The agriculture, industry, and commerce of Cuba, like the public instruction, in the broader sense of the word, comes in for a meagre share of the small amount of the total budget, which seems to be reserved exclusively for expenditures for the benefit of the Home Government. The aggregate under the title of “Agriculture, Industry, and Commerce” is $108,178.52, the most of which is used in salaries and expenses for the secretary’s office, for which one-third of the total appropriation is expended. Under the head of “Local Fairs of Agricultural Industries,” $40,000 is appropriated. The forest lands seem to come in for some attention; at least $16,175 is expended for inspection under this head.
These form the chief items of expenditure for all purposes for the Island of Cuba. Perhaps it would be more accurate to say these are the estimates of the appropriations which the Secretary of the Treasury thought would be necessary to run the government on the present plan. It is only necessary to study these interesting tables in detail to see where a large amount of this expenditure can be reduced or abolished altogether. In doing this, however, it must be borne in mind that other expenses will be necessary in order satisfactorily and honestly to administer the affairs of Cuba in the interests of the people of the Island.
At this moment it is impossible to make a satisfactory estimate of the new budget, nor can it very well be done until after the United States authorities have been in full possession for at least twelve months, and are thus able to secure complete data as to the pressing needs of the Government of Cuba. Of course, the large items, such as interest on the public debt and expenditures of Spain for the purpose of conquering the Island will have disappeared, making a reduction, if we include the Civil Guards, of $18,000,000 or $20,000,000. To forecast how much of this amount will be required for immediate expenditures under the new order of things is impossible.
In recommending revenue laws for Cuba, the author was aided by the suggestions of Mr. Fran Figueras, who has given the subject intelligent consideration. To emphasise the importance of giving immediate attention to a careful division of the expenditures for the central government and the expenditures for local purposes (something the Spanish Government, in the whole history of its management of Cuba, has failed to do), the following is given from a statement made to the author by Mr. Figueras:
“The right to impose customs duties has a rational and just limit; it is determined by the legitimate needs of the Treasury. All in excess of these needs converts tax into an unjust, and therefore insupportable exaction. With due attention to these considerations and bearing in mind that the customs duties are the real source of revenue in the Island of Cuba, it is indispensable to determine the total amount of expenditure which this revenue must liquidate. If these expenditures are those used for public defence, central government administration of post-offices, justice, public works, education, and any other which it would not be advisable to turn over to the municipal or provincial governments, we may safely consider that six million to eight million dollars annually would be quite sufficient. This is the largest revenue the American Government should expect from the administration of customs duties in Cuba.”
Another statement well worth attention in this connection is that of Mr. Philip Pelaez, a former official of the Spanish Government in Cuba, who said to the author when in Havana:
“Neither in the administration of the islands, nor in the ministry of the colonies, are there any statistics with respect to the composition of the tariffs, and only a few data with regard to valuations. This is as much as can be stated precisely offhand concerning the said tariffs, an analysis of which, article by article, it would be very difficult to get, seeing that there are no statistics of the real importations. Even without asking these investigations, there remains for the Government of the United States the most interesting problem on the making of peace, with the cession of the two islands. Is free trade convenient? Is a simple tariff preferable? Would it not be more prudent to keep to the existing one? Free trade at the present time would impose the burden of the general expenses without any profit and with great dangers, the most immediate being the paralysation of business, the flight of existing capital, etc. The ad valorem tariff diminishes the receipts and gives advantages to a multitude of foreign articles. The tariffs now in force would, with a few changes, suit the islands and the United States for a long time to come.”
This sets forth substantially what has been done. The United States Government has made no violent fiscal changes in Cuba. Where the old laws and methods and customs could be fitted to the new order of things, they have been so fitted. The first and only radical change in the revenue system of Cuba is the speedy and absolute separation of local and general revenue. That which is local should be collected by local authorities and regarded as municipal revenue, to be expended for municipal purposes; while that which is general should be levied and collected by general authorities and expended for the general welfare of the Island. The general fund, after careful consultation with the governor of each province, should be apportioned geographically, and also into funds, such as the following:
a.—Maintenance of the general government, 20 per cent.
b.—Sanitary and other improvements, and loans to cities therefor, 10 per cent.