The following table gives the receipts for direct taxation that have been delivered for collection to the Spanish Bank of the Island of Cuba from the fiscal year 1895-96 to 1896-97, both inclusive, actual amounts collected, deductions, and receipts pending collection up to December 12, 1898, as per data at hand in the Spanish Bank:
| Fiscal Years. | Face Value. | Collected. | Deductions Pending for which Bank was not responsible. | Pending Collections. | Per cent. of face value uncollected. |
| 1895-96 | $ 4,802,936.66 | $3,460,998.24 | $ 579,002.52 | $ 762,935.90 | 15.88 |
| 1896-97 | 4,589,735.08 | 3,283,286.51 | 547,975.70 | 758,472.87 | 16.52 |
| 1897-98 | 4,341,112.87 | 2,250,806.74 | 223,119.47 | 1,867,186.66 | 43.01 |
| $13,733,784.61 | $8,995,091.49 | $1,350,097.69 | $3,388,595.43 |
This table and the one preceding it were prepared for the author by the governor of the Spanish Bank of the Island of Cuba and differ from the table prepared by the Spanish authorities which will be found in the chapter on the revenue of Cuba. In the report furnished by the officials, the face value of the tax receipts is given in one column and the actual amount collected in another, the third column showing, under the caption of “Total Delinquent Taxes,” the amounts uncollected, without any explanation as to why they were not collected. The governor of the Spanish Bank in the two tables given above includes a fourth column, namely, deductions for which the bank was not responsible. The bank authorities claim that the amounts represented in this column were receipts which were not valid, inasmuch as they were claims in many cases upon persons dead and upon property which had been destroyed by fire. The governor of the bank thinks it an injustice to the bank to add these under the general head of delinquent taxes, without this explanation.
It is easy to enforce and collect the customs duties; but the collection of internal revenue taxes is a much more difficult matter. The United States authorities found, on coming into possession of the Island of Cuba, January 1st, that all the receipts of taxes for the present fiscal year were in the hands of the Spanish Bank of the Island of Cuba; that this institution had not only six or seven branch banks in various parts of the Island, but also in the neighbourhood of 258 sub-district or collecting agencies. The bank assumed all the responsibility of these agencies, and it was decided to place in its hands for the present fiscal year this work, for the reason that it had all the machinery and there would be no loss in revenue. An agreement was entered into between the Spanish Bank of the Island of Cuba and the United States military authorities, and an order issued from Washington to the bank to make the collection, but the arrangement engendered such opposition among the Cubans that the order was revoked and the work was placed entirely in the hands of the American authorities under General Brooke.
CHAPTER XIV
PAYMENT OF INSURGENT SOLDIERS
THE question of the payment of insurgent soldiers and of certain legitimate indebtedness incurred by the insurgent government has an important bearing upon the civil, if not the industrial reconstruction of the Island of Cuba. This matter was referred to a commission of Cuban officers, consisting of General Garcia, General José Miguel Gomez, Colonel Manuel Sanguily, Colonel José Ramon Villalon, Dr. José Gonzales Lanuza, Señor Gonzalo de Quesada, and Mr. Horatio S. Rubens, who acted as interpreter. This commission came to Washington in November for the purpose of aiding in the pacification of the people of Cuba. General Garcia unhappily was taken ill of pneumonia and died. This delayed the work somewhat and took from the commission one of its strongest members. The commission had several informal interviews with the President, the members of the Cabinet, and finally with the author, who, as Special Commissioner for the United States to Cuba, took the testimony of these gentlemen and prepared a report on the subject for the consideration of the President and Secretary of the Treasury. The substance of this report is of permanent public interest, as it was the first official step towards the settlement of a question that must be adjusted before the entire Cuban army will disband and go to work. It also has considerable bearing upon the industrial future of Cuba.
The gentlemen comprising this commission were briefly informed by the author as to the work committed to him, namely, an inquiry into the economic condition of the Island of Cuba and the recommendation of such measures for the commercial and industrial reconstruction of that country as might appear advisable after impartially consulting all interests. They were told that so far as the United States was concerned, Cuba had won her economic and industrial freedom. That the work had been performed with scrupulous regard to the interest of the people of Cuba. That the aim had been the rehabilitation of its industries and the building up of the country generally with as little friction as possible. That in accordance with instructions received from both the President and Secretary of the Treasury the tariff of Cuba had been framed so that there should be no discrimination in favour of the United States, and that the same tariff laws would be applied alike to all countries, so that Cuba was now free to purchase her supplies in the world’s markets wherever they were best and cheapest, and not compelled to buy in a dear market, as under Spanish rule. They were furthermore informed that hereafter the revenues of the country were to be used exclusively for the economical and honest government of the Island and that the largest portion would not be drained away to pay the enormous interest charged (aggregating $10,500,000) upon an indebtedness which had unrighteously been saddled upon a people already bowed down under the double yoke of war and debt. Lastly they were asked to state fully and frankly, as citizens of Cuba, their views on any subject bearing upon the reconstruction of Cuba.
In reply, these gentlemen said, in substance, that they were entirely satisfied with the course the Government of the United States had pursued in relation to these economic questions, and realised the fact that Cuba had become free, commercially and industrially. They then proceeded to discuss the important problem of how the existing transitory condition of the Island could best be changed to a permanent civil life, without friction in Cuba or trouble and annoyance throughout the United States. Their purpose, they avowed, was simply to co-operate with the United States toward the restoration of order, without which, in their opinion, there could be no reconstruction of industries and no return of prosperity. Their purpose was, they assured the author, to advise with the people of the United States, to the end that everything might be harmonious and that the people of Cuba might get to work as soon as possible.
Speaking for all the gentlemen above named, Colonel José R. Villalon said:
“The discharge of the army of Cuba is a very complex and difficult problem. It has to be done for humanity’s sake, in one sense; those men who have been working and suffering have to be remunerated in some way. But that is not the only point of view. We have got to look towards the maintaining of order and we have got to give them compensation or gratification or a certain amount of money with which they can go back to their homes and their agricultural labours. In doing that we have a duty to our country so far as the Cubans are concerned, but, at the same time, it seems to me that it is a high political measure on the part of the United States to prevent now what would afterwards be very difficult to suppress. If we scatter these 30,000 men (approximately) throughout the country without any resources whatever—men who for the last two or three years have been accustomed to live upon the resources of the country or forage on the enemy and who are used to the hardships of the campaign—it will not be very difficult to foresee that in spite of the good nature and good disposition of the people these men will be forced to do what they do not wish to do by their nature. If the men are left as they are, with their present needs unsupplied, they will go to the woods and will be a source of disorder and brigandage, which will be very difficult for the United States to suppress; and for the sake possibly of saving a few million dollars now the nation will be obliged afterwards to spend many more millions, in addition to the sacrifice of many lives. It is an economic question. Unless something is done to relieve their needs the disorder of the Island will be prolonged indefinitely. As an example, I would call attention to the case of your Indians in this country, who now and then break away. In Cuba the condition will be worse, for there they would have the shelter of the woods, and besides the Americans would not be able to stand the climate as well as they stand their own. Ultimately, of course, they will succumb, but it will be at the cost of a great many lives and a great many millions of dollars.