satisfactory. Extensive state aid has been furnished indigent farmers by the distribution of cattle, and over 100,000 farmers have been assisted in this way. The tobacco crop will be less than last year on account of bad markets and low prices. The sugar crop, on the other hand, will be much larger. One hundred and fifty-seven sugar plantations are in operation, and the crop of growing cane will produce over 800,000 tons of sugar as against 615,000 tons last year and 308,543 tons the year before. Thirty-seven new mines have been surveyed and located, and 251,000 tons of ore have been shipped to the United States. Two hundred and sixty-three thousand dozen sponges were gathered in the sponge fisheries.

An expert has been sent from Cuba to Washington to study diseases prevalent among the animals of the island, and his work has been attended by good results. Glanders, formerly prevalent in the island to an extent unknown in other countries, has been practically eradicated. A systematic combat with tuberculosis, which has one of the largest death rates, has been inaugurated. Systematic vaccination against smallpox is going on throughout the entire island. The death rate from malaria in the large towns has been much reduced by sanitary improvements. The eastern part of the island is entirely free from yellow fever. The western part is practically free, there being but a few cases in or about Habana. This dreaded disease has passed from one of the leading causes of death to one of the least frequent. The reduction of the death rate in Habana alone, as compared with the former death rate, shows an average of approximately 3,700 lives per year saved, and Habana has changed its position from one of the most unhealthy cities to one of the most healthy. The control of yellow fever, acting upon the results of investigations as to its causes, prosecuted under the direction of the military government, appears to be now practically absolute.

The Surgeon-General of the Army furnishes the following condensed statement concerning the investigation and its result:

In my last annual report I referred to the appointment of a board for the purpose of pursuing scientific investigations with reference to the acute infectious diseases prevailing on the island of Cuba. This board, consisting of Maj. Walter Reed, surgeon, United States Army, and Contract Surgeons James Carroll, Aristides Agramonte, and Jesse W. Lazear, United States Army, arrived at their station, Columbia Barracks, Quemados, Cuba, on June 25, 1900. Fortunately for the purposes of the board, an epidemic of yellow fever, which had begun in the adjacent town of Quemados, Cuba, during the latter part of the month of May, was still prevailing, so

that an opportunity was afforded for bacteriological and pathological observations in this disease. The results obtained were especially valuable, showing that the bacillus icteroides (Sanarelli) bears no causative relation to yellow fever, and that the mosquito serves as an intermediate host for the parasite of this disease. Further experiments of a most interesting character demonstrated that yellow fever is transmitted to non-immunes by the bite of a mosquito that has previously fed on the blood of those sick with this disease; that yellow fever can also be produced by the subcutaneous injection of blood taken from the general circulation during the first and second days of the disease; that an attack of yellow fever produced by the bite of the mosquito confers immunity against the subsequent injection of infected blood; that yellow fever is not conveyed by clothing, bedding, or merchandise soiled by contact with those sick with the disease; that a house may be said to be infected with yellow fever only when there are present in it mosquitoes capable of conveying the parasite of the disease, and that the spread of yellow fever can be most effectually controlled by measures directed to the destruction of mosquitoes and the protection of the sick against the bites of these insects.

The importance and far-reaching consequences of the observations made by Major Reed and his associates at Quemados, Cuba, can hardly be overestimated. For the first time in the history of this widely prevalent tropical disease we are in possession of knowledge with regard to the manner of its propagation which will enable us, I believe, not only to check its ravages but to effectually stamp it out whenever it may appear in any of our garrisons or cities.

With the view of promptly arresting the spread of the disease, full instructions were issued in a circular from headquarters, Department of Cuba, for the information and guidance of medical and commanding officers. Already the sanitary measures which have been put in force by the health authorities in the city of Habana, based on the work of Major Reed and his associates, have resulted in absolutely ridding that city of yellow fever for the first time in more than one hundred and forty years.

Immediately preceding American occupation the Spanish government of Cuba was occupying and using for Government purposes a large amount of valuable real estate which had formerly been the property of the Roman Catholic Church, and which was held by the Crown subject to the results of a long series of negotiations and agreements between the Crown of Spain and the Holy See. The Government also held a large amount of "censos" or mortgages upon property in different parts of the island which had been given to the church for various religious purposes, and which had been taken over by the Crown and held under the agreements referred to. The Crown of Spain on its part recognized and complied with an obligation to pay to the church a large annual sum for its maintenance and support.

With American occupation the payment of this annual sum ceased, while the intervening Government entered into possession of the prop

erty and employed the greater part of the real estate for the same governmental purposes to which it had been devoted under Spanish control. The church thereupon claimed the right to be repossessed of its property. After a great deal of discussion and investigation the various questions as to property rights raised by the church were submitted to a judicial commission composed of Pedro Gonzales Llorente y Ponce, justice of the supreme court, Juan Victor Pichardo y Gonzales, justice of the audiencia of Pinar del Rio, and Juan Francisco O'Farrell y Chappotin, justice of the audiencia of Havana and professor of civil law in the University of Havana.

The commission decided in favor of the claims of the church, and the whole subject has been adjusted, to the apparent satisfaction of all parties, as to the real estate, by the military government paying a rental of 5 per cent upon the appraised values of the property, amounting to about $2,000,000, with a five years option to the government of Cuba, when organized, to buy the property at the appraised value, receiving credit against the purchase price for 25 per cent of the rental paid, and as to the "censos," by the military government taking them at 50 cents on the dollar, and permitting the debtors to take them up at the same rate.

The revenues of Cuba for the year ending June 30, 1901, were $17,167,866.21 and the expenditures were $17,385,905.35 as against revenues for the year ending June 30, 1900, of $17,657,921.44 and expenditures for the same period of $15,691,453.06.

In response to calls from the Senate Committee on Relations with Cuba, the War Department has prepared and rendered a complete detailed and itemized statement of all the receipts and expenditures of the government of Cuba from the 1st of January, 1899, to the 30th of April, 1900, showing the places where and dates within which the amounts were collected and the officers by whom and the authority under which the collections were made; a list of expenditures showing as to each the necessity and propriety thereof, the services or property for which the expenditures were made and the value thereof, the authority under which the expenditures were made, the officers by whom they were authorized and by whom they were made, and the particular funds from which the money was taken; giving a statement of all public work of every kind, including buildings, wharves, railroads, and all other structures built or constructed, improved, repaired, or decorated by or under authority of any officer, civil or military, the cost, value, necessity,

and propriety and the uses to which such buildings or structures have been put; whether the construction or improvement was by contract, whether the material used in construction was furnished by contract, and copies of each contract and names of all parties interested therein; and giving a statement of all personal property which was furnished, procured, and intrusted to any officer, civil or military, in Cuba within said time, the cost and value of the same, and the uses to which the property has been put and the disposition which has been made thereof.

These statements cover about 4,000 printed pages, and furnish a very complete accounting of the earlier and necessarily most unsettled and imperfectly organized period of American occupation.

The imports of merchandise for the year ending June 30, 1901, were $65,050,141, and the exports of merchandise, $63,115,821, as against imports of merchandise for the year ending June 30, 1900, amounting to $71,681,187, and exports of merchandise for the same period, $45,228,346.

Of the imported merchandise amounting to $65,050,141, there was imported from the United States merchandise of the value of $28,078,702, and from other countries merchandise of the value of $36,971,439. Of the total exports of merchandise amounting to $63,115,821, there was sold to the United States merchandise of the value of $45,497,468, and to other countries merchandise of the value of $17,618,353. Cuba thus bought from the United States less than she sold to us to the amount of $16,418,766, and bought from other countries more than she sold to them to the amount of $19,353,086.

Annexed hereto will be found a tabulated statement, marked Appendix B, showing the principal articles of import and export, and the proportions sold to and purchased from the United States, and to and from other countries.

It will be observed that, notwithstanding the intimate political relations which have existed between the United States and Cuba since 1898, American production has not succeeded to any considerable degree in superseding the productions of other countries in the Cuban market.

The total imports of merchandise from January 1, 1899, to June 30, 1901, amounted to $165,948,272, and the total exports of merchandise for the same period amounted to $138,104,515, leaving a trade balance against Cuba for that period of $27,843,757. This excess of purchases

is doubtless in a great measure accounted for by the fact that the long period of war and devastation which preceded the Spanish evacuation left the island practically destitute of movable property necessary either for the comfort of life or the reproduction of wealth. The excessive purchases have necessarily been made in a great measure upon credit in anticipation of the revenues to be derived from increased production following upon the revival of industry.

On the 1st of June, 1901, the second annual election of municipal officers, who administer local government throughout the island, was accomplished without disorder, and the newly elected officers are now performing their duties.

The constitutional convention, which was in session at the time of my last report, has concluded its labors and adjourned sine die. That convention was elected: (1) To frame and adopt a constitution; (2) to provide for and agree with the Government of the United States upon the relations to exist between that Government and the Government of Cuba, and (3) to provide for the election, by the people, of officers under such constitution, and the transfer of government to the officers so elected.

In February of the present year, as the convention appeared to be drawing near the conclusion of the first branch of its work, the following instructions were sent to the military governor:

WAR DEPARTMENT, Washington, February 9, 1901.

SIR: As the time approaches for the Cuban constitutional convention to consider and act upon Cuba's relations with the United States, it seems desirable that you should be informed of the views of the Executive Department of our Government upon that subject in a more official form than that in which they have been communicated to you hitherto. The limitations upon the power of the Executive by the resolution of Congress of April 20, 1898, are such that the final determination upon the whole subject may ultimately rest in Congress, and it is impracticable now to forecast what the action of Congress will be. In the meantime, until Congress shall have acted, the military branch of the Government is bound to refrain from any committal, or apparent committal, of the United States to any policy which should properly be determined upon by Congress, and, at the same time, so far as it is called upon to act or to make suggestions bearing upon the course of events, it must determine its own conduct by reference to the action already taken by Congress, the established policy of the United States, the objects of our present occupation, and the manifest interests of the two countries.

The joint resolution of Congress of April 20, 1898, which authorized the President to expel the Spanish forces from Cuba, declared—