues of the island are about $1,163,000 per month, and out of this there is an expenditure of about $917,000 per month, without considering the necessity, now becoming imperative, for the improvement of harbors, building docks, repairing roads, etc. It is well to state here that the receipts of cattle to June 30 were 187,138; July 1 to October 1, 100,997. It is fair to assume that the greater number of these are work cattle.

In fact, the era of prosperity appears to be at hand; all that is needed is to have capital satisfied as to the future conditions, and this being reasonably assured, there can be no doubt but that the fertility of the soil and the industry of the people will work out a happy solution of the problem.

I wish to call particular attention to the statistics accompanying General Chaffee's report, in which can be found, grouped in a manner easily understood, the financial operations of this military government; also certain statistics relating to the affairs of the municipalities which present their conditions as told by the mayors, and which show, in the districts from which intelligent reports have been made, that the United States flag is an actual "advance agent of prosperity." In fact, the rehabilitation of the island requires a reasonable time to recover from a condition similar to that presented by the country between Washington and Richmond in 1865.

The report of Colonel Bliss shows how well the collection of customs in Cuba has been done. The amount received and the continuation of the monthly average of receipts certainly show that there is a demand which continues and which evidences an increasing prosperity, to which only can this condition be ascribed.

The cost of collection is a fair indication of the careful supervision of the customs service. At least one light draft steamer, suitable for these waters, should be added to the collector's equipment. Complaints of depredations on the fishermen living on the keys are made and of invasion of the reserved fishing rights of Cubans by outsiders, which might be prevented if a vessel of this class could be supplied.

The report of the treasurer and auditor necessarily ends with the last fiscal year. The work of this officer has been performed in the best possible manner; the accounts have been arranged by him, and it is thought his system has proved to be most successful, though the auditor's work has not yet been completed. The confusion which prevailed during the early days of the occupation of Cuba by the Army of the United States, and the want of training in the way of keeping accounts according to the army methods, made the work of the officers assigned to duty as disbursing officers of the Cuban revenues very difficult for them. Of one thing we may be assured, that the money intrusted to them has been honestly disbursed, even though the technical accounts may have some irregular features. I can not too highly commend Major Ladd's zeal and ability.

The constant and able work of Major Dudley, judge-advocate, has been of great service to the military governor, relieving him of a great amount of research and the necessary and comprehensive deductions. The ability of this officer in matters of law was recognized by the War Department when he was transferred from his own department to that

of the judge-advocate-general. His report will show the extent and value of his constant labor.

The quiet severance of church and state has been effected by the fact of the Government of the United States being in control. Certain changes have already been made in the laws, and others will follow in due course; this without violating the legal rights of the Roman Catholic Church, which was the only religious denomination tolerated in the island, except a small body of Baptists.

The important subject of schools is now approaching a solution. The present system will be improved upon, but it will require time to develop fully a good school system throughout the island. There are no schoolhouses, and under present conditions there can be none built for some time to come. It is hoped that a manual training school will be opened as soon as certain repairs and changes can be made in the Spanish barracks at Santiago de las Vegas, a short distance south of Habana, in which about 600 of both sexes can receive instruction at one time. This form of instruction is more important, under the conditions found to exist, than the ordinary instruction given in the other schools. As conditions improve, an opportunity can be given to increase the number of these schools, and by their means introduce modern methods more rapidly than by other systems.

The island has been remarkably free from yellow fever this season, the outbreak at Santiago being the only serious occurrence. At Puerto Principe there have been a number of cases, but it could not be termed epidemic. In Habana there have been a number of cases, but in comparison with past records, it may be considered that this city has had very few cases. Every effort has been made in the way of sanitation to prevent its occurrence, or if it came to stamp it out by vigorous measures of isolation and thorough disinfection. The duration of the dangerous season is supposed to include October and possibly November, but it is certain that cases occur at all times of the year and in most unexpected places. One of the possible remedies for the existing endemic conditions would seem to be a complete system of sewerage, which will be very expensive, owing to the difficulties attending the proper disposition of the sewage, and the reconstruction also of nearly all the dwellings. These remarks apply, in a sense, to all the towns in Cuba, differing only in so far as topographical and water-supply conditions affect various localities.

The recent occurrences in Habana show a bitter feeling against the Spanish population. This feeling appears to be general throughout the island, but has not had such open and pronounced expression as in this city. This indicates clearly that time alone can heal the animosities which exist as a result of war and what preceded war.

The kind of government to be established, and when, is not a subject which the military governor believes to be a matter which can be discussed in this report, if at all. Obviously, this must be determined by higher authority, to whom such matters properly pertain.

It is, however, proper to say that the people of Cuba will do well to refrain from political agitations, devoting themselves to the material matters in the redemption of their island from the ravages of war, and the building up of agricultural, mineral, and other resources, which will make a rich and prosperous people, who can then, by means of the experience gained during their apprenticeship, hope to meet the prob lems of the day with some hope of a happy realization of their dream of freedom. The way may be long and difficult, but the overcoming of these difficulties will depend upon the people themselves.

CUBAN ARMY.

Mr. Robert P. Porter arrived at Habana on or about January 30, with letters from the Secretary of War, which explained the object of his visit and indicated the desire of the President that Mr. Porter be aided in carrying out the purpose of his coming. After a conference with the military governor, in which the purpose of his visit was fully made known, arrangements were hastily made for the journey to his destination. At Mr. Porter's request, an officer of the military governor's staff, Capt. J. A. Campbell, was directed to accompany him. On his return Mr. Porter announced the success of his mission and left almost immediately for Washington. A note to General Gomez was taken to him by Mr. Porter, in which the General was cordially invited to come to Habana and confer with the military governor as to the distribution of the $3,000,000 which had been allotted for the purpose of aiding the soldiers of the Cuban army to return to their homes, and, so far as was possible, to enable them to reestablish their homes and resume their vocations. General Gomez replied, saying that he would proceed to Habana at an early day and that he would do all in his power to accomplish the purpose.

General Gomez reached Habana late in February, and after several conferences with the military governor, a plan was determined upon to distribute the money among the Cuban soldiery. The money in the meantime arrived, was placed on an Army transport, and safe guarded by a strong detachment of United States infantry.

The Cuban army assembly was in session during this time and developed a strong opposition to General Gomez, which delayed the preparation of the rolls of the various bodies of troops. Finally, the assembly deposed General Gomez by abolishing the grade he occupied. This created a serious delay, as the data on which to base the rolls was under its control and could not be obtained. The military governor continued to recognize General Gomez as the representative of the Cuban army. The plan determined upon was to give to each officer and soldier $100, but when the rolls were obtained it was found that they gave the number of officers and men as 48,000. All attempts to ascertain if this number was not excessive proved unavailing, and it was then determined to omit the officers and such of the soldiers who had been employed under the military government as rural police, clerks, mechanics, or in any other lucrative employment. This reduced the number below 40,000. The amount to be given to each man was $75. The procedure agreed upon for the detail of the distribution was that the money would be disbursed by paymasters or other officers of the United States Army, and that a commission, having charge of each party going out to make the distribution, consisting of one officer of the United States Army and two officers of the Cuban army, should be selected by the military governor and General Gomez; that their names should be announced in an order issued by the military governor, and that the different parties would be assigned to certain districts in which certain designated corps of the Cuban army were to be found. When all was ready it was found that the Cuban commissioners declined to serve and the distribution was made without their aid. The rolls were not obtained until after the dissolution of the assembly, which had continued in session for a long time, considering the propositions received by them for the creation of a loan of a large amount of money with which, it was stated, it expected to make some