F \%\ Ik* f o*V"";V" - ^ i 8 ■ .* ,0" . - ^ 0* " ,# *0* e. "o s -y. s cf- , • ^ aV * ■0- > -.-- *, °<2 ■"* **' 4>% : J s A \ .. \ i » ^ . ' o • \ ■* ^O V ■•■ *■ ' ' * *<*. I ; "o > x u ■<* -rvisio:isr of xctsttxj^r appaies, 1899. WASHINGTON": GOVERNMENT PRINTING OFFICE. 1900. REPORTS OF Brig. Gen. George w. Davis ON INDUSTRIAL AND ECONOMIC CONDITIONS OF PUERTO RICO. . WAR DEPARTMENT, ZDITV-ISIOIISr OIB 1 IDNTSXJI-.^AK, AFFAIES, 1899. WASHINGTON: GOVERNMENT PRINTING OFFICE. 1900. 1 52697 .0X2- 'V REPORT OF BRIG. GEN. GEORGE W. DAVIS ON INDUSTRIAL AND ECONOMIC CONDITIONS OF PUERTO MOO, AS AFFECTED BY THE HURRICANE. Submitted September 5, 1899. WAR DEPARTMENT, ZDIVISIOINT OF IJSrSXJL^R, AFFAIRS, 1899. Digitized by the Internet Archive in 2011 with funding from The Library of Congress http://www.archive.org/details/reportsofbriggenOOunit REPORT ON INDUSTRIAL AND ECONOMIC CONDITIONS OF PUERTO RICO. Headquarters Department of Puerto Rico, Civil Division, San Juan, September 5, 1899. Sir : The industrial situation of Puerto Rico is so deplorable and its future, under present trade conditions, is so discouraging, that I feel it to be my duty to. earnestly request the consideration of certain sug- gestions now presented in a tentative form. I am engaged in writing a somewhat lengthy report on the island and its military government, but that presentation can not be com- pleted for some days and the urgency of the present situation is so acute that I feel it justifies my course in making some preliminary observations and summarizing, somewhat, various points I shall treat of at more length in the report adverted to. Previous to the 8th of August the industrial situation here was far from satisfactory. In previous communications by cable I have adverted to that, but certain bold facts as bearing upon the business, production, and revenues of the island I now give, and in some respects repeat what has before been said. The normal exports under Spain had been about 18,000,000 pesos for several years and the taxes raised for the insular treasury and for Spain were about 5,000,000 pesos. The amount of municipal taxes would approximate another million, I suppose. The exports for calendar year 1898, the year of the war, have not yet been ascertained, but the total must have been much less than formerly. There is as yet some lack of precise information as to the amounts raised by taxes for insular and municipal treasuries. The exports during the current calendar year will show a great fall- ing off, while the present budget calls for an expenditure of about 3,000,000 pesos. The exports will stand something like the following, in pesos : Coffee 7,000,000 Sugar .; 4,500,000 Tobacco 500,000 Total -. 12,000,000 For next year tobacco as an export may be eliminated, as it will be planted only in sufficient quantities to supply home consumption, but of stocks left there may be for export 500,000 pesos. The most sanguine estimate for next year, one-third of a normal crop of coffee for export, or, say, 18,000,000 pounds, which at present prices will net the producers about 1,500,000 pesos. If the destroyed or damaged sugar mills are all restored, the export of cane products may reach 5,000,000 pesos. 5 6 Wo have, then, a total possible export of 6,500,000 pesos, or a little more i han one third the normal. li dors not require n demonstral ion to show thai the industrial con- ditions existing before the hurricane, bad as they were, are excellent by comparison with those resulting from the storm. Formerly bu1 two-thirds of the labor thai soughl employmenl al 30 cents, American money, per day could seoure it, and now not one-third the labor is employed al aii3 rate of pay. A. hundred thousand or more individuals are being fed from the bounty of the \uieriban people, in some localities where the municipal governmenl was feeble and the town oounoils did aol oommand resped (and 1 am M>n\ to say these towns are not few in number), no collections what- ever of taxes can be made; some who oould pay will no1 because of their belief thai the contributions will be squandered; others make this belief a prctexl for nonpayment, and many others who wore well off have no means whatever with which they can even supporl their families, The ooffee lands suffered worst. These trees are planted on the hill and mountain slopes, and in many plaoes the declivities are very abrupt. Hie gale tore up the trees, loosened the soil, and the deluge of water converted the earth into a semifluid. Thou followed landslides, and thousands of aores of coffee planta- tions slid down into the valleys; trees, soil, rooks, and every vestige of culture are piled up in the bottom of the valleys. In such cases there is no restoration possible, for where there were smiling groves are now onl^ bald ro< ; li were uncovered by the avalanches. Where the soil was nol disturbed the most o( the coffee trees were eitlu »te< broken off, or stripped of foliage and the immature berries, Hie larger trees o\ other varieties, which are habitually iwn for sh lie coffee, were blown down, and their protection he coffee trees is also gone; so where the trees are not wholly denuded the prol erries from the sun's heal is absent, and the green fruit is - and spoiled. t- will take five years to reestablish thoso coffee vegas, and there will be necessarily years of want and industrial paralysis. To say thai this will deplete the - is unnecessary, (ov when purchasing power is wanting imports can not be made, li seems tbable thai the importations for the remainder of the year will not reach more than one-third of the estimate, therefore rigid economy will bo necessaryon everyhand. Bui for the fad that [brough.1 over from last ti- on to a half million dollars of a balance, I Id soo no hope of administering the government. \ would not bo surprising if it should become necessary to bor- i pay the iudispens - nses of the .; eminent. The present balance in the insular treasury is jusi an currej The sugar industry has suffered much loss than the others. Some cane has been ; and some has boon buried, and many mills ha\ stroyed, rhe margin >fit at present prices to the sn s - small, but there is a margin of proba a half cent per pound to the manufacturer who has modern machim but the old u Jamaica train" mills, which .". 5 damaged, will instructed, and the grov s on such estates unless owners can tu Man) will be unable to do this, so the p-\ much groM s to rot in The municipal governments are many of them prostrate; the police ,.;,,, qoi be paid, the prisoners can not be fed, and the schools must be closed if not wholly supported Prom the insular treasury. From every town and village I am appealed i<> Cor financial help, donations; loans arc asked, implored even, and the alternative of chaos is predicted as the result of refusal. Proprietors beg for linan- ( .j;,l help ;ui' l the homeless Tor rehabilitation of their dwellings. 1 can think of but I wo measures of relief. Neither alone will fully realize that result, and wiili a combination of the two the recovery will not be immediate. Unless something is done by the invocation of powers beyond my control, I fear that the conditions prevailing will go Prom what is now extremely had to a still worse condition, even to the assumption in certain localities of military government pure and simple, with hordes of people dependent lor their existence on the bounty of the Governmenl of the United States and its people. I have abstained from any expression of opinion upon this matter until I could have time to investigate the real stale of affairs in which the island was left by the calamity, the like of which the people of the United States fortunately have and can have no con- cept ion. It is vilh hesitancy that I propose measures of relief that have been hitherto unknown; bul our country has by assumption of sov- ereignty over foreign lands and people i ncurred responsibilities which can not be evaded. By the treaty of Paris nearly L, 000,000 inhabit- ants of Puerto Rico have been brought nnderthe laws of bhe Union. They are unused to .American laws and customs, and have had In the past no power of initiation. They were taught and forced to rely upon the government in any and every important undertaking or proposition. They have been thoroughly taught to obey, hut know little of self-reliance. Is it surprising that the obliteration of one third of the wealth of the island, other than the soil itself, has been followed with industrial paralysis? So I have to hear the appeals, most piteous appeals, for help from almost every hamlet. They see no way to turn hut lo I he way they have always turned, i. e., to the Government, and as its representative here I must hear and dispose Of I hose appeals. Many millions of money as loans have been asked by municipalities and individuals. I can only give food for the hungry. Should the supply fail, there would l»e a famine such as in the past has swept over and depopulated large districts in India, and China. The proprietors are not able to rebuild ami repair and employ. They can not borrow, for I he banks will no! lend. While fin- agricultural wealth of the island is very large, the con- fidence of investors in the security offered is lacking. The 7 percent Water bonds of the city of San .luan, which have behind them a, ycry large and more than ample security, can nol be sold. The 7 per cent bonds of (he Agricultural Bank here, which are all secured on farms worth three limes the loans, can not be marketed. The measures of relief I have had suggested to me, and which I deem of sufficient importance to submit to the Government ill Wash- in, lit on, are: I. The removal of a II apply myself in arranging o1 her matters or bo supply further information. \i\ annual report on civil affairs will be forwarded as required by October I, L899. I also inclose a communication from bhe Credito and Ahorro Pon- oeno, a banking Institution established in Ponce. (See Appendix 5.) Very reaped fully, Geo. \y. Davis, Brigadier- General, U.S. I., Comma/tiding. The Adjutant-General United States Army, Washington, D. C. A.PPBNDI2 i. S\.\ Ju \n. P. R., August SI, 1899, sik; The inn -i i. ane whioh passed over bhis island «>n the Nth instant has caused an ftlaj Mini- flnanoia) orisis. The wise Franklin said, "Credit is money." it is necessary bo resort to that useful principle to save the oo\in1 ry Erom ruin in the near future. The principal fountain of resouroi of the island that is to say, agriculture lias been terriblj Injured, [f lefl bo itself it would surely become worse and soon be totally plaj ed out, i ater on importation will be greater I ban exportation; and when a country con- sumes more than it produces, itsoapital rapidly diminishes, il becomes poor, and falls into financial ofi \ our banks and our Insulartrea urj lack greal resonrees.it is uecessaryto resori to the means thai eeouonue science advises To that science •• money paper " is nol bhe same as " paper money." 'The Eortner rests on bhe oertainty that the bearer can al an) tone change il into cash The latter rests on oredit, and ties on public confluence. England made use of the latter with its bank notes, and bhe united states with its greenbacks. Theremay bemanj ways of making a foreign lean. I take the liberty to submit iei your consideration the following one, of an official oharaoter, bo be made at home, in order that, if you are pleased to do so, you may in your turn submit it to the Govermnenl at Washington tor approval. Considering thai bhe agricultural wealth and oattle industry of the island amounts to 56,797,742 pesos and 80 centavos, 18,644,584 pesos in agricultural ane, coffee, tobacco, pasture lands, and other cultivation, and 8,038,158 . and -.v oentavos in sumpter oattle, swine, black cattle, and small cattle, therefore a loan for the amouni ol' $10,000,000 could surely be made in the Eollow- \. That the Government allow the insular treasury of Puerto Rico to issue notes to UOO for bhe amount ol $10,000,000. 9, That the landholders who are in need of financial aid may, up to 90 per cent Of the real and actual value oi their arable land, be granted loans in these notes, provided bhe proper proceedings and sworn valuations of experts is had and the proper mortgage on the estate in favor o( the insular treasury is given, : bhis money be loaned bo them at 5 per cent yearly interest, payable in twenty years, in twentieth parts and in cash or in said notes. •I, That the said notes be made payable to bearer. r>. That they be admitted in the payment of municipal taxes and internal revenues, 11 C. That the first amortization begin on the 31st of December, 1901, and that the - to the amount of — Jthdrawn from circulation by the insular treasury each year thereafter. 7. That the annual intere.-.t paid on these loans to the iusular treasury be used to pa] ' peases of issuing the note the budget the this year that have been remitted int of the daim.. I by the hurricane and to construct schoolhousee and ol lie works. . h is of necessity interested in this proposed loan to agricul- ture, utter depends on the life and pi -of the former, shall vol- untarily accept tin I notes without any depreciation whatever, and that banks, ban and chambers of commerce bind then. an agree- ment to do the same in order to facilitate d capital and and thus avoid the hateful procedure of the coerciriv- spectfully, Cayi )ix v Tos we&ary. Brig. Gen. G ■General oi "Puerto B Juan, Puerto I KNDIX 2. HJBADQUABTKBS DEPARTMENT OF PCBETO B P Sir: Ti. ry board of insular policy have the honor to snbmil con- sideration the . . report on the loan el for the relief of the island distribute it. Gr leed, the havoc wrought in the island by the hurricane of the Hth instant, just at the moment when theproduc capital in e lack of markets where: that such must hav sing circumstances to which the li ted. We aj ire of the fact that the wealth of the island is based on its agri- are no butl i the rtire. and ,weritha to the relief of agriculture. Ti. seclude thj rral disas- ter, shoul vernment modern life, so . y connected with e with the necessary resources for th a . but natural, therefore, that •■ imunici- manner we a: - reor running expenses: and thei: reduced, Dg to f well-* the influx of indire- The condition of the ond ail that the .-lands must i readily suggest! er the rich] rilaad the working habiti tion ■ hav: pressed r. turn, the island ma . ;. 000.000 v ount of capital anc. for tin ntly the liquidation of t. >8paa- I Th jssity of the loan and the d is in detenu: has the aothoi ollateral. .r coming these uore than abundant in the 12 .1 i mii mii::, aentera of the world, where there la a oonstant clamor for its invest" in. 'in ii i i tte oi Interest more or leaa moderate, according to the security offered. h latruethal the Island la no1 yel constituted within the organi atiOn which ponds to the olaaaifii ttiona of oolonj Territory, or State, [1 baa not a gov- ernment whioh, like those ot the two last olaasiflcations in the Union, is vested with authority bo oontraot loans; Its condition ia that of a military occupation, and Its administration devolves upon the President is the absolute and supreme powej I'ui ii i iWli' authority, who is vested with all the faculties of the ■•>.. mm.', the legislative, and the ludioial powers of the American Constitution, can u. m Li!, the meana and resources to meet the wants of the people he governs aii authors ou public laws, and specially so those w booomment the great Ameri- can Constitution, agree on the principle that when a person or corporation is . barged with a dutj w la vested with some authority,in both rases they are sup- plied booarrj out the formerand toenforoe the latter, said meana mi ied iv the same pea ion oi corporation rendering the service and withnoothei responsibility than that whioh may be derived from the oonstitu- preoepts, [i the P Sent of the United St ites Is therefore empowered togovernand see the administrat on of the Island, it is a natural sequence that he is also vested with authority to employ whatever humus be taj consider proper and advisable to satisfactorily oarry on his funotions, If the requirements of the isUn\vl should oommand the Investment of us own revenues, they should be so n and if these reve • t sufficient on account of some extraordinary circumstances, and there are oo other indirect revenues a\ ailable, it is e\ ident that IS authority to raise a loan to be secured by the revenues intrusted to his direction i ,; | to oontraot a loan has been acknowledged, er- should be considered. The amount required to emergencies brought about by the present circumstances could be • this amount to be represented by bonds of $100 and $500, coupons, the rate of interest to be fixed at 4 per cent per annum, payable quarterly, but not in advance, either in this island or in New N - ! . ■ . - e returned in thirty years, but the redemption is not to begin until the sixth year after the issue of the bonds — that is, during the last twenty- vears in a pro] tot less than the amount corresponding to the divi- v the number of years or larger if the government of Puerto The redemption will be made by yearly drawings and . to a bank or syndicate for a consideration •oral security or guaranty to consist of all fl, especially so the custom-hot In regard to the investment of the loan, the board will not for the present deter- mine vmts, making this question the subieot of a special study. In the first 3 our opinion that a given amount should be turned into the public BOt of making up for shortness in the revenues or to imp.. -cart pub'. : (n the second plaee all the municipalities which •sire it and ask for it will be loaned money. The general terms of these lows: Ee : wen ty years, partial payments thereof to begin . year at a rate of inte i per cent per annum, payable every six moat S - he municipalities will be made when the number of these has ' ad upon, and those lacking the necessary conditions of life have aued. The thus furnished will be applied to the relief of • and out of town, the municipalities taking i structed be built in barrios more or less thickly setth ; locality, as w I on of - .-try halls - --. etc. In ied to the improvement and - daily of those who.. cultivation of - these funds will be ma . spai Banco Terriie . through any other whose capital may be wholly or in part devoted to loans on mortgage. Each mnn . vmined upon, that they - 3 - : observance of the following rules: Loans w.' ured by mortgages on country or city properties at 6 per .: annum : : sceed twenty years. :erms of paym. ss ■ . - be paid in advance. Settlement mus r annually, even though it has been agreed 13 that no payments on account of the capital will be made during the first five years of the loan. 3. Mortgages on properties will be admitted up to 80 per cent of the value of the land and establishments thereon. 4. In no case can the banks intrusted with making the loans and holding a mort- gage on a property which is to be increased receive in any way or shape or at a discount payments in advance of any of the pending obligations, unless the same transaction be simultaneously and in due proportion made in regard to pending obligations in connection with the new mortgage. 5. The bank will not charge the debtor any expense or commission, excepting the notary's fees for the drawing of the deed and its inscription and those that may be incurred in appraising the property. Should it become necessary to con- suit a, lawyer, this will be designated by the bank, and his fees can never exceed $25, to be paid by the debtor. 6. In making the distri bution of these funds the banks will act as the commission- ers of the island's treasury and will be duly empowered tojgrant deeds, make col- lections, cancellations, and any other documents in connection with the contract, but they can never go to court to exert any rights without a competent authorization thereto. 7. The banks are under the obligation of rendering an account to the treasurer- general of the island, or to such authority as may be determined upon, of whatever transaction they may be practicing, forwarding copies of all the documents. They will also render a statement of all collections made and of such obligations not paid thirty days after their maturity; the same remarks applying to the half yearly or yearly interest due and not paid. They will not be able to grant extensions without an express authorization therefor. All collections will be turned into the island's treasury. 8. The banks will only be entitled to a commission of one-half of 1 per cent on all amounts invested and one-half of 1 per cent on all amounts collected. 9. it will be the duty of the banks loaning money to coffee and sugar-cane grow- ers to procure the association or amalgamation of neighboring farmers in order to give rise to central factories, distilleries or stills, or any other establishments of common utility and application. 10. The b .nks do not assume any other responsibility than that which refers to the fulfillment of duties in a general sense, as provided in articles 1101 to 1104, both inciusives. of the civil code. The writers of this report were agreeable to all its points excepting that refer- ring to the amount of the loan, Mr. Egozcue having consigned his private vote, stating the loan should be increased to $15,000,000. Very respectfully, Fran'co de P. Acuna, Vice-President. M. Paniagur, Secretary. Brigadier-General Davis, Commanding the Department. Appendix 8. Project for ax Insular Loan and Disposition Thereof. general order authorizing an insular loan. 1. A general order shall be issued, authorizing the financial agents of Puerto Rico in the United States of America to offer for public or private subscription a loan of $ . the subscription to which shall be deposited with a trust company in the United States, in exchange for letters of allotment and certificates of deposit, pending tne printing and delivering of the bonds. 2. The general^ order shall state — (a) The period of duration of the loan (not less than fifty years). (b) The rate of interest to be paid (not more than 6 per cent). (c ) That the loan must be issued at par. (d) That the loan shall constitute a first lien on the present and future income of the island until repaid. (e) That the bonds shall be of the denomination of S . (/) That the bonds shall bear interest coupons maturing semiannually, payable in the city of New York. (g) That the loan 1 shall be repayable by a proportional yearly redemption of the bonds at par by drawings, the first drawing and redemption to be effected after the loan is floated. 14 (h) That the loan contract must contain a conversion clause. ( i) That Messrs. and are constituted a board of insular trustees to represent the island in its contract with bondholders and to sign the bonds. (j) That interest and redemption must be provided for in the annual budgets of the island. (Je) The approximate taxable value of the island according to data obtained by the ex-secretary of hacienda for use in the budget of 1899-1900. (I) The solicitor-general *s opinion as to the legality of the loan under existing legislation. A certified copy of this general order to be sent to the financial agents of the island in New York. The governor-general's signature thereto should be witnessed by the clerk of the United States provisional court. DISPOSITION OF THE LOAN. 1. The sum of $ shall be set aside for public works. 2. The sum of $ shall be set aside to make good the probable deficit in the current budget. 3. The sum of § shall be set aside for the payment of the first year's inter- est, the expenses of floating the loan and printing the bonds, and for other unfore- seen expenses. 4. The balance shall be employed as follows: As one of the principal objects of the loan is to assist agriculturists, and that aa speedily as possible, it would be advisable to make use of such financial machinery as already exists, if it can be done in such a manner as to allow the insular gov- ernment due intervention in the disposal of the funds and remove same from all taint of political influence. The Banco Agricola is an established institution which already possesses an extensive knowledge of the standing of the agriculturists of the island, and is managed on a purely commercial basis. A few additions to its statutes which could be suggested and authorized by the military government would undoubtedly convert it into the most ready and convenient instrument for the distribution of the balance of the loan in such a manner as to be beneficial to the agriculturists and profitable to the insular treasury, or, in other words, the people of Puerto Rico. I therefore propose that — A general order be issued authorizing the Banco Agricola to increase the emis- sion of its shares to the extent of $ (the balance of the loan), said emission to be taken by the insular government at par. The government shall then be allowed to name its representatives on the bank's board of directors in proportion to the number of paid-up shares of the bank held by it. The government would thus receive its proportion of profit earned by the bank, would at any time be able to dispose of the shares should these be quoted at a premium, and would, through its representatives, have proper intervention in the affairs of the bank without having to loan money directly to agriculturists, such being considered as outside the functions of national or state administration. The available lending capital of the bank would be nearly doubled by the issu- ance of mortgage bonds, which would find a ready quotation on the exchanges of the United States, especially if the bank were obliged to deposit an amount with some trust company as a guaranty for the titles of the holdings mortgaged as security for its loans. It is doubtful if the insular budget would at any time have to be burdened by making provision for interest on this portion of the loan, while it is very probable that the profit earned by the bank would go a long way toward paying the interest on the amounts employed in public works, etc. , or at least toward the partial amortization of the debt. Rules governing loans to agriculturists, both as regards amounts, term, condi- tion of payments, rate of interest, and other items, could be studied later and passed by the bank's newly formed board of directors at the first meeting held, A. Solomon. Appendix 4. San Juan, Puerto Rico, August 16, 1899. Sir: The undersigned directors of the Banco Territorial y Agricola of Puerto Rico, in accordance with the instruction received by us, respectfully beg to state to you the following: This bank is the only one in the country which has been organized in behalf of the agriculture, and to the same has devoted its capital. 15 Closely connected with the agriculture interests, no one but this bank is so well acquainted with the farmers, knowing their needs and also how far their wealth can be developed according to their resources. The dreadful hurricane of the 8th of this month, causing greater ravages than any other known in this island, imposes the necessity of facilitating without delay to the land owners the means of recovering their farms from the havoc suffered. The Government of the Union, and you as its worthy representative in Puerto Rico, as well as (you know) other leading citizens, are planning to obtain means to remedy their present conditions. Among them beyond doubt the most efficient would be a loan of from fifteen to twenty millions of dollars that would be made by the Government to the farmers on reasonable terms for reimbursement. In order to complete this project and to facilitate its being carried out, the Banco Territorial y Agricola would be the best qualified to serve as intermediary between the Government, which would advance funds on good securities, and the farmers, who would find it easier without doubt to deal with this bank, already established and devoted only to this kind of trade. This bank, by its way of doing business, similar to that of the Credit Foncier of France, makes its mortgage loans at terms of from six to thirty years, according to the conditions and security of the farms, taking a first mortgage on them, this business being carefully looked into by the board of directors, composed of men of responsibility and experience in commerce and trade agriculture. Secured by good mortgages, the bank issues mortgage certificates at an interest of 7 per cent per annum, which are paid with the collections from the farmers every year , These certificates have, besides said security of safe mortgages, the general guaranty of all the stock of the bank, which is obliged to make the collections and payments in due time, thus increasing more and more its credit. Considering what we have stated, the bank proposes to the Government to be intrusted to loan to the farmers the amount of said loan on the following condi- tions: 1. The bank, according to its statutes, which do not allow it to loan more than 40 per cent upon the appraised value of the property, will make the loans to the farm- ers on first mortgage, allowing them from six to thirty years' time and charging the same interest that the Government may designate, the bank being allowed a small commission for its work and expenses. 2. Secured by these mortgages the bank will issue mortgage certificates with interest coupons attached at the rate that may be designated by the Government, payable in the United States or in Puerto Rico. The redemption of said bonds will be made through a sinking fund, as provided by the bank's statutes, and will be made payable in the United States or in Puerto Rico by means of the annual pay- ments of the mortgagers. 3. The Government will gradually deliver to the bank the amount of the loan against or in exchange for an equal amount of certificates as transactions may be realized. Thus the Government, while perfectly secured by the mortgages of landowners and the subsidiary guaranty thereon of the bank, can come at once, and without delay, to the help of the island. As the bonds are payable to the bearer and they stand as a circulating medium, the capitalist in the United States will soon be interested in them, knowing the securities they afford, buying them as invest- ments, thus aiding the Government in the proposed loan. Another reason why our proposition should be accepted is that the land credit of the island, which is the base of Puerto Rico's wealth, would be increased and that undoubtedly the bonds issued by the bank would be bought by the European banks, contributing in this way to the prosperity of Puerto Rico. Very respectfully, VlCENTI ANTONITH, Enrique Delgad N. Oyauguren, Brig. Gen. George W. Davis. 16 [First indorsement.] Headquarters Department of Puerto Rico Advisory Board, San Juan, August 30, 1899. Respectfully returned to the honorable Brig. Gen. George W. Davis, commanding the Department, inviting his attention to the report on a general loan recently submitted by this board to his consideration, which covers all the points of the within communication. M. Panigua, Secretary. Fran'co de P. Acuna, Vice-President. Appendix 5. Ponce, Puerto Rico, August 25, 1899. Sir: The board of directors of the Credito and Ahorro Ponceno, a banking institution established in Ponce, believes it to be one of its most rudimentary duties to raise its voice to the honorable representative of the metropolis to coop- erate for the immediate upbuilding of the wealth of this island, which was so heavily chastized on the 8th instant by a cyclone in the daytime and by an immense inundation, caused by the overflow of the rivers, at night. It is needless for us to undertake to distract your attention with the details of the many disasters that have occurred, so much deplored by every man with humane feelings. The press furnishes daily official and public information as to the great losses caused by the cyclone and flood, which have done damage to such an extent that not a single inch of soil on the whole island has escaped the effects of its destructive power, besides the loss of many lives. Before a disaster of this nature the island of Puerto Rico finds itself unable to attempt to rehabilitate its wealth with its own resources, owing to its capital being invested in agricultural enterprises. The loss of the crops not only shatters all hopes of covering the financial obligations that weigh upon the agriculturists and merchants, but it is fearful also to consider the thousands of hands employed and who thus made their living for themselves and their families, and who must now remain idle, with starvation staring them in the face. This great evil must necessarily be avoided, and it is very urgent to relieve this worthy class of people, who may make an honest living by their daily labor, and we propose to accom- plish it hy placing the agriculturists on a fair working basis. The money reserves now existing in the native banks will soon be drawn to cover the deficit which results between the imports and exports of the present year, and with these reserves thus withdrawn the most horrible misery will prevail through- out an island worthy of a better fate. Before such a disconsolating perspective we can see only one way out of the difficulty, and it is to apply to the powerful nation under whose tutelage Divine Providence has placed Puerto Rico, and of which you are a most worthy repre- sentative, and to you, illustrious General, who have so often showed your great desire to lighten our burden, we address ourselves, requesting a helping hand to save our country from utter ruin. Persuaded as we are that the inexhaustible charity and generosity of our coun- trymen, as well as that of the American people and Government, will undoubtedly aid us freely with means to relieve the most peremptory necessities of these unfor- tunate people, still it is absolutely necessary to provide for the future. As things now stand there is but one way to assure this end, and that is to raise large sums of money to upbuild the country. This money can only be obtained by means of a loan, and with this view the board of directors, of which I have the honor to be president, has agreed so sub- mit the following suggestion, viz: To solicit from the honorable President of the United States or from the hon- orable Secretary of War the authority for the military governor of this island to emit bonds of §100 each, to cover the amount of from $20,000,000 to §25,000,000 gold, with the direct guaranty of the treasury of Puerto Rico, and further guaran- teed by mortgages on real estate of such owners as may make use of the loan. The terms for the repayment should be twenty-two to twenty-seven 3'ears, pay- ing in the first two years only the interest, which shall be at the lowest possible rate, not exceeding 5 per cent per annum; the capital after the second year, besides the interest. Taking into consideration the noble end for which this loan is intended, it should be equal, in a legal standpoint, to that of the taxes in accordance with the actual mortgage laws; that is, the legal mortgage in preference to any other that may be a lien upon the real estate, which is its direct guaranty, and the proceedings for the collection should be also the same as those actually in use for the levying of taxes. 17 This preference, far from causing prejudice to actual mortgage creditors, would benefit them, as the loan tends to restore to real estate a guaranteed value which it now lacks, and would become evident if they, unheedful of the dictates of pru- dence and humane sentiments, should resort to judicial proceedings to demand the payment of their capital. Aside from this, the postponement of their rights in exchange for the true increase in value of estates, will place them in better conditions to realize their credits, inasmuch as the privileged debt would be en- tailed at long terms and with so low an interest that, adding the interest to the annual payments, would represent a smaller amount than that of the usual and current interest in the market of Puerto Rico for operations of this kind. The loan is intended to rehabilitate agriculture in all its phases and to give it new life. In t,he general budget for the island would be included each year the necessary amount to pay the interest and installment of the debt, this amount being covered by those paid by the landowners who may make use of the loan. The treasury of Puerto Rico is undoubtedly capable of efficaciously responding to the loan, as there are no debts pending. The fact that in the years 1873-1889 it covered a loan of $11,000,000 for the abolition of slavery, making annual payments of §700,000, conclusively proves the extent of its resources. That debt was reli- giously paid by the taxpayers without affecting the progress of the country, not- withstanding the defects of the administration at that time. The general budget for the expenses of the island in the fiscal year 1898-99 amounted to §4.446,952.31, of which $2,631,000 were received from custom duties, $410,000 from -territorial contributions, and §240,000 from industry and commerce. Computing the taxes on the basis of 5 per cent of the net rent, it results that the $650,000 collected from the taxpayers was on a rent of §13,00J,000, which rep- resents a capital of §260,000,000, adding to that amount the value of public build- ings and other belongings of the State, province, and municipalities, which do not pay taxes. The last statistics (Balanza Mercantil). published in the year 1897, show the following amounts: v,!,,. Custom-house value - duties. Imports Exports SIT, 858, 063. 29 18,574,678.45 $2,481,962.57 241,310.10 Total 36,432,741.74 2,723,272.67' These data and those preceding demonstrate the solvency of the treasury of Puerto Rico and the guaranties which it is able to offer to the American people to assure the scrupulous fulfillment of the contract that may be made in its name with the sacred end for which this loan is intended. In regard to the legal conditions of the island as to this responsibility, it is unde- niable that Puerto Rico, being ruled by a military governor having discretionary power, under direction of the honorable President of the Republic and the Secre- tary of War, that there should be no insurmountable obstacles to its actual lawful chief representative assuming such responsibilities as are necessary to save the wealth of its people and to assure its future well-being. After this loan is realized the Government will agree upon the form for its most equitable distribution; but this board respectfully recommends that as coffee raising has been the most heavily injured and takes longer to be rehabilitated, it should participate in the loan in a larger proportion than other branches and industries. Trusting in the proverbial benevolence and in the repeated proofs of your love for this country, the board of directors of the Credito y Ahorro Ponceno requests, through me. that you may exert your influence to obtain the required authoriza- tion for the loan of §20,000,000 to §2o,000,000, and also for its most convenient placing in the markets of the metropolis with the urgency that the sad state of the country requires. If you do so, honorable General, you will receive the blessings of the present generation and your name will merit the remembrance of the next. Very respectfully, X. Mariami, President. Brig. Gen. George W. Davis, Commanding Department Puerto Rico. 13101 2 18 Appendix 6. [Military government of Puerto Rico, office of the civil secretary, San Juan, Puerto Rico.] Statement of Agricultural Wealth of the Island of Puerto Rico in the Year 1897. Stock raising in Puerto Bico in the year 1897. Cattle of all kinds. Number of 'iead. Price each. Price, total. 67,751 4,467 717 303,613 3, 055 5,779 13,411 Pesos. 30 30 30 30 5 4 5 Pesos. 3,032.530 134,010 21,510 6,072,240 10,275 23, 116 67,055 Total 8,360,736 Cultivation. FIRST DISTRICT. Town San Juan — Bayamon Carolina Dorado Naran jito . . . Loiza Rio Gde Rio Pdras . . . ToaAlta Toa-Baja Trujillo-AIto Caguas Aguas Bnas . Cayey Cidra Gurabo Hato Gde Juncos Comerio Total .. Num- ber of 365 1,264 625 232 481 555 462 1,013 380 275 366 728 472 778 500 976 1,083 520 378 11,453 Sugar cane, cner- das. 1 509 534 288 •> 1,114 245 499 136 649 36 607 ~~"~10' 4 723 469 758 13 6,597 Coffee, cuer- das. 40 303 1.311 3,348 938 220 823 74 1,064 10,657 To- bacco, cuer- das. 332 3 98 3 136 896 48 370 424 2 189 5 76 6 15 132 5 33 3 119 142 634 Grain, cuer- das. 38 679 526 166 1,048 896 498 775 369 154 398 1,603 '772 860 851 620 753 12,413 Other culti- vation, cuer- das. 336 340 29 73 339 652 92 226 92 14 65 92 113 106 132 20 1 5 142 Pas- ture, cuer- das. 2.859 556 21,632 19.272 7,289 6,784 20,408 16,088 22.321 12.052 8,215 11,256 20.957 10,060 16,004 16,338 12. 448 29, 910 11.815 7,924 271,335 Other pur- poses, cuer- 1,692 16, 199 7,639 5,915 7,914 8, 692 11,202 5,508 2,457 4,980 858 12,334 7,913 10,8:58 1,844 3,239 608 2,943 8,411 121,186 Total, cuer- das. 2,613 39,694 28,101 13,867 17,031 32, 132 28.551 39.523 15, 188 14, 027 12,655 35. 313 2(1,021 31,942 20,066 17, 603 32, 671 10.334 18, 449 425,681 Land valua- tion, pesos. 69,378 753,951 454, 008 223, 620 247,502 351,200 250, 154 374,501 109, 704 386,954 94, 849 449,998 310, 108 737,731 269,032 279, 820 210,578 183. 745 277, 535 6,034,368 SECOND DISTRICT. 3,068 518 792 707 1,606 558 449 ' 745 840 1.996 '687 539 994 3,409 420 176 136 389 1,477 509 37 5 33 113 ' 881 1,142 1,596 853 540 476 15,075 368 949 3,993 3,793 860 1.409 147 104 5I3 433 183 398 33 50 15 8 6 8 8 2 83 2,071 1,319 822 863 5, 874 745 646 1,995 3,098 1,474 1.013 '484 679 222 98 322 45 1,265 162 625 147 157 18 142 93 176 39,573 13.129 16:314 10.055 30,813 7,062 6,134 6, 069 12, 738 16,657 14,688 5,152 12,283 37,090 10,482 8,692 1,292 48,344 16, 436 10.672 27,450 33,643 8,300 7,596 10, 199 13,036 74,504 36, 633 37. 049 13, 155 101, 793 36, 300 19. 550 39, 698 43,439 37,349 24, 969 16,958 36, 505 1,185,374 Camuy H-. Hatillo Quebradillas Utuado Manati Barloiieta ' 348,306 450, 753 183, 388 3, 928, 963 586,216 399,062 807, 768 653, 766 231,046 Morovis Vega-Alta. Ve^a-Baja 496. 798 175,364 506, 464 Total . 12,501 8,716 30,163 1,668 20, 982 3,475 180,667 233, 131 467,803 9, 952, 167 THIRD DISTRICT. Aguadilla 658 1,517 1,587 788 1,622 1,135 418 1,082 223 30 307 172 33 310 332 6,098 1,860 4,158 26 2 336 7 5 2 1,427 1,228 2,514 1,938 1, 136 1.370 224 243 269 222 128 440 11,271 14. 150 19. 020 30.380 16, 541 37, 340 4,399 1,106 10, 749 1,949 10, 083 3,S16 17, 798 18, 181 34, 433 40, 620 30.063 46, 098 245,234 294, 940 Isabela 229. 409 1. 386, 278 Moca S. Sebastian 493.236 1,166,233 Total 7,307 2,232 12, 791 378 9,513 1,526 138,605 31, 163 186,207 3, 815, 330 19 FOURTH DISTRICT. Mayaguez 1,866 1,099 3,033 381 1,145 716 343 563 993 1,305 1,171 1,463 1,533 1,455 985 28 2 303 1 227 2,679 6,050 3,768 93 106 111 10,969 8,622 44 768 1,486 4 21 2 9 100 198 161 1,369 627 1,875 351 4.086 1.265 2, 147 1, 051 3,650 3,555 545 100 558 39 133 53 188 88 61 367 31,076 14,586 23,431 4,196 24, 714 14, 716 8,584 6, 534 15.758 23,715 3,492 5,117 11,056 351 7,562 3,905 2,751 28 2,791 2,217 33,707 24; 660 38,546 6,500 37,529 31,036 22 294 8^048 22,453 23,080 2,188,515 1,131,151 Cabo-Rojo. . Hormigs. --- Lajas Las Marias 641,147 273,550 493,106 2,395,742 1,189,216 120,888 Sabana Gde San German 396,835 1,132,764 Total 10,441 '.).*::; 31,017 496 17,976 2,031 157,300 39,270 257,923 9,963,914 FIFTH DISTRICT. 1,555 496- 663 789 2,165 227 141 1,040 1,098 1,546 2,001 6,417 30 56 4,213 '906 ■ 1,328 579 38 792 1,669 6, 259 2,618 1,206 1,580 3,551 333 2 2,098 8,809 1,787 4,452 4 &31 55 3 121 20 111 12 222 3,199 1,562 1,389 1,675 3,456 529 159 3,945 4,171 2,343 5,569 616 75 260 271 292 157 12 107 1,530 236 518 26,259 8,760 10, 607 24,340 43, 701 21.499 13.102 18,023 13, 593 15,138 33,549 23,288 7,953 8,856 25,094 6,582 20,492 7,052 7,662 16,911 10,111 18,011 66, 043 21,299 22,303 53,019 61,916 43,815 21,675 31,535 45,053 30,319 63,990 3,434,434 Aibonito Barranq'tas ----- Coamo Jilana Diaz... ,„ 434,693 538,479 663,134 1,504,357 633,539 Sta. Isabel. Guayanilla Adjuntas Feiiaelas _ 768,537 790,498 3,563.498 691,312 1,767,743 Total 11,721 16,028 32,594 839 26,797 4,074 227,571 152,013 459,955 13,789,103 SIXTH DISTRICT. Guayama Arroyo Maunabo Patillas 642 319 454 1,029 2,261 38 1,867 1,590 1,286 244 78 1,032 35 7 61 32 742 332 282 762 105 20 96 1,068 16,945 6,226 3, 653 8,105 18, 756 3,054 6,859 17,328 40, 130 9,921 12.896 29,917 1,029,585 214,512 249, 416 432,677 Total 2,444 5,756 2,640 135 2,118 2. 189 34,929 45,997 92,864 1,925,190 SEVENTH DISTRICT. Humacao Las Piedras 863 979 1.021 507. 367 632 ■ 530 189 1,614 319 2.260 2,386 959 978 452 3,426 20 198 198 279 62 1,559 181 37 10 20 1 i l 607 645 917 214 224 360 474 268 86 no 140 66 72 406 38 104 31, 793 16,395 16, 636 14,137 9,415 14,110 18,199 15,994 3, 259 2,333 14.397 3,585 3,907 8,134 6,798 11,109 26,416 20,010 34,568 20, 668 14. 646 35, 538 36,143 30,901 497,555 105,547 690, 737 Fajardo Ceiba.. Luquillo Naguabo Vieques 396,131 333,643 371,776 337,807 592.276 Total 5,086 12,394 2,497 77 3,709 1,023 136,679 53,513 198,890 3,215,472 RECAPITULATION. [11 cuerdas=1.0255+acres=lj 1 B acres, approximately.] Number of estates -- - - -- - 60,953 Sugar cane - - - Cuerdas. . 61,556 Coffee - - do.... 122,358 Tobacco --- do 4,227 Grain „ - do..-- 93,508 Other cultivation --- - do 17.176 Pasture - - — do.-.. 1,127.086 Woodland and swamps and barren - do 664, 270 Total. do-... 2,090,181 VALUATION OF LAND, AS STATED BY THEIR OWNERS, FOR TAX PURPOSES. Pesos. First district - 6,034,368 Second district - 9,952.167 Third district. — - - 3,815,370 Fourth district ..-. - - - --- 9,963,914 Fifth district - - 13,789,113 Sixth district- .— 1,925.190 Seventh district - 3,215,472 Total -- 48,694,583 I REPORT OF BRIG. GEN. GEORGE W. DAVIS ON INDUSTRIAL AND ECONOMIC CONDITIONS IN PUERTO RICO. Submitted December 15, 1899. WAR DEPARTMENT, DIVISION OF INSULAR AFFAIRS, 18 9 9. 21 supplementary report. Headquarters Department op Puerto Eico, San Juan, December 15, 1899. The Adjutant-General United States Army, Washington, D. G. Sir : Upon the industrial and economic conditions of Puerto Eico I have previously reported at some length. The very distressed situ- ation of the island, as left by the tornado of last summer, and its need for financial help were made the subject of a special report, dated September 5,last. The time elapsed since that paper was sent off has been devoted to attentive study of the needs of the island, and I have felt constrained by a sense of duty to present these farther remarks for such consideration of the Department as they may deserve. In the early days of September, when the referred-to report was written, I was in the midst of the relief work. As then stated, full data respecting the extent of the destruction and suffering was not available. During the past three months, by personal observation, reports of personal investigations by military officers, and verbal statements of proprietors, investors, and other close observers, I have secured the data for a partial revision of my former figures and of the text of the conclusions then presented. As respects the number of persons who on August 8 lost all, or about all, but their lives, the original estimate was close to the truth; that is to say, the numbers of the class referred to aggregate about a quarter of a million. Nor was the extent overstated to which they were victims. In one particular, however, it was understated. These poor peones were left without the material (palm leaves) with which to rebuild their huts, for the tornado decapitated every palm tree in its path. Fortu- nately, the climate is mild, and the suffering from a lack of shelter was slight. It was only the sick who really suffered, for they had no pro- tection from the summer rains. Medical service was deficient and medicines unobtainable at first. There are no hospitals and could be none save those that the board of charities improvised. The destruction to roads was rather more than I reported, above $100,000 of insular revenues having been already spent in repairs, and as much more will be required to reconstruct and rebuild. Some impor- tant bridges must wait until next year. Tobacco suffered very little, but the loss of the Cuban market had already disarranged planting, and as the crop had been harvested, there was no growing crop to injure; but the tobacco laborers suffered to the same extent in loss of huts, provision crops, etc., as all other peones. Sugar cane was greatly injured by overflows and sedimentation, but was benefited — i. e., fertilized — by the same for future crops. There was extensive injury to sugar mills, some of which, being old and obsolete, will never be rebuilt. 23 24 The cane which will be ground next spring may produce about 45,000 long tons of sugar, against an average of 58,925 long tons for the last live years of Spanish domination. These figures of cane products are obtained by taking actual exports of sugar, as given in official statistics, and same for molasses, counting 1 ton of sugar for 2 tons of molasses. This is done so as to bring the molasses to a basis of sugar value. The crop for export for the calendar year 1899 is closely approximate. The custom-house figures for exports (official) from American occupa- tion (which varies at different ports from July 28 to October 18) to September 30 show, of sugar and molasses, 44,310 long tons, the latter computed at 1 ton sugar for 2 of molasses. The opening of one or two new sugar mills, which were building before the storm, may maintain next spring's tonnage at the aggregate of the last year's crop for export, or, say, at 45,000 tons. This crop of sugar at this year's prices — about 80 pesos per ton — should therefore bring an income to the island of 3,GOO,000 pesos, or $2,160,000, as a maximum. In my report of September 5 I stated this at 5,000,000 pesos, and in report of September 30 at 60,000 tons; but revised and better studied figures give but $2,160,000 as the value of the sugar for export. In September I also estimated this year's coffee crop at 33 per cent of a normal one, or, say, 18,000,000 pounds, or about one third of a normal output; but it appears that this estimate is not borne out by experience. What the tornado spared has now been harvested, and very careful and close inquiry reveals the fact that the yield varies from to 33 per cent of an ordinary crop. I can find no well-informed person who believes that the total yield for export will exceed 10 per cent of a normal crop, the average having been for last five years of Spanish domination 23,732,078 kilos, official figures. Of the crop harvested last winter and exported this year, the cus- tom-house officers report 29,487,329 kilos, which is somewhat above the normal export. It is conservative to estimate the total of this year's growth available for sale abroad at not more than 3,500,000 kilos. The average of prices obtained for coffee during the five years re- ferred to was 51.9 centavos per kilo, or 23.6 centavos per pound, which is equal to 14^ cents gold. The loss of markets, and especially the Cuban, reduced the value of coffee to the producer to about 9 cents gold; but the restoration of the Cuban market, by recent Executive order, has practically restored the price, so that what remains on hand of the former crop and what may be sold from the one of this year will bring an average of about 12 cents, gold, per pound. Taking the salvage from the hurricane at 2,273,000 kilos, or 5,000,000 pounds, it is readily seen that for this year the insular income from coffee will be only $600,000 instead of the normal figures of over $6,000,000. My original opinion that the crop would fall off but two-thirds was based on the opinion that certain somewhat sheltered regions would give a half or two-thirds crop, and that other localities would make a showing of from a quarter to one-half, for enough berries were left on the bushes to justify this opinion; but the hope has proved illusory. The berries that survived have been largely blighted,, and as the necessary shade was gone, the direct rays of the tropical sun scorched and shriveled the green fruit, and much of what remained was worth- less, and the harvest is most disappointing. There are hundreds of coffee groves, indeed thousands, where no more remains than will suffice for home consumption, or none at all ; and 25 in the least exposed groves the quality is poor and the quantity is disappointing. I shall be agreeably disappointed if the harvest surpasses 10 per cent of a normal crop. A few sanguine persons have expressed the belief that the percentage may reach 15. The only other crop of magnitude that, exported, yields a revenue to the producer is tobacco. During the last five years under Spain the exports averaged 3,938,052 kilos, selling for 750,809 pesos, or 19.4 cen- tavos the kilo, which is equal to 5.3 cents, gold, per pound. The poorer grades went direct to Europe, netting the producer 4 to 6 centavos per pound, and the better to Cuba, realizing from 25 to 35 centavos; but this market is now closed by a prohibitive import duty of $5 per pound. Exported to the United States, the better grades pay a duty of $1.85 and the poorer 35 cents per pound. Duties on tobacco are high in European countries, and as a consequence of these high taxes in all markets there is little commercial movement for this important Puerto Eican product. In my cable of August 28 to the Assistant Secretary of War I esti- mated the tobacco then in the island at 4,000,000 pounds, which is about a normal crop'. Since then some of this has been sold in Europe, a little in the United States, in leaf or manufactured, and a little has been exported to Cuba. The American Tobacco Company has lately bought the largest manufactory here, and the new management is understood to be arranging for a larger trade with the United States, the product of manufacture to be in the form of cigarettes. The ever-recurring hope on the part of the inhabitants that there will soon be free trade with the United States, combined with the fact that some American capital has been invested in this industry, has stimulated the tobacco interests somewhat, and the planting of the new crop now going on will, contrary to my formerly expressed opinion, be of somewhat more magnitude than that of last year, probably yield- ing at least a normal crop of 4,000,000 pounds; and, at present prices, this would net to the producers about 750,000 pesos. The custom house returns show exportation since Spanish evacuation to September 30 of three and a quarter million pounds of tobacco, which includes some old stock of 1898, and this has brought returns to the farmers of about $200,000; while the unsold residue now in the island may raise the total income for the sold and to be sold, i. e., the whole crop of 1899, with residue from 1898, to perhaps $400,000. In my cablegram of August 28 I said that next year's crop would be less than for this year; but the hopes of free trade with the United States and other causes, previously adverted to, have so stimulated planting that account may reasonably be taken of a harvest equal to the normal. The foregoing as respects the reasonably certain output for this year of the three great staples, and giving also the average export under Spain for five years ending 1897, we have the following: Staple. Estimated value for export. 1899-1900. Actual average export. 1893-1897. Reduction. $600, 000 2, 100, 000 450, 485 $6, 080, 409 2, 403, 963 450, 485 $5, 480, 409 303, 963 Total 3, 150, 485 8, 934, 857 5, 784, 372 26 Here, then, is a presentation of the facts, as I interpret them, regard- ing trade conditions. The principal falling off is in coffee, which, as a commodity for considerable export, will not exist. This year's output of the three great products, compared with exports of the last five years of Spanish control, shows a falling off of very nearly Go per cent of the insular wealth available for current needs. The island has a few minor resources, but the aggregate of all exports other than the three staples amount to but a few hundred thousand dollars, and some of them are showing greatly diminished quantities and values. The most important of these are live stock, but the exportation ot beef brings another evil, an enhancement in the local value of fresh beef, so that it is quite too costly a food save for the well-to-do classes. But the appalling diminution in exportable goods is not the worst feature of the existing situation. Credit is absolutely gone for all, save the sugar and tobacco producers, who have visible security. While the present price of sugar yields a margin of profit, there is little confidence that the ruling price will be permanent, unless the trade conditions are changed for the better. The best grades of cen- trifugal sugar sell for about $50 per ton net to the producer, but not more than half the cane products are of this grade. The muscavado sugar commands but about $40 per ton, or a little less, and at this price there is little or no margin of profit. It is only the large, central establishments that are now prospering. The sugar output touched its maximum in 1870, 170,000 tons, while last year it fell to less than 45,000, or but a little more than one-fourth of the maximum. Very large expenditures in new plants and in restoring cultivation must be incurred before the sugar output can be increased, and this can not be made for the present. The coffee fields, now smothered in weeds, uprooted trees, and debris of the storm, can not be cleaned and rehabilitated without capital, and this can not be secured. This year's sales of home productions in these commodities will bring returns of but about $3,000,000, whereas the island is accustomed to receive almost $10,000,000 for these same products, and there is nothing to replace them. The condition of more than half the inhabitants has always been one of abject poverty. It is not difficult to foretell the consequence of the obliteration of two-thirds of former means of subsistence. It is doubt- ful if any land or district populated by nearly a million souls has, in modern times, been so devastated and overwhelmed as was Puerto Eico in one day of August last. Heretofore coffee represented 70 per cent of the island's trade, but the next crop will probably not exceed 6 per ceut of that value — the aver- age of which, for the last five years, having been over sixteen and a half million pesos, representing the value of exports of the three principal commodities. The industrial depression falls heaviest upon agriculture, for the island has no other source of wealth. To some extent this presses upon the cane growers and sugar makers, first, because in many cases they have only obsolete machinery for fabrication, and, second, because the mills have been overturned or injured; but the heaviest depression is with that all-important industry, coffee culture. It is a melancholy fact to state, but it must be stated and weighed — there is not one coffee finca in twenty, and not more than one coffee proprietor in twenty, who is not bound hand and foot financially, so far as the present situation is concerned. While in a great many cases the coffee bushes are not so 27 disabled that they are past redemption, yet the power of redemption is gone. The land is left, most of the bushes remain, much of the shade is not wholly or permanently destroyed, an abundance of labor for rehabilitation and cultivation is at hand and clamoring for employ- ment at customary wages, yet complete paralysis exists; and this is due to the fact that credit — the life of all modern commerce — is totally destroyed for this industry save for a very few well-to-do owners. Aided zealously by those under my orders who are charged with the application of the food relief donated by the United States, and after most careful consideration, a method of relief was conceived that it was thought would insure not only relief for the destitute but at the same time aid for the landed proprietors, who are the customary employers of the laborers. The scheme is outlined in the circular herewith, to which is attached a memorandum showing the extent to which this form of relief has been applied. While the method is being successfully installed and executed, it does not accomplish all that the acute necessities demand. The pro- prietors have come forward in very large numbers with appeals for assistance, but rigorous investigation in each case is imperative, so as to assure that the true facts are known and the statements verified. But since the proprietor has no means of paying wages, and can obtain none, the workmen are much less efficient than they would be if a cash remuneration were included, so the effectiveness of the labor is much impaired, and not a great deal in the way of clearing up the coffee groves can be accomplished, or but very small areas can be cleaned. The knowledge that wages can not be paid until quite a year has elapsed, and the fear of the proprietors whose property is already mortgaged and in arrears for interest and taxes that the owners of the mortgages will probably foreclose as soon as they have the power, discourages the proprietors, who do not know that they will to morrow have even an equity in the property. So very little confidence or hope is felt by those most deeply interested, and when there is no hope there is no zeal or energy. "What is the use," they say, "of trying to fight against the inevitable? The mortgagee will soon have the land. Let him do the clearing up and restoration." The statistics available as to the number and extent of coffee prop- erties are not of much value, and the data at hand do not give the valuation of these properties. Included in the census returns of 1887 there are some figures that may be taken as approximate only. The declared valuation of all the landed property in the island is there given at 28,867,929 pesos ; but this is not believed to represent more than one-eighth of the real value of the agricultural wealth of the island. (See record of mortgages herewith.) The records of the registers of property show that on country prop- erty the mortgage indebtedness at the end of 1893 amounted to over 26,000,000 pesos, but I have not yet been able to assure myself if these figures do not include a large number of incumbrances that have been lifted. I believe that this is the fact, but can not yet positively assert it. Bankers and other investors have told me that the total indebtedness of the coffee proprietors, including secured and unsecured debts, amount now to not less than $8,000,000, and nearly all are debts over- due. The sugar lands, which are in the same condition, will, it is esti- mated, amount to two millions more. I am quite willing to accept these figures as indicating the volume of the obligations of the agricultural properties, all of which are in jeopardy. 28 The year of the war was, necessarily, one of uncertainty and hazard. Capital, which is proverbially timid, was withheld froii those who needed it most, or, if given, the conditions were onerous. If exten- sion or increase of loans were then secured, the bonds were tightened by the grantor and the grantee's liberty of action was correspondingly restricted and curtailed. During the period of hostile operations and following, bandits and outlaws raided the island. Great quantities of coffee were forcibly taken, houses and mills burned, and the people terrified. The sufferers could not secure financial help, and the economical situation of these people became desperate, and so continued after peace and order were established. By the disturbance of trade conditions, and by the war itself, com- mercial and social conditions were greatly disturbed. Laborers and pro- prietors were so terrified that industrial work was curtailed or stopped. The currency of the island was discredited, exchange was high, and trade and agriculture languished. It followed, as a natural consequence, that the accustomed volume of coffee, sugar, and tobacco were not pro- duced. Statistics of exports from and after June 30, 1897, to the Ameri- can occupation have not been compiled, so it is not known what was the extent of the reduction of exports, but the falling off must have been considerable. A part of the exports reported above for the period since the American occupation included commodities that would have been exported and reported before June 30, 1898, had there been no war. Coupled with this social and economic disturbance came the loss of important markets, especially Cuba and Spain, which circumstances increased the commercial depression. The military government did all possible to relieve the situation. Trade was made much freer than before. The free list was largely extended, local-consumption taxes were removed, tonnage taxes were no longer collected, and the duties on several important articles of insular use and consumption were greatly lowered. The local military expenditures were large, which put much money in circulation, and local purchases or engagements of commodities and services for military use somewhat relieved the depression, but the enonomic situation after six months or a year of American occupation was much worse than before the troops landed. This is my conception of the industrial situation as it existed at the close of the fiscal year 1898-99, but business was adjusting itself to the new conditions, a few new sugar mills were going up, larger areas of cane were being planted, and the coffee producers had confidence that the crop of 1899 would exceed by 7,000,000 kilos the crop of 1897, which sold for over $7,000,000; but all this was changed in one day, for on the 8th of August last this confident hope was changed to the most gloomy discouragement or almost despair. The gro wi n g provision crops of half a million people were destroyed, the shelters of a quarter of a million were blown away, the roads were washed out and obstructed with landslides and debris, 2,700 people were killed, besides many thousands of cattle, and, finally, the coffee crop for 1899, worth proba- bly 15,000,000 pesos, was practically blown out of existence. About one year ago the gloomy situation of the proprietors who were so heavily in debt was brought to the attention of the military gov- ernor, the late General Henry. The extent of their indebtedness, which consisted of matured loans and those soon to mature, was stated to him as very large. It was also pointed out that a great many fore- closure proceedings of agricultural properties were then in progress. As military governor of Puerto Rico, which was then held as territory 29 conquered from Spain, between which, power and the United States a state of war still existed, General Henry was asked to forbid the fore- closure of mortgages for one year, so that the disturbance in economic and industrial conditions could have time to pass away and disappear, which all believed would be the case within the period named. They counted upon a good harvest and hoped for and expected that very soon the trade conditions of the island would have been adjusted so that better prices could be secured. The investors, credit institutions, and mercantile houses represented to the general that while those interests could probably be so adjusted that the proposed disturbance of contract obligations would not very seriously embarrass them, yet they also pointed out that the general effect upon the borrowers would not be an unmixed blessing, for the arbitrary interference of the supreme government with the validity of contracts respecting secured loans would tend to so unsettle and dis- turb the relations between the borrowers and lenders that the latter would hesitate or refuse to make the further advances which would certainly be asked. After full consideration of all the facts and circumstances the gen- eral decided to prorogate the foreclosure of mortgages, and on January 19 signed an order to that effect. It was immediately published in the Official Gazette of the island, and appears also as General Orders, Xo. 18, under date of February 12, 1899, Headquarters Department of Puerto Rico, copy herewith. The order was thoroughly respected, and the result has been that since its promulgation no foreclosures have taken place and the equi- ties of all parties interested have remained undisturbed, but the year's interest in many cases remains unpaid. The publication of this order is understood to have been an arbitrary exercise of the power of the military commander and warranted by the laws of war, but at the time of this transaction commissioners repre- senting the United States and Spain were sitting in Paris and nego- tiating a treaty of peace between the two Governments. The treaty was signed by the commissioners on December 10, or more than a month before General Henry ordered suspension of mortgage foreclosures, but the exchange of ratifications of the treaty by both Governments was not effected until April 11, 1899, on which date this treaty became the law of the land. A phrase of the second paragraph of Article VIII of the treaty of Paris is as follows : And it is hereby declared that the relinquishment or cession, as the case may be, can not in any respect impair the property or rights which by law belong to the peaceful possession of property of all kinds, of provinces, municipali- ties, public and private establishments, ecclesiastical or civic bodies, or of any other associations having legal capacity to acquire and possess property in the aforesaid territory renounced or ceded; or of private individuals, of whatsoever nationality such individuals may be. It seems to be clear that had the Paris treaty been promulgated at its date, or on any date anterior to the time of publication by General Henry of the mortgage order, then the order in question would have been illegal, as in violation of a law of the land, i. e., the treaty, admitted and recognized by both Spain and the United States, and by its terms made applicable to Puerto Pico. As before stated, the order was a war measure, and related to a period of time when, in a technical sense, a state of war between the two coun- tries was continuing. Xo question has been raised, so far as I know, involving a judicial determination as to the validity of the order after 30 the promulgation of the treaty, but it seems to me a matter of doubt if the courts would have upheld the order after April 11. It is, however, clear that whether or not the vitality of the order suspending foreclosures was continued after the date last given, it would be clearly illegal now to extend its provisions. I have been appealed to to make a further prorogation and also not to make it. In order that there should be a clear knowledge of my conception of duty in the premises, I have made public announcement of the fact that there will be no extension of the provisions of the order respecting mortgages which the military governor issued in January of 1899,, (See copy of announcement herewith.) The deplorable industrial condition in which the island is, and the release from restraint of those who had power to foreclose and take the properties representing many millions more value than the secured debts, and which surplus of value the owners can not protect, will bring about a situation in Puerto Kico compared to which the present, bad as it is, will be easy and comfortable. A large part of the mercantile and exporting houses are owned and conducted by Spaniards, men who, under the treaty, preserve their Spanish nationality. A great many of the natives who are in debt — and almost every one who could secure credit is in debt — are at the mercy, so to speak, of these creditors. The seizure of these farms by the money lenders, who are often hated only because they are Spaniards, will, in the minds of some, be regarded as confiscations, although done in the name of and under the sanction of the law. The robbery, pillage, and incendiarism which have been adverted to as accompanying and following the military operations were largely based on this hatred, I am told. I hope the foreclosures soon to occur will not cause a revival and recurrence of the former lawlessness. Of course it will be repressed, if there should be an attempt to rob, burn, and destroy. I merely allude to it as a possible occurrence. I have no doubt that the alarm in some cases is groundless; certainly in many cases the creditors will make arrangements with former owners, and since the properties will be valueless unless worked, it will be to the interest of the new owners, or those having the power to secure titles, to arrange for advances, either as additional loans or as working- capital to clear up and cultivate the coffee lands which now are rapidly becoming only tropical jungles — the weeds and trash already over- topping the coffee bushes. I do not think the aggregate of these mortgages, as compared to the former value ot the lands, is excessive. The trouble is that now the lands have no cash value. Nobody will buy at any price, and a great many wish to sell. Attempts at tax sales have sometimes not resulted in a single offer. In time, of course, all this will adjust itself. Soon a permanent gov- ernment will be created, one possessed of powers to legislate and govern, and which will be respected as the regularly constituted authority. When this is consummated confidence will take the place of doubt and distrust. Enterprises will be started or resumed, capitalists will find how to secure their investments, and, if with the legislation establish- ing a government comes the hoped-for grant of free trade with the United States, cane and tobacco culture will be extended. Fruit cul- tivation for export will be taken up, and perhaps agriculture can be diversified in many ways. Cacao is cultivated profitably in other lands ; so, too, are rubber and hemp ; but nothing can now be initiated through individual effort, for everything is beset with the difficulties adverted 31 to. The crux of the whole matter is that the municipalities, the coffee proprietors, and some caue owners are without credit. They are abso- lutely powerless to secure any linancial assistance from insular or exte- rior sources, and are doomed to inaction, decay, and disaster unless help be given. The trade conditions are well illustrated by the receipts of the custom- houses. For the first five weeks after July 1 the receipts from customs were $ 174,537, and for the last preceding five weeks the total was $84,828, a falling off of more than 51 per cent in the second period. Perhaps one-fifth of this depletion of the revenues may be due to the extension of the free list on my recommendation, but certainly the largest part of the loss is due to the industrial depression. The effect of this reduction of income upon the revenues of the island will of course be -very marked, and embarrassments seem certain to occur. The general situation of the finances for the first five months of this fiscal year is shown by the auditor's statement herewith,wherein are set forth in some detail the receipts and disbursements. When the annual budget was prepared, the expectation was justified that from imposts of all kinds and miscellaneous receipts, except back taxes; $465,000 would be collected. In September these figures were revised and reduced to $300,000. An income from back taxes due under Spain, but remaining uncollected, of $100,000 was counted on; but it is now evident that not more than a moiety of the sums relied on can be secured. The prostration in business has left the taxpayers without resources, and there is no practicable way of collecting what is due save by seizure of the property, but such a course would not secure the taxes these properties owe, for, if offered for sale, buyers could not be found. Forcible seizure at this time would be a great hardship, and such seizure I would decline to order, as it would amount to a confiscation and be an added hardship to the burdens which are already overwhelming in a great many cases. /it is currently reported that the President has recommended to brnigi'ess the removal of all trade restrictions between this island and the United States; also that a government be immediately established that will possess all the requisite attributes for conducting the affairs of the island the same as a Territory or Stater If the change in status involves the application to Puerto Eico of the United States revenue laws— internal and customs— then the prin- cipal source of revenue that Puerto Eico has relied on will be lacking. A thorough revision of the present system of taxation is demanded. The need of it is most urgent, but as this is a matter of the greatest importance I have not felt that it was my duty as a temporary custo- dian of the island to enter upon such an undertaking. I have, how- ever, given to the subject very earnest thought, and have studied it as opportunity permitted. If the island is to receive no direct benefit from customs and internal- revenue taxation, then the local expenditures must be provided for by property and income taxes, as in the States of the Union; but under the existing conditions not one-quarter of the revenue needed to carry on local government, insular and municipal, can be collected through present machinery and under existing laws. The laws must be revised and the machinery set in motion. The combined insular and municipal Puerto Eican budgets for the current year aggregate about $3,500,000. Certainly, if the million people here are to have the advantages and privileges which inhabit- ants of the States of the Union enjoy, the revenues must be doubled 32 or trebled. The present tax rate per capita is about $1.75, while the smallest tax rate per capita for population in any West India island (except Cuba, for which data are lacking) is $4.50, and the highest $11. 'i 8, which applies to the island of Trinidad. Other rates are: Curacoa, $4.01; St. Thomas and Santa Cruz, $7.43; Guadaloupe, $7.24; Martinique, $6.66; Jamaica, $4.69; Barbados, $4.73; The Leeward Islands, $4.75, and British Guiana, $8.55. These figures include taxes of all kinds, including customs and export taxes, etc. Assuming a tax rate of $5 per capita for Puerto Pico, and population of one million, the levy should amount to five millions, two-fifths of which would be required by municipalities and the remainder by the central government; one million of the latter amount would go to schools, another to public works, leaving one million for the insular government proper. But it will be several years before a system of taxation can be devised and applied which, without counting customs and internal revenue, such as in the United States inure to the Gen- eral Government, will yield any such returns as these. When the island is exporting twenty millions or more in value of home production, which it should be doing in five years, the economic conditions will easily permit the raising of a local revenue of $5,000,000, but the interval of time will be one of great financial difficulties for the govern- ment, and the only remedy I can suggest is a loan with which to tide over this period. In my report of September 5, I indicated the probable deficit based on the assumption that the expenses be limited to $1,750,000, and that there be no income from customs and excises, etc. The amount above stated included nothing for municipalities and was the least with which it seemed to me that the government proper could be carried on, unless allowances for public works and schools were cut off or reduced. Those figures still stand as an expression of my best judgment of the situa- tion, which it should be understood takes note of the supposition that municipal expenditures would be covered by local and town taxation. The foregoing sets forth my conception of the present financial con- dition and my judgment regarding industrial affairs, but in respect to the latter it is difficult to conceive of a more unsatisfactory situation. By a calamitous incident the island of Puerto Pico upon the morning of its new life is deprived of 65 per cent of its resources. The proprie- tors are without credit, and the present temporary government is unable to^apply a remedy or afford relief. \At this time it may be assumed that the National Legislature is con- sidering the important subject of a form of government for Puerto Eico. Supposing that question settled and a government authorized conform- ing to the United States territorial type, or to some other form such as the President and Secretary of War have been pleased to recommend, the question may be asked, " What would be the economical and indus- trial condition, supposing that there is no provision included in the organic law for solution of the financial difficulty ?" The answer must be that the recovery will of necessity be slow, and the difficulties and embarrassments very great. The new government must take some time to organize, and when installed will be confronted with the necessity of taking up at once the subject of revision of tax laws, upon which there must be legislation. It is to be assumed that the organic act will make clear whether or not the island is to maintain its own custom-houses and exploit the internal revenue so it will not be beset with the uncertainties which confront the present government. 33 But meanwhile, the agricultural conditions, if remaining unaided, will be going from bad to worse. Unless the weeds and trash in the coffee groves are suppressed, the fruitful bushes will be smothered and killed, or so greatly damaged that they must be uprooted and others planted. The laborer will be idle and the island will retrograde. The new government will probably be obliged to borrow in order to maintain itself, and this will be a matter demanding immediate action; but no matter how soon that action be taken, it will not be in time to save the coffee culture. It may be toward the close of the session before Congress will definitely act, and all this time will be days of waiting and anxiety, for nature will be constantly aiding in the relapse of the coffee groves to tropical jungles. Free trade with the United States will give a great stimulus to agriculture, and specially to sugar and tobacco ; but this will not affect coffee, which is already free. The general stimulus to other cultiva- tion will perhaps have a detrimental effect upon coffee. If a largely increased acreage be devoted to these crops for which free trade is desired, there will result an increased demand for labor, which will be drawn from the high interior and other regions where coffee only is now largely produced. If a scarcity of labor results, an increase of wage rate must be expected ; an increase which sugar producers can well afford to pay if they secure as an advance to present selling price what is now contributed as United States customs duties, i. e., say $35 per ton. The sugar growers will then be as rich and prosperous as are now the Hawaiian planters, and as high wages can well be afforded here as in the Sandwich Islands; but coffee can not be cultivated profitably at all on a basis of higher wages than are now paid — that is, 30 cents per diem for men and 20 cents for women. If the current wage rate should go to 50 cents (gold), coffee culture, at present prices of the product, must cease altogether. The result here suggested as possible is exactly what did happen in Cuba when, fifty years ago, considerable coffee was grown for export, but which is not now because labor is too expensive, and cane culture is much more profitable. In short, the condition of the coffee industry is one of great jeopardy; conservative estimates justify the opinion that were abundance of cap- ital and labor now available for reparation of the damage, next year's crop could not reach beyond 40 per cent of a normal one. In my report of September 5, I stated that the only effective remedy for the situation was an insular loan of say $10,000,000. The papers then submitted contained several projects by disinterested and inter- ested parties, outlining plans for the raising of the money and placing it. I favored the issue of paper money, so secured by real estate of ample value that the bills could and would be maintained at par. The most conservative sound-money advocate could not oppose the issue of fiat money more strongly than does the writer. I know that this island has unencumbered resources sufficient to maintain $10,000,000 of paper at par with gold, and do this as certainly as the United States its greenbacks and national-bank bills. But it matters very little what method be adopted for raising the money, so it be raised and soon available. Unless financial help be given to Puerto Rico very soon, the present temporary difficulties will, I fear, become permanent, involving the loss of a business worth six or seven million dollars, which surely is worth an effort to preserve. As to the ability of Puerto Rico to secure thoroughly such a loan, say for ten or fifteen millions, I think it is capable of easy demonstration. 13101 3 34 The real estate of the island is worth $150,000,000. The island has no debt — a very fortunate circumstance. The municipalities have cur- rent obligations, about one-half of which are secured, amounting to about $1,500,000 in all; but the town governments are nearly all badly administered and have been for a long time. These corporations are administered by men who, in a great many cases, have not the con- fidence of the people. The town councils can not float loans, and large sums of money should not be intrusted to them, if they could raise it. Elections have been or are being held all over the island for munici- pal officers, but the results so far secured, in some twenty towns, do not encourage the belief that the elected councilmen will be more effi- cient and reliable than the men they replace. Any money raised, or loans placed, should be in the name of the gov- ernment of Puerto Rico, and, if duly authorized by Congress, should be placed at 5 per cent or even less interest. As showing what has been done for other tropical islands in the West Indies by the supreme governments of these colonies, I will mention some figures of official origin: The total population of the British West Indies is, according to latest accessible figures, 1,7.10,978, and the debt of these colonies com- bined is $23,533,862, or the per capita debt is $13.75. This per capita for British Guiana is $16.53, and for Trinidad is $17.56; while Jamaica, with population of 700,000, owes $13.09 per capita. The Jamaican imports in 1898 were $8,081,913, while the exports were $7,049,089, making a total exterior trade of $15,131,002. I have shown that the annual exports of Puerto Rico were, for five years before 1898, above $9,000,000 annually, and that the imports were about the same, or a total of $18,000,000 exterior trade. Surely, if Jamaica can sustain a burden of $13.75 per capita, 98 per cent of her inhabitants being negroes, then Puerto Rico, nearly two-thirds of whose population is white, can carry a debt of $10 per capita. In 1892 the island of Mauritius, in the Indian Ocean, was struck and wrecked by a hurricane, just as was this island last August. This colony of England has a population of 370,000, about 70 per cent of whom are "coolies" and other East Indians. Its area is 705 square miles, or less than one-fifth the size of Puerto Rico. Its debt in 1897 was $6,741,104, or over $18 per capita. The cyclone of 1892 brought universal havoc and distress to the sugar industry in Mauritius, which is nearly the sole reliance for the inhabitants. The Government of Great Britain came to the rescue, and guaranteed the interest at 3 per cent on an insular loan of 10,000,000 rupees (or nearly $5,000,000 local currency), and this money was applied to the repair of the losses by loans to the proprietors; but the actual loss from the hurricane to the exports of the island was less than 50 per cent, a fact proven by the trade statistics, which show no greater ratio than that of falling off in the sugar production, while the loss in Puerto Rico from a similar cause was 65 per cent, as shown above. This financial aid to Muaritius set all the wheels of industry in motion, repaired the damage, and the sugar crop, which in 1892 fell to about 60,000 tons, recovered to the normal of 100,000 tons the next year, and in the year 1898 reached its maximum of 180,000 tons. I think I am justified by the facts, palpable to all who seek for them and by the teachings of history, in the opinion that the same splendid result would follow a similar remedy applied to Puerto Rico, but that the remedy to be most effective should be applied immediately. Every day adds to the difficulties and discouragements. 35 I do not recommend the guarantee by the United States of a loan for the island. It does not require it, for nearly 4,000 square miles of rich soil, inhabited by a million people who have had an exterior trade averaging over $18,000,01)0, do not need a guarantee. The pledge of the island alone should be sufficient, and I am assured by financiers that investors would immediately subscribe for this loan at low inter- est the moment it was simply sanctioned by the United States. I will not describe the machinery for applying the credit that would tli en be available. Thereareold and highly respectable banking houses here whose facilities could be availed of, or commissioners appointed under Congressional authority could take the matter in charge, and they would see that the requirements dictated by law and prudence were fully observed ; but if nothing can be done before a new govern- ment is authorized and established, I fear that the diseases already very grave will become chronic. Certainly the remedial measures will be much less effective later than now. On the 11th instant I cabled a communication to the Department, which had been addressed to me, signed by 19 of the largest coffee growers. Its import — industrial situation — it seemed to me, justified its speexty "presentation to the Department, although I do not fully subscribe to all the statements of Mr. Amadeo and his associates. I inclose herewith a copy, and have to ask that in any consideration that may be accorded to this letter my former communications of Septem- ber 5 and 30 be referred to as relevant. Very respectfully, Geo. W. Davis, Brigadier- General, U. 8. V., Military Governor. [Inolosure Xo. 1.] Sax Juan, P. R., , 1899. , proprietor or manager of acres of cultivated property in the barrio of , municipality of , Puerto Rico, for considerations hereafter to be named, do hereby agree to the following : 1st. To provide work on my plantation for able-bodied men for weeks, requiring from them eight hours' work each day for six (6) days each week. 2d. To render any assistance in my power to those laborers in the reconstruction of their homes and toward making them and their families at least as comfortable as before the hurricane of the 8th day of August, 1899. 3d. To assign to each a small parcel of land, not less than 10,000 square feet, in which to plant seed of food plants, and to see that such seed is furnished and prop- erly planted and cultivated, the product of such cultivation to be the property of the peon to whom the plot has been assigned. 4th. To furnish these peons with as many pounds of food for each and every day's work as there are legitimate members of his family, excluding adult males not working on my farm. 5th. To make careful investigation to assure myself that no member of the fami- lies of these peons is receiving relief supplies from any source except through myself, and that no issue is made for any person who is receiving means of subsist- ence from other sources. 6th. To keep strict account of all food received and issued, and to receive no more food than the amount called for in paragraph 4. 7th. To report to the board each month the number of peons employed, the num- ber composing their families, and the amount of food received and issued, and any misuse of relief supplies that may come to my attention. 8th. To transport the required food supplies from to my farm each week. In consideration of the foregoing, the board of charities of Puerto Rico agrees to furnish , barrio of , municipality of , at its convenience, and as long as such is at its command, an amount of food approximating 1 pound per day for each peon employed by him in working his farm, and each member of the peon's family. But nothing in this agreement is to be understood as holding the board of charities of Puerto Rico as liable in damages or otherwise for any failure to supply the whole or any part of the food hereinbefore mentioned. 36 It is further understood that any misapplication of relief supplies by the pro- prietor or his agents will be cause for the prompt annulment of this agreement and his prosecution under the requirements of G. O. 124, Headquarters Department of Puerto Rico, dated August 19, 1899. John Van R. Hoff, President of Board. Signature of proprietor or manager. Headquarters Department of Puerto Rico, Office of the Board of Charities, San Juan, P. B., December 8, 1899. Number of applications received to date 4, 193 Number approved and orders for rations issued to 897 Number of rations for above orders 43, 306 Or.. -- 303, 142 pounds — 1511 tons. 37 s ■fe PI o 1 ^ *0^03N«W[ 3 — 3 CO* i-i •£> t^ CNi Hr:ooco^cit- 03 HH^KiniOBOLT cT irf co" co" to cf o" r-T co" M CJ o c: CC iQ C^ 00 CO ■* JIHC- OS rt .(M-t-*ino-*ooo it-tOCMCOOiOOOCO 3 C--OJ COOCOr4QO" 6°£ 3 ce iox~4inoo}»m CDiOI>H(N iO -* t— CO ©C.OOOCC-tiO OOOO-^OOWO ;di>»flddddd^ ; ~ © .-■: > cc t> c-i co tr- (Neoaio t^IMOCO O O o in O CO OS © miOCO©©©©©© 1-HtXMOOOOOO d cd c: « d Q o* m t> XNCDOOOffiO^O CO" oo _ _ 1 O iH OlWHiOrtCO^O 3 o ^ 2 S flns 3 oop: ) O O M:l -f ■* ) O O O rH >— I £ &h3^S CO CO CM OS CO O SO O OS CO rJ as L- CO CO CO C- tO © CO CO OS CO CO(NH»00mCQH O © O © o © oioaooo TrifJddifid 00 CM CD © © O ^ m o © ^ m os"*"* cococS 00 rH CO lO •<# . co©tocot-incot~cM O N t- l> t- CO t* m H c/ -h co ri cs co" cs -+" cd cm cS-Ti^t't^t^cs-^t^-as c** o"io~o"oV^cTca"iH"io h HCMCO'tfOS-rt<^asCO© 0»"*HThOH«N M H N C^ lO W i-! (D C3 r- O N N H -rf r- I ^ -* ©'^cdcdiccoocoud co in - ci ^ oo ci oi o -*OOHML-J©OHt> co" of co" cc" t-^ as as* t> co" > © co as © t- © eo 1 C- © IT- 00 CO t' CM J # COCO©00C0r-li-l»-l W*l«' I * ' \* , , , , °/. " 5 ^ < ,-0 v V X U -7- : ^ % v : £»% % ,.* ^