deposits, the Bessemer hematite, is given by the large amount of duties paid into the United States treasury by the American companies which work these mines. Of recent years they have been shipping ore also to Europe. The following table shows the productiveness of iron ore in Santiago by tons:

It is a question whether there are the 10,000,000 acres of virgin forests in Cuba that have been vaguely estimated. Sometimes the innumerable groves of royal palms, the most useful tree known to the tropics, are included in this guess. Experienced Americans who for a year travelled over the island seeking to determine the most valuable timber locations became doubtful of the extent of the wooded area, though the eastern province seemed to them a single forest. But the area is great enough to take many years to clear it. The cedar from which the cigar-boxes are made is found in Pinar del Río as well as in Santiago. The mahogany

close to the coast has been thinned out, but further in the interior it is untouched. The other hard woods are of great variety. Their commercial value is uncertain until systematic lumbering as known in Michigan and Wisconsin is developed. In the building of railroads. the ties may be taken from the woods which it will be necessary to clear.

Stock raising in Cuba offers one of the most profitable fields for a quick return on invested capital. The high rolling land which begins in Santa Clara and extends into Santiago affords the best ranges. Much of this grazing land is capable of sugar cultivation, but many years must pass before this can be engaged in to advantage. The central province of Puerto Príncipe is a vast grazing region. Its Cuban name, Camagüey, means a cattle-pasture. Hundreds of thousands heads of cattle disappeared during the insurrection. To-day the traveller may journey from sunrise to sunset and see no signs of live stock; but this barrenness will not last. The grazing ranges are bound to be restocked not only with cattle, but also with horses. Animals from the United States may be imported to help restock them. Heretofore they have been imported simply as live beef for daily consumption. The supply, however, will not be solely from the United States. In securing oxen for the sugar plantations it is found that Mexico, Venezuela, and Honduras are the main sources. Live stock from the United States will have to be crossed with animals from those countries and with the native stock. It is the common experience that the stock runs out in three generations unless it is renewed by breeding with imported animals.

The landownership instinct is very strong with the mass of the Cuban population. This means that it was strong with their Spanish progenitors and will be strong with the Spanish immigrants of the future. This is shown in the government reports, which were, for Spanish statistics, fairly trustworthy because on them were based the taxes. The last enumeration which was made before the insurrection broke out showed that in the whole island there were 1,119 sugar plantations, 4,214 stock farms, 375 haciendas or large country estates, 188 coffee plantations, 8,485 vegas or tobacco farms, and 22,224 sitios or estancias. A sitio is simply a place, and an estancia is a small farm. The number of city, town, and village real-estate holdings was 76,402. These fincas urbanos, as they were called, shaded off into land-holdings capable of cultivation. It will be several years until an exact estimate can be had of the products of small farming in Cuba.

CHAPTER XII

TRADE AND TAXATION RAILWAYS AND INTERNAL DEVELOPMENT

Some Primary Principles-Adjustment of Purchasing Power of Products by Reciprocity-Tariff Dues and Their Capabilities-New Sources of Revenue-Decay of Spanish Shipping-American Markets for Tropical Products-Unwarranted Expectations of Merchants-Railway Building and Its Limitations-Systems in Operation-The Backbone Line-Value of Existing Railroad Property-English Ownership-Water-Way Competition-Harbor Improvements-Good Roads the Coming Question-Cheap Labor Not Found-Prospect for Agricultural Banks-Strikes Not a Recent Development-Artificial Monetary Basis - Ultimate Supremacy of American Financial System.

TRADE and taxation in Cuba may be reduced to a few simple formulas. The elaboration of these formulas into economic treatises is not difficult. When the elaboration becomes wearisome and confusing the return to the starting point is easy. There is really little need of wandering far away from it into the wilderness of speculative economics.

The island for all time will have to supply the wants of its inhabitants by what they can get in exchange for a bag of sugar, a bale of tobacco, a sack of coffee, and a cargo of fruits and nuts. The adjustment of this purchasing power of sugar, coffee, tobacco, and fruits so

as to bring back the largest quantity of flour, lard, and bacon, the greatest amount of agricultural machinery, and the most extensive assortment of cotton and other dress goods is the problem of trade and also of tariff taxation. The United States consumes everything the island produces. It produces everything that Cuba consumes. The doors open one to the other. There is the whole question of Cuban commerce, and its basis is reciprocity.

It is shown since the American control of the custom houses that an impoverished people not numbering much more than 1,000,000 can pay $1,000,000 monthly in customs duties. This is done by light rates on articles of commerce and consumption. With the restoration of prosperity the rates can be further shifted to articles of luxury, because the Latin-American's fondness for luxuries when able to gratify itself pays tariff tribute willingly.

A hitherto untouched source of internal-revenue taxation exists. It is ample enough to supplant most of the present unsatisfactory internal taxes. This source of revenue is in the tobacco that is consumed in Cuba and in the by-product of sugar known as aguardiente or cane-brandy. Everybody in the Antilles smokes, and smokes countless cigars and packages of cigarettes. Under the Spanish system the wax tapers which were used for lights paid an internal-revenue duty, but the infinitely greater income from cigars and cigarettes was neglected. The aguardiente, besides its use as a beverage, is employed in a variety of household ways. It takes the place of a score of toilet articles which in the United States pay an internal-revenue tax. Inter