Finances.-The following table, prepared by the Division of Insular Affairs of the War Department, shows the revenues and expenditures of Cuba for the fiscal years 1900 and 1901:

Agriculture.-Judged by export figures, the year 1901 was a prosperous one for the farming interests of Cuba. Comparing the statistics of exports to the United States for the eleven months ending in November with the same period of 1900 it will be seen that there was a material increase in the principal crops. Sugar exports rose from 651,497,257 pounds in 1900 to 1,259,196,823 pounds for the eleven months' period of 1901; and tobacco, leaf and cigars, from 12,678,949 pounds in 1900 to 16,472.552 in 1901. The difficulty of securing sufficient labor to cultivate the land was again experienced in 1901. The most widely discussed and apparently vital question that arose in connection with Cuban agriculture was that of reciprocal tariff concessions between the United States and the island. (See paragraph The Sugar Question.) The contention of a large number of planters is that without some reduction of the duty on sugar and tobacco it will be impossible for them to compete in the only important market available-the United States-against the protected beet-sugar industry and the prohibitively protected manufactured tobacco products. In both sugar and tobacco, however, the amount of exports to the United States increased, tobacco about 25 per cent. and sugar nearly 50 per cent. over the amounts exported in 1900. As applied particularly to tobacco, the demand for the reduction of duty of 20 per cent., which represents the minimum reduction agreed to by the planters, is based upon the desire to compete with the cigar makers of the United States. The duty on cigars is $4.50 per pound and 25 per cent. ad. valorem; and it is stated that, counting the cost of shipping, cigars which cost in Cuba $30 per thousand can not be delivered in the United States for less than $93.50 per thousand. At this price, the Cuban tobacco growers assert, it is impossible to compete with the trade in American made cigars. American cigar makers, on the other hand, maintain that any reduction of duty on cigars and cigarettes will result in lowering the pay of the workers in the Florida factories, where most of the imported Cuban leaf tobacco is manufactured, and in the inevitable reduction in the price of the better grade of cigars. While the Cubans demand the privilege of turning their growth of leaf tobacco into the finished product on their own estates and with their own labor, the manufacturers of the United States prefer to keep the duty on leaf tobacco down to a mere nominal rate and keep their factories at work. The American manufacturers contend that with a lightening of the tariff charges Cuban manufacturers would import Porto Rican tobacco, which is of inferior quality, make it up and sell it for the Cuban product. The Cubans assert that this practice, once confessedly resorted to, has been definitely abandoned. Little opposition to the tariff reduction asked comes from the American tobacco growers, for their product is of an admittedly lower grade, the best of which is used for wrappers, but not capable of competing with the Havana grades.

Cuban Commerce.-The statistics of Cuban commerce for the fiscal year ending June 30, 1901, show total imports of $65,050,141, of which $28,078,702 came from the United States, and exports of $63,115,821, of which $45.497,468 went to the United States. These figures show a decrease of imports over the previous year and an increase of exports. For the fiscal year 1900, the total imports to Cuba were $71,681,187, of which $28,078,702 came from the United States, while the exports in 1900 amounted to $45,228,346, of which $34,621,879 went to the United States. In 1892, which may be taken as an ordinarily prosperous year under the Spanish régime, the imports to Cuba were $64,000,000, and the exports, $93,000,000. It will be seen then that though the imports are not below what they were before the war, owing for the most part probably to renewed purchase for improvements made by

the Cuban sugar planters in the hope that the United States tariff would be lowered in their behalf (see paragraph The Sugar Question), the exports of Cuban crops and more especially of Cuban sugar, are still far below their normal amount. The increased exports of Cuba for the fiscal year 1901 were largely accounted for by the increased exports of sugar and tobacco. The exports of sugar and molasses and its manufactures amounted in 1900 to $18,668,797, and in 1901 to $28,224,955. The exports of tobacco manufactures amounted in 1900 to $21.712,655, and in 1901 to $28,906,040. The United States in 1901, as in 1900, took practically all the sugar that was exported. But while the exports of tobacco increased during the year by over $5,000,000, the United States took only some $300,000 more in 1901; the figures being respectively $12,934,339 in 1900 and $13,175,793 in 1901. The only other considerable exports of Cuba were cocoa, $281,211 in 1900 and $514,062 in 1901; vegetables and fruits, $584,756 in 1900, and $1,062,371 in 1901; wood and manufactures of wood, $1,565,952 in 1900, and $1,289,258 in 1901, and vegetable fibres, $649,959 in 1900, and $1,204,577 in 1901. Of imports to Cuba may be mentioned wheat flour to the amount of $2,154,702 in 1900, and $2,206,759 in 1901; coffee, $1,679,796 in 1900, and $2,082,945 in 1901; rice, $3,414,388 in 1900, and $3,335,721 in 1901; wines and liquors, $3,508,807 in 1900, and $2,727,279 in 1901; animals and animal products, $11,759,248 in 1900, and $8,476,509 in 1901; meats and meat products, $5.931,943 in 1900, and $8,791,689 in 1901; oils, etc., $1,293,040 in 1900, and $2,598,988 in 1901; boots and shoes, $2,291,362 in 1900, and $1,638,084 in 1901; cotton and manufactures, $7,078,023 in 1900, and $6,067,939 in 1901; vegetable fibres, $3,394,250 in 1900, and $2,056,824 in 1901; wood and manufactures, $1,014,194 in 1900, and $2,667,027 in 1901; machinery, etc.. $2,459,493 in 1900, and $2,495,417 in 1901; iron and steel manufactures, $1,163,892 in 1900, and $2,988,002 in 1901; other metals and manufactures, $1,460,125 in 1900, and $821,184 in 1901.

As stated by the secretary of war, of the $37,000,000 of merchandise which Cuba imported in the fiscal year ending June 30, 1901, from countries other than the United States and of the much greater amount which they would import if prosperous, and with proper reciprocal tariffs, a large part would inevitably come from the United States. An examination of the figures of Cuba's commerce shows that in 1901 the United States supplied less than $500,000 of over $6,000,000 worth of cotton goods imported; less than $22,000 of nearly $700,00 worth of woolen goods; less than $171,000 of over $2,000,000 worth of vegetables and vegetable fibres; less than $329,000 out of over $2,700,000 worth of wines; only $713,000 out of nearly $2,598,000 worth of oils; only $422,000 out of $1,053,000 worth of chemicals and drugs; only $1,994,000 out of $8,476,000 worth of animals and animal products; only $405,000 out of $1,638,000 worth of manufactures of leather, and only $3,000 out of $3,335,000 worth of rice. Substantially the whole of these articles might under proper conditions come from the fields and factories of the United States.

The Sugar Question.-During the whole year, and especially in the late autumn, when Cuba's sugar crop was ready to be cut, the question of what concessions, if any, the United States would grant to Cuba's sugar exports was widely discussed and was admitted to be of the utmost significance to the whole industrial situation of the island. The case of Caba as presented by the president, secretary of war and by General Leonard Wood, the military governor of the island, was simple in character, and may be stated substantially as follows: In the three years since the island had been under the authority of the United States, the entire machinery of education, charities, sanitation, laws and administrative methods had been reconstructed or replaced. So far as a carefully drawn constitution, free elections held thereunder and the expressly stipulated authority of the United States to intervene to protect Cuba from domestic insurrection or from foreign aggression, could do so, provision had been made to insure a tranquil, stable and republican form of government. But no government could long endure, and no considerable state of civilization be maintained where the people were impoverished and left without means or hope of ordinary material welfare. And to this state it was asserted Cuba had been brought and could not be extricated unless tariff concessions were made by the United States. For the wealth of Cuba consisted, broadly speaking, in her tobacco and, more especially, in her sugar crops. For these products her natural, and in fact her only market, was the United States. But from the United States, Cuba was debarred by the high tariff wall erected by the United States against all foreign countries. And, therefore, the sugar question in Cuba, reduced to simplest terms, was whether the United States tariff wall should be lowered, or whether the administrative labors of the United States in Cuba for three years past, together with the expenses and purpose of the Spanish War, should be allowed to go to waste coincidently with the waste of the Cuban sugar-cane fields. The argument on the subject resolved itself into, first, a statement of undisputed fact as to Cuba's position in the sugar markets of the world and of the United States; and, second, a controversy as to the effect upon the United States' sugar industry that would result from

giving Cuban sugar a virtually free access to this country. The statement of fact and the ensuing argument may be stated as follows:

Cuba's Position in the Sugar Markets of the World.-Owing to direct or indirect bounties on beet sugar offered by all the important European countries to their domestic producers, the world's production of sugar (See article SUGAR INDUSTRY) has increased rapidly of late years, and now largely exceeds the demand. Europe produces over twice as much sugar as she consumes, and as this surplus must either be sold or become a total loss, the domestic consumer is forced by various governmental devices to pay a high price for his sugar, thus allowing the producer to export sugar at or below the cost of production. In this way excessive pressure is brought to bear by the sugar-selling countries upon every market for sugar in the world, the cane sugar of the West Indies is driven out of competition, and England and the United States, the only two great sugar-importing countries, are made the especial dumping grounds for the bounty created sugar of the continent. In England, where no countervailing duties are charged upon bounty exported sugar, Cuba cannot possibly sell her sugar except at a loss, and therefore the only resource left to her is to persuade the United States to grant such a reduced tariff as will open a sugar market to her.

That Cuba has not at present a profitable market in the United States may be shown by the prices for sugar prevailing in the United States in 1901. The average cost of raw sugar to refiners in that year, that is, the average market price, was 4.047 cents a pound. Now the average duty on imported sugar is 1.68 cents a pound; ocean freights from Cuba, lightering, packing, and shipping charges, aggregate .35 cents a pound more; so that the Cuban manufacturer receives for his sugar less than 2 cents a pound when delivered at the port of shipment. As the price of the cane ranges from 1 cent to 1.25 cents a pound, this margin of less than 1 cent a pound for all expenses connected with the manufacture of raw sugar entails a loss estimated at about one-half a cent a pound. Hence to permit Cuban sugar to be sold at a reasonable profit in the United States, it is estimated that the sugar duties must be reduced at least 50 per cent., that is to say, from 1.68 cents a pound to .80 cent a pound or thereabouts. That the admission of Cuban sugar on these terms, even assuming that the entire crop would come to the United States, would not bring about a glut in the United States markets may be shown as follows:

The consumption of sugar in the United States for the calendar year 1901 was 2,372,316 tons, of which amount 439,986 tons was of domestic production: 380,499 tons were from Hawaii, Porto Rico and the Philippines, leaving imported tariff paying sugar to the amount of 1.551,861 tons. Of the tariff-paying sugar, 559,800 tons came from Cuba, leaving, in the rough, 1,000,000 tons imported from other countries. Now while the Cuban sugar crop may be increased greatly under improved industrial conditions, and with the assurance of a ready nearby market, and while the Cuban crop is in fact estimated at 875,000 tons for the crop year 1901-02, as against 635,856 tons for the preceding year, the fact nevertheless remains that the consumption of sugar in the United States increases at the rate of about 100 per cent. in every fifteen years, or more rapidly than the most optimistic estimates of the possible increase of the Cuban sugar crops. At the same time, the domestic production of sugar in the United States, including the production of the Philippines, Porto Rico, and Hawaii, is stated to be incapable of any large increase in the near future. And, therefore, allowing for a large annual increase in Cuba's sugar crops, the United States would still be forced to import annually one million tons of sugar. This estimate, however, leaves out of consideration the increase of beet sugar production in the United States, and it is precisely from the beet sugar interests that nearly all opposition comes against reducing the tariffs on Cuban sugar.

Beet Sugar vs. Cane Sugar.-The beet sugar industry in the United States has been practically developed to its present point within the last ten years. In the crop year 1892-93, the beet sugar crop of the country was 12,018 tons; in the crop year 1899-1900, it was 72,944 tons; for the crop year 1901-02, it was estimated at 150,000 tons. Eviden ly the possible increase of an industry which has made such strides within ten years is very great. Its advocates claim that it may become relatively as important in this country as it is in Germany. It depends upon intensive culture, and flourishes in sandy soil inapplicable to other crops. Moreover, the sugar beets may be produced very cheaply and at the same time return under present conditions a large profit, both to the farmers and to the beet sugar manufacturers. How cheaply beet sugar may be made is shown by the fact that Mr. Henry T. Oxnard, the spokesman of the industry, estimated in 1899 that refined beet sugar could be produced at 3.1 cents per pound, while since then other experts have claimed that it could be produced even cheaper, or at from 2.5 cents to 3 cents per pound. If these figures are correct, the beet sugar manufacturers are enabled to clear nearly 100 per cent profit on every pound of sugar sold. For the American Sugar Refining Company, which sets the price of sugar, is unable, owing to the existing tariff on im