time under Spanish domination. The proper remedy and the power to apply it have been in American hands for more than three years. Cuba's streets may be the cleanest in the world, and there might be a schoolhouse to every one of her 28,000,000 of fertile acres; but if her industries are wrecked, her planters, the source of her wealth, bankrupt; and her laboring class without employment and destitute,-clean streets and schoolhouses will be an inadequate substitute for national prosperity. No parallel lies between the Cuba of to day and our own South in 1865. Northern capital went into the South to develop its resources, and the South had free access to the market for her products, -her cotton, her tobacco, her rice, and all the rest of her boundless resources. Give Cuba that market, even now, and her government is assured, and her people will knock at no man's door for alms or aid.

It is a frequent comment that the future of Cuba depends absolutely upon her commercial relations with the United States. That is true, as a broad proposition. Cuba's highest and most rapid development hangs chiefly upon the utilization of her resources by American capital, and upon an open doorway to the markets of her northern neighbor. Cuba is distinctly an agri. cultural country, dependent for her wealth upon the products of her soil. There is little or no probability that her manufactures will ever be more than a comparatively insignificant item in her economy.

Her trade and her commerce are almost entirely in the hands of the Spaniards. The Cuban does not take to trade. He is a man of the soil; or, if he be not a planter, he takes to some profession,-law, medicine, engineering, or politics. It is entirely safe to say that, to-day, no more than a small percentage of the total wealth of the island is represented by the possessions of those who are distinctly Cubans. Taking the figures given in Sanger's Census of 1899, it appears that the total real-estate valuation of the island is, in round figures, $325,000,000. This is mortgaged to the amount of about $250,000,000.

NEED OF AMERICAN CAPITAL.

An unfortunate mistake has been made in the presentation of the Cuban case during the past winter. She has been put, and to some extent has put herself, into the attitude of a petitioner if not a beggar. The truth is, that Cuba can offer an ample quid pro quo for any concessions which might be made in our tariff. Out of her long list of customers, the United States can show only five foreign nations whose annual pur. chases exceed $75,000,000. A reasonably pros.

perous Cuba can offer us a trade which would give her the fourth if not the third place on our list, while a highly developed Cuba might well become a purchaser of some $200,000,000 worth of food and manufactured products per year. This highly developed Cuba is a ready possibility. But it is quite within bounds to say that the development must and will come through the investment of American capital. Spanish capital is not inclined to industrial exploitation. More or less of it is available for loans and for investment in fairly stable enterprises after they are established, but it is rarely available for the initiation of such enterprises. The Cubans have no money for either investment or development. Few of them now have enough for even the proper up-keep of their mills and plantations. Some European capital is already in Cuba, notably the English investment in Cuban railways and cigar factories. But it is to American capital that Cuba will look for its widest development.

PRESENT AMERICAN INVESTMENTS.

In 1894, the year preceding that of the insurrection, it was estimated that some $50,000,000 of American money were invested in various properties and enterprises in the island of Cuba. During the war period there was little or no increase of that amount. The estimates for the present time are in the vicinity of $80,000,000. It is impossible, under existing conditions, to obtain exact figures, but this sum may be accepted as a fair approximation of American investments in Cuba at the present time. A part of this sum is represented by the holdings of non-resident investors; a part by the property of native-born Cubans who have become American citizens by naturalization, though their property and their homes are in the island; and a part shows as the possessions, generally small in amount, of Americans who have gone to Cuba for permanent residence and business.

For various reasons, chiefly because of political uncertainty and the unavoidable conditions of a period of transition, American investment in the island, during the last three years, has come short of the optimistic predictions which found circulation during the opening days of the American occupation. Notwithstanding the unfortunate conditions of to-day, there has been a notable rehabilitation of the industries of the island. Credit for this is due, almost entirely, to the efforts of the Cubans themselves. Although woefully destitute of resources, they have strug gled manfully to pick up the threads of the old life, to establish homes where there were but ruins, and, by a most commendable method of mutual helpfulness, to provide for themselves

and for those dependent upon them. To those of us who saw the devastation and the destitution of three and four years ago, this is one of the most impressive and hopeful features in the life. of the island.

Among the outside influences which are now contributory toward the reconstruction of the island, the most important and the most valuable is found in the department of railroad communication.

RAILROADS.

The first railroad in Cuba was built more than fifty years ago. The system developed gradually until, at the outbreak of the war, it represented about 1,100 miles of road, much the greater part of which was in the western portion of the island, with a center in Havana. About twothirds of the island was practically without railway facilities. The war left the railways in bad condition, and many of the Cuban and Spanish stockholders were ready to part with their holdings. American investors looked the properties over, but decided that the prices asked were entirely unreasonable, and declined to purchase. An English company already owned the line from Havana to Pinar del Rio. Another Eng. lish company bought up the system known as the United Railways, which covers, generally, the ground for a hundred miles or so to the eastward of Havana; and another English organization secured the Cuba Central Railway, which occupies a portion of the field eastward of the United Railways. These companies have done something in the way of improvement and reconstruction, but nothing in the way of extension.

The leading railroad feature of the island is the work being done by the organization of which Sir William van Horne is the directing head. The company holds a New Jersey charter, and its purpose is a colossal development enterprise in which. its railway line is but an incident, although, necessarily, the whole scheme rests upon means of transportation. Up to the present time nearly, if not quite, $10,000,000 has been actually expended. For some months a force of 5,000 to 6,000 men has been busily at work clearing a way through forest and jungle, grading, bridging, ditching, and laying tracks and rails over a stretch of about 450 miles through the heart of the prov inces of Santa Clara, Puerto Principe, and Santiago. Unless the work be blocked by the rainy season, August 1 should see a rail connection from Pinar del Rio, 100 miles west of Havana, to Santiago de Cuba, more than 500 miles east.

A unique difficulty was encountered at the be. ginning of this enterprise. The so-called Foraker Law of the American Congress prohibited

the granting of any concessions or franchises to individuals or corporations during the period of American occupation. In the face of this, Sir William van Horne and his associates began their work upon an enterprise which, before it is definitely concluded, may, in the words of Sir William, involve twenty millions, thirty, fifty, or a hundred millions of dollars." It has been asserted that the work was, in fact, a violation or, at best, an evasion of the Foraker Law. That is not the case. It has complied with the law. That law prohibited concessions and franchises. The Cuba Company, as it is called, neither has nor has asked for either. It has bought lands. throughout its intended route and has laid down rails and ties upon the lands thus bought. It has purchased a continuous strip of land some 450 miles in length and 30 meters in width. It obtained a revocable license to cross streams and highways, and thereby placed itself at the mercy of any government which might be established. It encountered obstacles in the shape of individ ual owners who refused to sell except at exorbitant figures. It encountered areas to which no owners at all could be found, and other areas of doubtful and complicated title. Upon its surface, it was a gigantic speculation whose outcome was exceedingly doubtful. Yet it went ahead, spending its millions along the way.

The laws, as they existed, gave the company no rights of expropriation. Those laws gave the right to construct railways upon private lands, and many miles of such railways were in operation upon the sugar estates, but they gave no right to operate them for public uses. Such roads could carry no passengers and no freight except their own. The company bought an existing line, of some twenty miles in length, running from Santiago northward to San Luis, and leased the military line which Spain built in connection with its line of blockhouses, trenches, and barbed wire fencing, from Jucaro to Moron, in the hope of confining the insurrection to the area of its inception in the eastern part of the island. To the outsider, the whole scheme presented every sign of an extremely precarious undertaking. Newspapers attacked it, and various local politicians frankly declared their purpose to make the company open its check book whenever it should come into their power to regulate the laws of the island. But the company proceeded with its work, placating here and receiving support there, gradually and surely diminishing its opposition throughout the entire area of its oper ations. Its processes of construction put large sums of ready money into circulation in a region where it was greatly needed. While in that section a few weeks ago, a number of the leading

people told me that without the money which had followed the work of the Cuba Company, it was by no means improbable that the people of the region would have been starved into a condition of revolt.

On February 7, 1902, there was issued from the headquarters of the military government an order known as No. 34. This is unquestionably one of the ablest railroad laws which was ever drafted. It is concise, yet comprehensive. It protects both public and private interests, is broad in conception and extensive in scope. An objection undoubtedly lies in the fact of the creation of so important a law by the American authorities at a time so little preceding the day when the Cubans were to undertake the control of their own affairs. But its justification lies in the merits of the law itself, and in the fact that it makes possible the rapid prosecution of an enterprise whose development constitutes, beyond all question, the key to the future of the island of Cuba. The railway and development scheme of the Cuba Company, in which English and Canadian capital is associated with American capital, will open to settlement and productive cultivation an area, hitherto little more than a vast wilderness, of twelve to fifteen millions of acres of the richest land in one of the richest spots on the surface of the globe.

chases would involve large investment of capital. Those who contemplate such investment are fully aware of the fact that only a limited number of the already established estates would be in any way a desirable purchase, in view of the much greater advantages offered to the investor in virgin lands for plantations and the erection upon them of up-to-date grinding mills. Any number of the old estates can now be purchased at almost any price, and there have been few transactions. Nor is there any probability that, under any circumstances, the virgin lands could be bought at any lower prices than those which are now quoted. With the exception of a small mber of estates, which the present owners can

hold and operate, the opportunity for

profitable investment lies distinctly upon the side of the virgin land with the modern mill. Before many years, these will almost inevitably crush out a large number of the old estates. The new lands are available to-day at prices which offer no probability whatever of reduction, and there appears no competent reason for forcing general disaster in order to purchase undesirable or less desirable properties.

The total of American investment in Cuban sugar production is to-day probably not far from $40,000,000, about equally divided between Cubans who have taken out naturalization papers and those who are citizens of the United States by natural right. Of the amount held by the latter class, about two-thirds is of a standing which antedates the insurrection of 1895. This is represented by such estates as the Constancia and the Soledad, both near Cienfuegos. These have been owned by native-born Americans for the last twenty or thirty years; $7,000,000 to $8,000,000 will probably fairly cover all American investment in Cuban sugar properties since the Spanish evacuation. There is no doubt that many other millions are ready and waiting to move in if the movement be justified by political conditions and a fair market, particularly the latter.

The sugar industry is a business for large investors. Renters or owners of comparatively small properties, located in the vicinity of the large centrals," or grinding mills, find the production of cane a reasonably profitable enterprise under normal market conditions as a cash crop. Many of the mills depend largely upon this source of supply. This is indicated by the fact that during the last season the number of mills in operation was about 160, while the number of cane-growers, large and small, is estimated at from 18,000 to 20,000.

MINING ENTERPRISES.

Although many metals and minerals are included among the potential interests of Cuba, few mines of any importance have been developed thus far. As far back as the early days of Spanish settlement, the copper mines near Santiago, across the bay to the westward, were a source of supply, and they have been, in later years, a highly profitable investment. The war

of 1868-78 stopped their operation for a time, and no extensive work has been carried on since that date. The numerous properties have now been bought up by American capital, represented by Messrs. Rand and Chanler, and they will soon be reopened. Some $600,000 has already been expended, and it is probable that half a million dollars or so more will be laid out before

the mines are put upon a paying basis. There is no question of the value of the properties, and there is every probability that the enterprising gentlemen who are reopening the Cobre mines will find ample returns for their outlay.

The iron and manganese mines to the eastward and northward of Santiago have, since the cessation of hostilities, repaired their damaged properties, and are again in operation. The SpanishAmerican Iron Company, at Daiquiri, represents an investment of $3,000,000 of American money. Its iron is of a highly desirable quality, and its output finds ready sale in the American market. The Juragua iron mines represent another $1,500,000. This has been a prosperous affair, but its ore now shows signs of exhaustion, and its shipments are greatly reduced. The Sigua iron property swallowed some $2,000,000 of American money, with no returns. The Guama mine has absorbed about $1,500,000, and is not remarkable for its promise of revenues.

Three manganese mines are open in the same district. The Panupo represents $500,000, and the Cuban Manganese Company and the Standard represent $250,000 each. Work is being carried on, and the proprietors are hopeful of ample results. Some 200 other mining claims are located in the same region, but they are as yet in the form of claims only. Some may develop into paying properties, but the greater num ber will probably remain as prospect holes and nothing else. In other parts of the island claims have been filed, and talk may be heard of undeveloped possibilities of great wealth. Here and there some mine may pay. But the great

riches of Cuba will be found in that which will grow out of the soil, and not in that which lies beneath the surface.

FRUITS.

Some money, particularly that of the United Fruit Company, has gone into lands for fruit growing. This company has acquired extensive plantations on the northeastern coast. Bananas will constitute a large portion of their merchandise, and there is ample assurance that the locality will prove a marked advantage over Jamaica and Central America. Eastern Cuba may well grow all of the bananas and cocoanuts that can be consumed in our Eastern market. In several sections, notably in the vicinity of Havana, Americans have bought tracts, some large and some small, for the cultivation of oranges, pineapples, and vegetables. The greater number of these have met with fair success, and the industry offers many inducements to those of small means who are willing to back their capital with due intelligence and hard work.

TOBACCO AND OTHER INTERESTS.

During

Nearly three years ago, the Henry Clay and the Bock & Co.,-large cigar manufacturing concerns,-effected a consolidation of interests and bought up a number of other factories. The capital was English. American capital,-some $6,000,000 in amount,-sought a similar consolidation through an organization known as the Havana Commercial Company. This absorbed a large number of the factories which had not been taken in by the Henry Clay-Bock combination. Both of these organizations paid very high prices for the concerns which they purchased. the month of May last, there was incorporated under the laws of New Jersey a combination known as the Havana Tobacco Company. It is a branch of the so-called Tobacco Trust," and its capitalization provides for $30,000,000 of common stock, $5,000,000 of preferred stock, and $10,000,000 in bonds. This organization takes over the Henry Clay-Bock combination, the Havana Commercial Company, and the Cabanas factory, thus giving it control of much the greater part, and practically all of the important part of the Cuban cigar and cigarette trade. greatest success depends, naturally, upon the establishment of favorable trade relations between Cuba and the United States. As revision of the American tariff, if not the annexation of Cuba, seems inevitable at some early day, there is sound reason for belief that those who control so large a percentage of the limited output of the choice Vuelta Abajo tobacco are well in the way of ample dividends, notwithstanding their payment of large prices for their purchased properties.

Its

The business of these companies is confined to the manufacture of cigars and cigarettes. The leaf-tobacco business of the island shows no located American capital, although the United States is a large purchaser of Cuban leaf for admixture with American leaf in the manufacture of that which we know as domestic" cigars. Purchases of leaf for American account and shipment are made by visiting or by resident buyers. A few Americans have settled in the tobacco regions and engaged in the cultivation of the Cuban leaf. At present there is little room in that line; but if the American market shall become open to the cheaper grades, there are considerable areas in which there is ample promise. At present, these grades are completely barred from the American market by a tariff of some 300 per cent. ad valorem.

It is impossible in the limited space of a maga zine article to review in detail the various existing and projected enterprises. Foreign capital,

partly American, has purchased the street-railway system of Havana, and is planning extension in and around that city and construction in other cities. At present Havana is the only city on the island having street-car service. The telegraph system is a government institution, inherited from Spain, and improved and extended by the Signal Corps of the United States army. Telephone systems are in general use in the cities and in many of the larger towns. Banking facilities are ample in the principal cities, but an efficient system of country banks is greatly needed. With the establishment of a general government, and of municipal governments, upon a sound financial basis, there must come a large amount of contract work, notably in the line of sewer and pavement work and in harbor improvements. The country will also need public buildings and school buildings. But all of these must wait for a reëstablishment of productive industry as a basis for national and municipal

revenue.

Americans have gone to Cuba with various minor interests representing, in their aggregate, several millions of dollars. These have met with varying success. A few have gone into commercial lines, but, as a rule, their trade has been chiefly confined to the American residents.

The greater number of those who have essayed retail trade have made a failure of it. The Spanish merchant is a difficult competitor. Some have opened offices in professional capacities, as doctors, lawyers, dentists, etc. Americans have opened hotels, barrooms, and boarding houses. American real-estate agents and speculators are also in evidence.

CUBA'S INDUSTRIAL FUTURE.

Cuba should not be overlooked as a great field for legitimate enterprises, well and conservatively managed. The failure of many thus far should not be discouraging, inasmuch as their mishap is undoubtedly due to lack of tact or to an absence of sound business methods. It is much to be hoped that the island is now done with the promoter who has no money, but who hopes for a profitable sale of the option which he obtains by such methods as are the custom of his kind. The same is to be hoped regarding the man who goes to Cuba to introduce ice machines or to establish electric-light plants, carrying with him an idea that Cuba and Darkest Africa are correlative terms. Much is said about defective land titles in Cuba. There need be no apprehension on that score if one retains, as he should and would at home, a duly competent legal adviser. Most of the titles are, or can be made, good and clean. Those which are defective are, for the

present, beyond redemption. Under the system of registration employed in the island the question of titles is settled with little difficulty.

Cuba will reach her highest development when she becomes a land of small farmers, with such diversity of products as is readily possible with her soil and her climatic conditions. For years sugar and tobacco have been her great industries. With freer access to the American market, there is no reason why these should not attain much larger proportions than they have yet reached. But Cuba must and will diversify her products. Many very promising lines are open to investors of large or small capital. The labor problem presents a serious difficulty, and no greater mistake could be committed than that of the imposition of any immigration laws which would prohibit or limit the incoming of men and families from the Canary Islands and from certain Spanish provinces. These form the best, most suita. ble, and most desirable element that comes to the island. The Cubans do not want "coolies" any more than Americans do. They do want and need those who would, in large numbers, be shut out by the unmodified application of the American immigration laws.

The bonanza" days of sugar raising are past. Under any reasonable trade treaty, or even under free trade, the industry would find but a duly normal development. Its extension will depend far more upon an influx of a class of immigrants physically capable of doing the necessary field work than it will upon the readiness of capital to invest in the business. With its present equipment, the island can produce little if anything beyond 1,200,000 tons per year. The doubling of that output would involve an investment of some $250,000,000 and a large increase in the population. It will be many years before such a combination of capital and labor will be in any danger of glutting the world's market with Cuban sugar. The areas of possible cultivation of the unique Vuelta Abajo tobacco have been fully occupied for many years; but, if given a market, there is room for a vast extension in the production of less valuable but still desirable and readily marketable grades of the weed. With the increase of these two major products, and with the extension of transportation facilities and a due reduction of the present exorbitant rates of transportation; with settled governmental conditions and ready access to the markets of the United States; and with the opening for productive cultivation of those vast areas of middle and eastern Cuba, that Cuban Question, which has intruded itself into American politics for the last hundred years, will be definitely settled, and Cube will be again the Pearl of the Antilles.