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TOBACCO AND OTHER INTERESTS.
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. During 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 proper
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,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 number 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.
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.
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 500 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 reestablishment of productive industry as a basis for national and municipal
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 impo sition 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 Cuba will be again the Pearl of the Antilles.
THE CUBAN MUNICIPALITY.
BY VICTOR S. CLARK.
HEN our officials assumed the administration of Spain's former colonies, they found in existence a local political unit unfamiliar to their past experience. Many were probably unaware how very distinct from any homologous division in the United States was the Spanish municipality which they then encountered. Yet it had existed continuously in the New World since the time of the discovery, with only such changes as were necessary to keep it in harmony with the institutions of the home country. Its ancestry, traditions, and theory of government, however, were not only different from those of an American township or county, but they represented a line of political development that had begun to diverge from our own centuries before the Christian era.
The Cuban municipality is a lineal descendant of the Roman municipality, which in turn was a product of a Mediterranean civic culture extending back to the days of Troy and Pergamum. The Græco-Italic civilization was urban, and during its long continuance the historical precedence of the rural to the city community was forgotten. The city was regarded as the primary element of the body politic. It ruled the country like a possession or a piece of property. Such a civilization could not develop representative government, which is essentially the political machine of a scattered rural population undominated by any urban center. Rome's easy conquest of the ancient world was partly due to this feature of its political organization. A city could not evade her armies, and when she had once mastered this central ganglion of civic activity all the coöperative life of the dependent territory was paralyzed. The rural organization of the Teutonic tribes was a barrier to her progress. It is from Rome, who in turn borrowed from her predecessors, that we get the theory and methods of centralized administration, which, applied to local government, produce the Cuban municipality. With us, on the other hand, the primary cell of the body politic is the rural community. The local unit is the depositary of all residual authority, and in it originate the ultimate motor impulses of government. We may not formulate this thought clearly in our minds, but unconsciously we accept and apply it in our political reasoning. It is not strange, therefore, that the municipal system of the Spanish colonies was unfamiliar, in both form and theory, to our administrators.
SURVIVALS OF THE ROMAN SYSTEM.
The municipality in Spanish times was essentially an imposed government. Its authority was derived and its activities were directed from above. Sometimes it was principally a taxing unit, instituted primarily for fiscal interests. During the decadence of the Roman Empire municipal officials were made personally responsible for the imperial revenues of their locality. It was obligatory to accept appointment to these unwelcome dignities, and many a subterfuge was adopted by the wealthier residents of the provincial towns to escape honors that often imperilled their private fortunes. In this respect history repeated itself in Spain's colonies. A native work on Philippine customs tells us how a municipal officer loses his patrimony through the expenses of his office, and another involuntary appointee finds his property bonded to the treasury of the state against his will for the fulfillment of his official obligations, which consisted of wringing a certain sum of taxes from his fellow townsmen.
The judicial functions of the municipal governments early assumed prominence. The name of the principal city officer-the alcalde-is the Arabic word for judge, the familiar el cadi of the "Arabian Nights." Court fees once made these offices very lucrative. They were sold or granted, like English church livings, to wealthy subjects, and until quite recently were disposed of by auction. It was not until 1844 that this practice of selling municipal offices to the highest bidder was entirely discontinued in Cuba.
CUBAN CITY COUNCILS IN EARLY TIMES.
The earliest Cuban municipalities date from 1540. They were formed after the precedent of Spain's medieval cities, with an alcalde and city council, the latter often known in those days as the cabildo. For several hundred years these local bodies were vigorous, and possessed considerable authority. The Cuban cabildos made grants of their hinterland to private petitioners, and exercised other property and judicial rights almost like independent colonies. Some of the city councils in South America actually levied war and instituted rebellions. Spain promptly discouraged such an exuberant exercise of local powers, however, and succeeded in making the councils merely administrative bodies. In 1850, ten of the thirty-two towns of Cuba were in
charge of municipal committees, which consisted simply of a legal officer and two advisers. The main municipal functions at this time were nominally the same as at present, and included the support and supervision of police, primary edu. cation, public health, and public improvements. All of these duties were so neglected that Trinidad, with eighteen thousand inhabitants, had no city hall, public water supply, schools, charities, or municipal police. The only public enterprise was a few street lamps supported by private subscription. Similar conditions prevailed in Santiago. In Havana the police received no regular salary, being paid by a share of the fines collected from offenders arrested by them and from certain half-legalized extortions. There was no local tax for public improvement except a carriage tax, the proceeds of which were devoted to paving the streets.
LOCAL GOVERNMENT BEFORE AND AFTER THE WAR.
Modern municipal government in Cuba dates from the close of the ten years' insurrection, in 1878, when the organic municipal laws of Spain were extended to that island. It was this form of local government, very slightly modified by subsequent acts and administrative decrees, that our officials found in operation in Cuba. The military government instituted a number of changes demanded by reconstruction conditions, the most important of which relate to elections and taxation. Some municipalities were also suppressed in the interest of economy, having been created unnecessarily in Spanish times to provide berths for peninsular politicians. The new Cuban constitution contains a municipal title defining in a broad way the relations of the municipality to the other governing powers and determining its form of government. This title. may be construed so as to guarantee local autonomy as complete as exists in the United States, for all intervention by superior authority must be justified by some violation of the constitution or of the general laws and confirmed by a judicial decision.
These constitutional provisions place the municipalities upon a new basis-Anglo-Saxon in theory and make them the depositaries of original powers. As yet this change is only nominal, and the ability of the untried municipal adminis trators to cope with the new responsibilities involved is by no means demonstrated. The constitution further provides that Congress can regulate the methods by which the municipalities exercise their powers through general legislation, and this will quite possibly lead to a retention of close supervision by the central authorities. It is to be presumed that old habits of administra
tion and political thought will assert themselves to make the local governments less independent and spontaneous than in our own country. PRESENT FUNCTIONS OF ALCALDE" AND COUNCIL.
Until the Cuban Congress enacts laws supplanting those in force, the details of municipal organization and administration will be regulated by the Spanish municipal code, as amended by the orders of the military government. The constitution provides for a municipal council and alcalde elected by direct vote, and gives the council authority to decide all matters relating exclusively to the municipalities, prepare budgets, provide necessary revenues, contract loans, and appoint and discharge employees. The alcalde is an executive officer, with a qualified veto upon the legislation of the council. Every municipality is a judicial district, and justices are elected at municipal elections and paid from the municipal budgets. Other officers have no judicial functions.
WARDS AND DISTRICTS.
A municipality consists of a town and a surrounding rural district. The area of the latter may vary from a few square miles to that of one of our larger counties. It may itself include villages of considerable size. The municipality is divided into wards or barrios, each of which has its ward mayor, who performs administrative functions under the direction of the mayor. He is appointed by the latter from among the residents of the ward, and is not a member of the municipal council. Several barrios form a subdistrict of the municipality and bave at their head a deputy mayor, who is clected by the council from among its members. There is a third municipal subdivision, the electoral district. Councilmen are residents of and represent these. Their limits are determined by the munipal council. Provision is made for minority representation by allowing no elector to vote for the full number of councilmen representing his district. For instance, if there are four aldermen to be chosen,-which is the most usual number, he can vote for but three of the candidates. The councils are renewed by half every two years.
General taxes are assessed by a board consisting of the municipal council and an equal number of citizens drawn by lot from lists of representative taxpayers. This board also authorizes new taxes and audits municipal accounts. Incomes from real property are assessed at practically their actual value, though an order of the Spanish council required that they should be estimated
at one and a half times the rent in case of rural estates. Plantation crops for occupants' consumption are not included in reckoning incomes. The maximum legal tax rate varies from 6 to 12 per cent, on urban property, and from 2 to 6 per cent. on exclusively agricultural property, according to locality, -the rate being highest in Havana and vicinity. Sugar plantations containing mills pay 8 per cent.
The aggregate revenue of the Cuban municipalities during the last fiscal year was $4,270,000, of which $1,349,000 was derived from the tax on incomes from land and improvements, and $1,262,000 from the tax on industries and occupations. In the order of their importance the other sources of revenue were,-water service, $359,000; income from municipal property, $321,000; abattoir fees, $297,000; liquor consumption tax, $183,000; and fines and penalties, $110,000. The remaining $389,000 was raised from sixteen other sources, the two most impor tant of which were a carriage and transportation tax and a license fee required of peddlers and venders in the public highways. Urban property pays $1,034,000, and rural property pays $315,000 of the territorial tax. The military government has suppressed the consumption taxes on food, which were formerly a main reliance for local revenues.
The liquor business contributes the largest item to the industrial tax. There are 4,797 drink shops in Cuba, which pay an aggregate tax of $122,375. Next in order come 123 banking houses, paying $75,675; 1,482 general stores, paying $69,508; 485 pharmacies, paying $41,690; 776 cafés, paying $36,208, and so on through the 236 minor industries included in the assessment rolls. Formerly the collection of taxes was farmed out to the highest bidder, but this practice has been stopped by the military government, and they are now collected by public officials.
Since the war the general treasury has paid an important share of the municipal expenses. This amounts at present to nearly $1,500,000, and includes in round numbers $1,250,000 for public schools, $150,000 for hospitals and charities, and $50,000 for jails, besides such assistance as may be given for local sanitation and public works. The expenses charged to municipal revenues are $1,075,000 for administration, $1,225,000 for police, $700,000 for the support of municipal services, such as street lighting and cleaning, parks, and cemeteries,-and approximately an equal sum for pensions, subventions, and interest. Over $614,000 of this last item is repre
sented by interest and amortization of Havana city bonds. Nearly $118,000 is expended for jails, $125,000 for public improvements, and $40,000 for municipal charities.
Of the 128 municipalities in the island at the close of the last fiscal year, only 36 had standing debts of any kind. Exclusive of the city of Havana, which had $10,000,000 (Spanish gold) six per cent. bonds outstanding, there was no bonded indebtedness, and the total interest charge was less than $5,000. Most of this was represented by censos, or permanent annuities charged against estates that had in one way or another become city property. Some of these annuities return to the municipal treasuries as income from the endowment funds of municipal schools and hospitals. The total floating debt of all the municipalities was $170,000, against which the local treasuries held $152,000 in cash and $542,000 in credits for back taxes and other unpaid revenues.
THE MUNICIPALITY AS A SCHOOL IN SELFGOVERNMENT.
The political capacity of a whole nation is demonstrated by its local more than by its general government. The Spanish immigrants in Cuba show greater talent for self-organization,judging by their clubs, labor unions, and co. operative societies, than the natives. Cuba might therefore appear less fitted than Spain to create a system of vigorous local autonomy. But we must allow for the reaction of the general upon the local government and for the communication of political ideals and methods from the United States. Both of these influences may have a far-reaching effect upon the municipalities, and is already predicted in the new constitution. Many abuses will certainly arise. The cacique, or boss, will flourish upon misappropriated funds and authority. It will be a slow task to instill in the mass of Cubans an intelligent conception of even primary civic obligations. This must be done principally through the concrete and local interests of the municipality, not only in Cuba, but in Porto Rico and the Philippines. Therefore it is not as an instrument of administration, for here its effectiveness has already been tested, nor as an organization for coöperative and social enterprise, for these functions are as yet largely undeveloped, but as a school for the elementary political education of a people that the Cuban municipality assumes new importance with the birth of the republic.