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 dis cussed 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 gov ernor'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 gov. ernor, 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

partial payment of the debt due the Cuban army. This project fell through finally, and the assembly dissolved.

In the distribution of the money to the Cuban army great difficulties were encountered in identifying the men. Many of the men whose names appeared on the rolls could not be found, and many were found who seemed to possess evidences of service and whose names were not on the rolls. These could not receive any money, and much dissatisfaction was caused, there being no possible basis for the disbursements but the rolls, which were, on the face of them, authentic.

It was also agreed that if any money was left after all on the rolls had received their distributive share certain maimed and destitute officers should receive a share of this money. General Gomez was requested to ascertain whom these officers were and furnish a list of them, with their residences, so that they could be reached, but he did not think he could do so. The General was reminded several times that this list had not been received, that the close of the distribution was at hand, and finally he was informed that the work would cease on a certain date and the balance on hand would be returned to the Treasury of the United States. The money was returned on the date specified and the officers did not receive any money.

During the course of this distribution some badly wounded and necessitous officers were known to receive from the men liberal contributions which were voluntarily made; also that some widows received assistance in the same way.

The conferences with General Gomez were, principally, verbal and only such memoranda were kept as would enable an intelligent carrying out of the arrangements agreed upon. The amount of labor given to this matter and the time consumed was out of all proportion to the work in hand, but the interference by the assembly was largely the cause of the delay. All the expenses attendant on this distribution have been paid from the revenues of the island.

During the time occupied in the distribution of the money a force of clerks, under the direction of General Roloff, inspector general of the Cuban army, was employed in preparing certificates of discharge, a statement of service, and amount due to each officer and soldier, the expenses of which were paid from the customs revenues. These papers are to be distributed to those to whom they pertain. The manner of doing this has not yet been determined upon.

SECRETARY OF STATE AND GOVERNMENT.

Attention is invited to the report of the secretary of state and government, stated in which will be found the duties of this department and its important connection with the various branches of the government in the provinces.

It will be seen that steps are being taken to establish municipalities on a proper basis, they being the foundation of the governmental structure, granting all necessary powers which may be required in addition. to those they now possess under the law to enable them to conduct their affairs along the lines which all free governments find to be essential to the proper maintenance of liberty. In this matter the first steps, the reorganizing of the municipal governments under existing law as to their personnel, have been taken, with the exception that the principal officials have been appointed by the military governor and the members of councils by the civil governor, in both of which the WAR 99-VOL 1, PT 6- -2

wishes of the people were, as far as possible, ascertained and recognized. In some instances there were good and sufficient reasons for not appointing certain candidates. In most cases the commanding generals of departments were asked to report upon the candidates under consideration.

The statistical matter which is embraced in this report is very interesting and gives remarkable information, which will open the way to a knowledge of the conditions in Cuba not otherwise so well portrayed. The institutions which come under the care of this department are those over which governments usually exercise an absolute or supervisory control.

SECRETARY OF FINANCE.

In the report of the secretary of finance there will be found an exhaustive review of the condition of this department, which it is recommended be most carefully considered. It gives a clear insight into the operations of the department under the existing conditions and the restrictions placed upon it without any change being made in the law.

In the proclamation of January 1 last the laws in effect on December 31, 1898, were continued in force until they should be modified or changed. The order of the President establishing the customs service in Cuba was issued December 9, 1898, and the laws regarding the collection and control of the customs revenues, in so far as this branch of the finance department was concerned, were therefore changed by the President. The same order fixed and regulated the coasting trade. Notwithstanding those facts, I would ask for the remarks of the secretary of finance that consideration, from their being undoubtedly an expression of the views on this subject of a great many prominent and able residents and natives of Cuba, the gravity of the matter demands. In this report will be found most interesting information as to the lands, mines, forests, and other resources of Cuba, and in which will be found also reference to the laws on those subjects.

It is thought some action in the line of the suggestions of the secretary can be taken by the military governor which will enable him to have a complete statistical knowledge of the whole financial conditions.

SECRETARY OF JUSTICE AND PUBLIC INSTRUCTION.

In the reorganization of the departments of government, made by the order of January 11, 1899, the department of justice and public instruc tion was constituted. That portion of the former department of grace, justice, and government relating to government was separated from it and transferred to the department of state, while the department of public instruction, which had hitherto been a distinct and separate department, was added to the department of justice.

As a result of this reorganization there has been a more economical administration of affairs secured than existed under the old régime. A large reduction in expenses was made in his department by the secretary of justice and public instruction, as may be seen in his report.

The work of this secretary has been transacted under many difficulties, due to the difference of language used by the governing power and by the people, and the necessity, therefore, for translation of all papers coming before the department from English to Spanish, or vice versa; and also of all orders issued affecting the administration of the laws,