REPORT.

Habana is both the political and commercial capital of the island, and the greatest point of concentration of population and business interests.

It is the main port of entry and departure for passengers and freights, and its shipping movements and customs transactions far exceed those of all other ports combined.

The Department of Habana includes the municipality of Habana lying west and south of the bay, with a population of about 220,000, and the municipalities of Regla, Guanabacoa, and Santa Maria del Rosario, lying eastward from the harbor, with populations aggregating, within the department limits, about 30,000.

The total population is therefore about 250,000, within an area, between the Almendares River on the west and south and the Cojimar River on the east, of about 55 square miles.

This area is therefore partly a densely populated city, such as Habana and Regla; partly a less concentrated town population, such as Guanabacoa; partly suburban and partly rural.

The suburban and rural areas, as usual in the vicinity of large cities, are mainly devoted, when under cultivation, to pasture, forage crops, and market gardening, no cane or tobacco being raised.

The industrial, economic, and social conditions in the Department of Habana are therefore, widely different from those of the larger departments embracing entire provinces, in which the principal interests are agricultural and the like; whereas in this department general commercial interests predominate, and banking, importing, distributing, and shipping, with local shopkeeping and the innumerable requirements of a large centralized population, constitute the industries and occupations of the people. With the exception of the great tobacco establishments for making cigars and cigarettes, of which there are several, Habana is but to a limited extent a manufacturing city, although in Regla and Casa Blanca are machine shops of considerable importance.

In view of the census now in process of organization, and of which the results are to be recorded within two or three months, it is not assumed that full and definite particulars as to industries, occupations, and values are required for the purposes of this report. The census will furnish the detailed data on these subjects, and the custom-house records, which are not within my official purview, will give the specific and general movement of imports and exports and customs collections.

This report will therefore relate to such matters and considerations as may seem to give a general idea as to the results of the American occupation since January 1, and in seeking to do this in some intelligible manner there are two difficulties encountered at the outset, viz: First, the special status of Habana as the commercial emporium of the island, and, second, the peculiar conditions existing both in Habana and in the island at the beginning of the year.

Since Habana is the heart and center of movement, of which the island generally is the body and members, it results that the prosperity of Habana largely depends upon the vigor and life of the provinces; so that while a certain energy of movement and an apparent condition of activity could exist temporarily in the city, these could not be maintained and strengthened unless the provinces were thriving and their vitality deepening and expanding. A consideration, therefore, of the existing conditions and immediate prospects of the general interests of Cuba could alone be relied upon to form a judgment as to the real conditions, industrial and economic, existing in the metropolis and presently to develop either into an augmented vigor of investment and commercial uses of money or into a depression that should look to a general rehabilitation of industry and returns for its determinate and sustained prosperity.

The second difficulty above referred to is that commercially there can be no comparison properly between the circumstances at the beginning of the year and those of the present. The conditions existing in December and January last have been set forth in my annual report recently submitted, to which I beg to refer for considerable detailed information which would be of value in this connection.

There had been three years of warfare, the city had been blockaded for several months, it was heavily garrisoned by Spanish troops, and the civil governmental and administrative methods and requirements were, and for a long period had been, subordinated to military needs and purposes. All general business, investments, importe, even that of food, had been impracticable for the greater portion of the year. The Spanish in evacuating the city left it bankrupt and prostrate, with an empty treasury, the city administration a wreck, and the population perishing by wholesale.

The commonest and most imperative requirements of a city government were

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abandoned; to clean the streets, rescue the dying, even to bury the dead. The local machinery was broken and paralyzed, lacking essential parts, and even the initial power with which to get itself together. Within thirty days of the American control all this had been amended. No one was starving or abandoned; with nourishment came strength to work and work was given. The streets were cleaned, refuse removed, sanitary and hygienic laws and regulations enforced, the hospitals and charitable institutions equipped and put in operation, the ailing and homeless provided for, a complete city government of new material established and set in effective and economical running order; a police force-mounted for the rural area, and metropolitan for the citycreated, drilled, and put at work; financial affairs regulated, salaries and employments reduced, simplified, and organized. Everywhere cleanliness inculcated and enforced; honesty and disinterested service established as standards; investigations set on foot to study financial conditions, methods of collection and accounting, and means to augment revenue and diminish expense.

For the first time probably in its history Habana had an honest and efficient government, clean of bribery and peculation, with revenues honestly collected and faithfully and intelligently expended. And this with native material, men who had no previous experience in public administration, and relying for the results of their labors mainly upon their own integrity and intelligence, with the aid, advice, instruction, and encouragement of the American authorities.

These conditions have endured to the present, with constant betterments and no backward steps or lapses. It is true the city is still practically bankrupt, inasmuch as it has to obtain from the customs revenues large sums monthly for the engineering and sanitary work which is made imperative by the neglect of centuries, and in which not only Havana alone but the entire island and the United States as well are vitally interested.

The results are of record in the health statistics, of which the details are given in my annual report. A general death rate, already below the average, exclusive of the war period of frightful losses, and still falling rapidly until it has reached substantially the normal point of large cities in the United States.

A yellow-fever record unexampled for its low mortality in the history of a century, and with daily endeavor persistently and energetically directed toward the elimination of an endemic disorder that has made Habana a terror to other cities doing business with it. So that now Habana is taking precautions to protect itself against the importation of yellow fever from Gulf ports of the United States, as well as from other Cuban and Mexican ports.

There is no means of estimating how many thousands of lives have been saved during the period of the American occupation, partly by outright rescue with food and medicines, partly by giving work and employment to the destitute, and partly by the reduced death rate from improved hygienic and sanitary conditions affecting the entire population. And these conditions would in part at least remain even if the administration and control were to end at once. For it is probable that the most valuable result attained is the demonstration to a people quite uninstructed in such matters of the methods and principles according to which a proper civil administration must be conducted, and of the value of intelligence and integrity in public affairs as directly affecting their own lives and interests and those of their children. They are quick of apprehension, these people, and prompt to perceive in such matters what is to their material interest to observe. The initial impulse that has been given would continue for a long time and continue to bear fruit, even were the original force and energy withdrawn, if only it could be so arranged and ordered that the practical direction of affairs should be permanently and reliably vested in the serious and responsible elements of the community. In this contingency, however, lies the deep-seated peril of the political situation, upon which allother questions, economic, commercial, and administrative, ultimately depend. There is a great amount of illiteracy in the island, and there are likewise elements, even less trustworthy, who have individual interests to serve or certain political views to forward, which have no practical basis either in commercial prosperity or the stability of the insular government. It is the interests of the civilized world at large that must determine the future adjustment of these fundamental considerations and not the views or opinions of theorists or sentimentalists. With these excluded, and the disorderly and selfish elements suppressed, the task of establishing the industries of the island and maintaining a stable and orderly government would be the simplest possible, or otherwise be made impracticable.

It may therefore be held that, aside from commercial or industrial considerations merely, the object lesson given by the administrative and physical rehabilitation of Habana that has been effected within a few monthsconstitutes in fact an enormous moral force, the results of which are to a greater or less extent permanent and of incalculable value both in Cuba and elsewhere. Doubtless so intelligent a person as the educated Cuban has already absorbed this conviction and will adjust his views accordingly, unless dominated by other considerations than those that are essential to prosperity and order; and the Spanish population, whose sole interests lie in the direction of peace and security for life and property, will cordially indorse the serious Cuban view and throw the weight of their influence and means into the scale of good government.

In addition to moral and political considerations, there is an economic aspect of the work already effected. For example, what should be the estimated value to the island of Cuba only, of the conviction that by proper sanitation alone, rigorously and intelligently enforced, its principal port and the entire island can be converted into a territory or place of residence as safe to inhabit as any part of the United States, and how many more millions of dollars is the island therefore worth to-day than it was on January 1, 1899?

And what, on the other hand, is the value to the United States that a rich and fertile land, lying at its doors, should be demonstrated capable of redemption from its past status as a center of infection and source of tremendous commercial losses?

There is good reason to believe also that the work done under the American administration in Cuba has gone far toward solving the mystery of the habitat and spread of yellow fever, since apparently the street broom and the disinfection spraypump have attacked the enemy in his lair and paralyzed his activity and virulence of multiplication. Should this prove really to be the fact, as daily seems more probable, a demonstration of incalculable value has been made and the situation robbed of most of its terrors by proof of the practicability of controlling and, in the end, exterminating the evil by the simplest of remedial agencies.

Again, what shall be estimated as the actual value of the establishment of an orderly and effective government, the suppression of disorder, the safety of the person, the protection of property, the opening of communications, and the rendering of waste places accessible and habitable?

While conditions in these respects have not in the remoter regions been completely adjusted, an immense progress has been made and the principles firmly established that order will be enforced and violence punished and eradicated.

In Habana the rule of law is practically complete.

The rural districts are as quiet and orderly as in the interior of New England, and in the city, while the average population is as excitable and impulsive as any in the world, quick to take offense and prompt to lose self-control, the conditions in respect of safety and cleanliness are as satisfactory as in the best ordered community anywhere.

These facts must unquestionably be credited in great part to the measures adopted by the American administration; but in saying this it would be unjust not to credit the inhabitants themselves, Cuban and Spanish, with a willingness to fall in with the purposes of the administration and to further and cooperate with them rather than oppose and thwart, as would have been and was the feeling toward the Spanish Government.

It is perfectly correct to say that unless this cooperation and assent had been freely extended it would have been impossible to attain

the results that can now be stated as due to the American administration.

As to the details of commercial statistics, the situation is less clear. The American occupation was followed by an abnormal volume of imports due to the banking up of invoices awaiting anticipated changes in administration and charges, and a period of active movement ensued whose continuance will depend upon the extent to which the resources of the island can be developed and its ability to purchase augmented.

Undoubtedly large investments have been made and transfers of important interests been effected. English and American capital has purchased corporate rights and holdings, the Habana city railway and other concessionary rights, the Cienfuegos railway and Caibarien and the Sagua railways. Other acquisitions are under negotiation-sugar and tobacco plantations, mines, forests, and town sites. Machinery has been imported and preparations made for the future, which, however, must await developments for their returns.

The United States have made enormous issues of food and expended immense sums in public and private charities. The payments to the Cuban army and other investments have brought great sums of money into the island, but meanwhile the agricultural operations of the year have been to a great extent failures, due partly to the fact that the cane fields have not been replanted and partly to the hesitation of capital in embarking upon new enterprises until political conditions were rendered less uncertain and a clearer insight could be had into what should be the immediate and prospective future of the island from this standpoint.

Money is plenty, as is shown by the rate of interest at 6 per centor 7 per cent instead

of 10 per cent to 15 per cent, as formerly, and these conditions are likely to continue and financial movements be more or less hesitating and timid until some explicit conclusion is reached and announced as to the vital question of the future administration.

In a single respect have the results thus far attained in Habana fallen short of satisfactory adjustment. The vital question of primary education is still practically unsolved, and the great majority of the Habana children of school age are running wild in the streets, without instruction or discipline. If the charge of this matter, so essential to the immediate future of the island, were transferred to the municipality and the necessary funds advanced by the state to organize and equip a school system, the solution could be promptly attained and the primary education of the thousands of Habana children assured. For this purpose it would be essential to revise the strange and cumbrous Spanish.methods of organizing from the top downward, and to begin the construction of the educational establishment with proper foundations at the bottom, upon which the structure could then be erected with some assurance of stability and effectiveness.

The Spanish methods of teaching also require modification. The children were packed on narrow benches, kept there through the school day, and taught by rote. There was no objective teaching, no attempt to interest the children in their work or to exercise their mental faculties beyond that of memory. As a matter of fact, the average Cuban child is of rather remarkable brightness, great docility, and an unusual natural artistic faculty. What he needs is to be taught to think, to acquire the habit of reasoning rather than feeling, to substitute judgment for impulse, and to exercise mental self-restraint and physical self-control.

These remarks are applicable quite as well to the children of maturer age and to the Cuban citizen himself, but the reformation, if it is to be made, can only be worked out by regulating the training and discipline of the children of to-day, who in ten years will be the citizens of Cuba.

As to the economic and industrial conditions existing in the suburban and rural districts of this department, aside from what has been stated generally, I can not do better than forward as an appendix to this report that of the mayor of Guanabacoa, which he has prepared at my instance.

Mr. Hyatt is an American, but for a lifetime a business man and resident of Guanabacoa, with a Cuban family, and who had acted as an agent of the Red Cross during the darkest period of reconcentration, when the town was a graveyard.

Mr. Hyatt's intelligence, probity, and familiarity with local and Cuban affairs and the consideration he commanded among his townsfolk indicated his selection as alcalde as the best possible, and I appointed him, with most satisfactory results.

Mr. Hyatt's report indicates the nature of the suburban problem and the kind of work and reconstruction required as clearly as is needful, and the results attained by degrees are eminently satisfactory in respect of sanitation, rehabilitation, and general progress. The farming interests are gradually building up again, the people are at work, and the number of draft and other animals showing steady improvement.

The conditions of living are simple in this country. A livelihood at least is readily attained if the essentials of a patch of ground, a few tools, and seeds can be had, and a little aid rendered at the outset to those who are willing to earn their own living if given the opportunity. The people have learned to ask work instead of a pauperizing aid and tools in place of food, and, with the exception of a formidable residuum of helpless women and children, the able-bodied are at work and earning their own subsistence.

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Military Governor of Habana.

MUNICIPAL GOVERNMENT OF GUANABACOA.

AND AGRICULTURAL

(OMPARATIVE REVIEW OF THE ECONOMIC, INDUSTRIAL, SOCIAL,

STATUS JANUARY 1, 1899, TO AUGUST 1, 1899.

MUNICIPAL GOVERNMENT OF GUANABACOA,

Guanabacoa, August 30, 1899. GENERAL Ludlow:

To comply with your request of the 18th instant to formulate and submit a careful review in which the present condition of this municipality is compared with that existing on January 1 of this year, I will commence by showing its topographical location, size, divisions, etc., and furnishing other information that will contribute to giving an idea of its circumstances.

Guanabacoa is a municipality or termino in the province of Habana, and is the capital of the judicial district of that name. The last census showed a population of 23,999 inhabitants. It is bounded on the north by the Gulf of Mexico from the east mouth of the Cojimar River to the swamp of the Boca Ciega, on the south by the municipalities of Tapaste and Santa Maria del Rosario, and on the west by those of Habana and Regla.

This termino is divided into the following barrios or wards: (1) East Asuncion; (2) West Asuncion; (3) East San Francisco; (4) West San Francisco; (5) East Corral. falso; (6) West Corralfalso; (7) Cruz Verde; (8) Cojimar; (9) Campo Florido; (10) San Miguel del Padron; (11) Pepe and Antonio; and (12) Bacuranao.

The municipal government or ayuntamiento was perishing financially on January 1, and it would have become extinct had not the new régime bridged matters over by giving this corporate representative body of the people some credit and prestige.

On the 1st of January the ayuntamiento owed its employees $58,628.48 for salaries, and for charities, beneficence, lighting, carcel, public works, etc., $109,648.05.

During the years 1897 and 1898 it can positively be said that the only receipts were those produced by the tax on the consumption of cattle, amounting to about $28,000 annually, and destined to cover an estimated expenditure of $145,326.99. The old employees state that they received their salaries in small amounts, because this was the only use to which the receipts were put, while the other expenses of the municipal administration were added up in the “debt" entry, and the total amount kept on increasing every month.

Fortunately, so far this year matters have brightened up. The employees of all the branches have received their salaries, this month inclusive; all the other expenses incurred have also been punctually paid. In other words, the receipts and expenses this year have been as follows:

As to charitable institutions, there was only an old hospital here, whose financial condition was extremely deplorable. People afflicted with malaria and enteritis were barely nourished with a daily soup made with rice and whole beans. Articles so indispensable in a hospital as meat, eggs, and milk were never seen inside of this institution during the year 1898.

From February, 1899, to the present day, owing to the help of the ayuntamiento and of the Red Cross, and to the articles provided for by the military governor, the condition of the hospital is entirely normal; it has not incurred any debts up to this writing; the patients have not been in want of suitable nourishment, and the deaths, not in comparison with an asylum that sheltered 70 or 80 persons, but corresponding to a population of 25,000 souls

, have decreased until they are down to the proportion consistent with good sanitary conditions.

This hospital having gained such marked advantages, I have the satisfaction to know that an asylum for orphan children has now been started under your direction and it has 55 beds already. The original expenses of this institution were defrayed with money appropriated by you and with about a like amount contributed by the American people through my efforts. I consider the existence of the asylum assured on the basis of public charity and on the donation of the $7 per child, which I include in my estimated monthly deficit, and which you have so far allowed.

During the eight months of occupation that have transpired there is a visible improvement in commerce, as on January 1 the registry list of industry and commerce only added up 276 names, while to-day there are 327, an increase of 51 between industrials and merchants.