As the monthly allotments under these headings were so large, and used for rapidly changing and expanding departments, more elaborate methods were adopted for the supervision of their running expenses, and for the consideration of the large claims and deficits resulting from the conditions above named.

The establishment of charitable institutions had been very general throughout the island in the reconcentrado period and in the early days of the intervention. From time to time the support of these institutions was taken over by the government. Nearly all of them had debts which had been contracted without authority. Throughout the island merchants and tradesmen were refusing to grant any more credit. As government aid was extended to them, the money was allotted partly on the requisitions of the superintendents of charities on the staff of each department commander, and partly through the finance department. General coordination was necessary. The remedy was found in centralizing, with one department of charities and hospitals and one superintendent in Habana, to be governed by Order No. 271, July 7, 1900. The various hospitals of the island appointed bonded disburs ing officers, who forward monthly itemized requisitions to the superintendent in Habana, where they are consolidated by fiscal zones and forwarded to these headquarters with proper recommendations based on the complete detailed records of his office. Upon these recommendations the funds are allotted to the fiscal zones on their regular monthly estimates.

All just deficits and claims have been paid and no more are being

contracted.

The phenomenal expansion of the public-school system and the original organization, based on widespread enthusiasm among people unused to the business of handling funds, gave rise to all sorts of irregularities and many abuses. The monthly allotments have been the largest of all and the most widely distributed. Most of the country districts being far from lines of communication and entirely devoid of banking and business facilities, it has been a difficult problem to obtain proper requisitions for funds and to get the funds to these outlying districts at the earliest possible moment.

Under the original school law, Order No. 226, December 6, 1899, the alcaldes were the presidents of the school boards and the disburs ing officers. This school law gave the school boards the power of authorizing new schools and installing same. Every advantage was taken of this; schools were established right and left, usually at the will of the alcalde, until in the spring of 1900 it was seen that there was a prospect of an indefinite expansion which the revenues of the island would soon be unable to stand, and the military governor, under date of March 3, 1900, ordered that no more schools should be established except by his authority. The allotment for the month of April was taken as the limit until the school system should be organized on a business-like basis.

Until the publication of the new school law in Order No. 368, August 1, 1900, funds were obtained for the expenses of municipal instruction by requisition of the alcades on the disbursing officers of the fiscal zones, for the amounts necessary for personnel, material, and rents. The disbursing officers in turn made requisition on these headquarters on their regular monthly estimates, and allotments were made accordingly, without having any definite information as to the actual personnel of the schools or of the local conditions; which infor

mation can, under the present system, be obtained from the office of the commissioner of public schools.

To provide against this indefinite allotment, and in order that this office might be cognizant of the specific disposal of the funds, the alcaldes were instructed to fill out and send to these headquarters a monthly statement, showing the name and grade of each teacher, with amount of monthly salary; names of janitors and their salaries; the location of the different schools; the amount of rental paid for each school, and the amount of material necessary for the month, etc. This blank was known as Form 20 (Exhibit 3), and the allotments of funds. were in accordance therewith, until October 1, 1900.

The trial made with this blank sufficed to show it an excellent safeguard, and with the creation of the office of commissioner of public schools the plan was extended still further by the adoption of Form 16 (Exhibit 4), which contained even more specific data than provided for in Form 20, and requiring said blank to come through the commissioner of public schools in order that that official might make recommendations in accordance with the provisions of the school law and the records of his office.

With this system it is possible for this office to know the exact purpose for which every cent has been allotted, and for the auditor to require proper accounting. The funds are disbursed through the fiscal zones, and the secretary of the local school board, a bonded official who is personally interested in making the requisitions, in accounting and disbursing properly at the earliest possible moment. The only delay now known in the payment of school-teachers is caused by the hardship on those in country districts who are obliged to come to the secretary's office, often from long distances, over the worst of roads, to sign the pay rolls. This, too, will soon be obviated by the use of individual vouchers, containing the certificate and receipt of the teacher and the certificate of the subdistrict director of the teacher, that he or she has taught the school for the period covered by the voucher. These vouchers can be forwarded by mail to the secretary of the board of education, who will certify as to the authorized appointment and name of the teacher and then transmit the same to the administrator of the fiscal zone, who, upon receipt of the vouchers, will send check by mail.

The administrative machinery of the school system is now running smoothly, and the regular monthly budget of about $300,000 will be sufficient for the ordinary expenses. As conditions in the island have become normal the necessity for extraordinary expenditures, such as for sanitation, general charities, and for reconstruction have lessened and provided more funds for placing the public schools of the island on a modern basis. In January of last year the military governor visited schools in all parts of the island. In some of the outlying districts there was a special interest and enthusiasm in establishing schools, but means were wanting for even the most ordinary makeshifts of installation. In the town of Baire, in an out-of-the-way district of Santiago province, there were huddled 75 to 80 children on improvised benches, with a blackboard which consisted of a rubber poncho, a piece of soft limestone for chalk, and no books or other supplies. An American officer riding through the village had found them without any blackboard, and had tacked up his rubber blanket for that purpose. On the return from this trip of inspection contracts

amounting to $587,000 were let to various firms for all sorts of school furniture, books, and supplies. These were all received and distributed during the spring and summer. Every effort was made to arouse local pride, so that these supplies would be transported from the ports and set up in the schools scattered over the island. In July, however, special inspectors who were sent to all the schools reported that in most cases the furniture, desks, and tables were stored in the larger towns. The state then assumed the expense of distribution and installation, in order to have the schools properly equipped for the term beginning in September.

At the beginning of the intervention there was not a public school building in the island. The present schools have all been established in private houses for which the state pays the rent. In most of the large towns of the island the state buildings, formerly occupied by Spanish troops, have become available for this purpose, and in many instances the military governor has caused them to be transformed into modern and convenient school buildings; notably in the city of Santa Clara, where the old Cuartel Alfonso XIII was converted at a cost of $14,005. 20, and another barrack building at a cost of $6,400.25. At Colon the old barracks were remodeled at a cost of $6,000. Many others of these old Spanish cuartels the military governor has ordered reported upon with a view of transforming them into public-school buildings.

About $750,000 were expended for municipal instruction in the first year of the intervention. During the past year, ending December 31, 1900, $4,009,460.31 were allotted for the organization and support of the public schools. It is interesting to compare with the antebellum times of the Spaniards, when the annual expenses of public instruction reached about $400,000, and were covered with the proceeds of the tax that the municipalities collected as a surcharge on the rates of the state tax on trade, commerce, and professions. The proceeds of these taxes, however, had always been insufficient to pay the whole of the expenses, with the result that municipal schools were in the worst possible condition, not only in regard to the schoolhouses, but also as to the salary of the teachers, in the payment of which there was no sort of punctuality. In some places their salaries were as much as three years overdue. There is a Spanish proverb, “As hungry as a school-teacher."

In keeping with the reorganization of the personnel of the University of Habana, ample provision has been made for the installation of the different chairs in the state buildings located in the city. Belascoain Barracks has been transformed into a school of medicine, with its laboratories properly installed and provided with the latest improved instruments. The old quartermaster's storehouse in Carlos III, at an expenditure of $35,000, is now a thoroughly equipped laboratory for the faculty of medicine and pharmacy. The institutions of secondary instruction in the six provincial capitals have also been reorganized, the means having been provided by the state for putting them into condition to meet the requirements of the period.

In the establishment of law and order it has been deemed of the utmost importance that the judiciary should not depend upon the uncertainty of municipal budgets, and the state has therefore assumed the entire judicial burden of the island, with the exception of the expenses of correctional courts. These were for a time supported by

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the state, but since December 1, 1900, they have been a charge against their respective ayuntamientos, as directed in order No. 449, November 2, 1900.

From time to time occasions have arisen for the state to come to the assistance of certain departments or municipalities for extraordinary expenses for which their budgets did not provide. By orders No. 164, April 18, 1900, and No. 316, August 11, 1900, elections of municipal officials and delegates to the constitutional convention were held throughout the island on June 16 and September 15, 1900, respectively. For the expenses of these the secretary of state and government was ordered to prepare a budget, and payment of same was made by the state, amounting to $38,619.89 for the municipal elections and $42,654.05 for the election of delegates to the constitutional convention.

For the purchase of horses and cattle for distribution in the poorer range districts $110,000 has been appropriated. This is in the nature of a loan, as the cattle are to be sold on easy terms of payment, proper security being taken for its return.

To give some idea of the routine of this office a typical estimate is shown as Exhibit 5.

This estimate blank is uniform for all disbursing officers. The monthly estimates of the military disbursing officers come in triplicate to this office from the auditor of the island, with a numerical check, and the indorsement signed by the auditor showing a statement of the accounts of the officer. Froin the records of these headquarters the estimate is checked as to the authority for the different items. It is then prepared for the signature of the military governor, whose final check on the necessity and the expediency of the allotments is determined by his thorough knowledge of every part of the island, from reports of operations and by his frequent inspections of all work being carried on. One copy of this estimate is retained in this office for its records, another forwarded to the secretary of finance for his information, and the third returned to the auditor for the issue of an accountable warrant, which is attached to the triplicate copy of the estimate and returned to these headquarters for the counter signature of the governor-general. The different items are then charged under the proper headings in the allotment book of this office. The auditor makes the same charges on return of the warrant to his office, and forwards it to the treasurer of the island, so that the money may be placed to the credit of the disbursing officer.

Semiweekly reports (Exhibit 6) are forwarded to this office by the auditor and treasurer of the balances on hand and the warrants by number drawn up to date. The treasurer also gives a statement of collections. (Exhibit 7.) The very complete allotment book of these headquarters gives a final check on these reports. Attention is invited to explanatory letter (Exhibit 8) herewith attached and marked exhibits, which give the total expenditures for the year January 1 to December 31, 1900.

As soon as the approval of the military governor is had upon any estimate the drawer is informed by telegraph or letter, depending upon the facilities for quick mail communication, so that he may carry on the work with a full knowledge of the approval of the military governor.

About the middle of the month the estimates from the fiscal zones and civil disbursing officers are received. These all being based on

approved projects or budgets, the money is not put to their credit until the last days of the month.

For the past six months the average of the monthly allotments has been $1,737,073.20, constantly keeping on hand a balance of about a million and a half to provide against emergencies.

At the time of relinquishment of Spanish sovereignty the treasury was left bare of money, and even many of the records concerning the administration of public moneys were lost. All of the current obligations of the last year and many of the preceding were left unpaid. To appreciate fully the difficulty of introducing American methods into the handling of public moneys one must know the vicious money habits of officials of Spanish times. Few fixed salaries were paid Spanish colonial officials, and in many cases no salaries were attached to the positions. (These were often most eagerly sought.) Percentages of receipts, fees, or "gratificaciones," which are in the nature of perquisites, usually determined upon by interested superiors, were the means of payment. As a rule employees, teachers, etc., were paid by the means ofhabilitado." An individual without official status was semiofficially recognized as a paymaster, who relieved the payees of the red tape and delays incident to obtaining their pay, for which he withheld a commission, varying directly with the difficulty and delays which he experienced in securing their money.

Under such conditions accounting and auditing could be but mere formalities. With these methods inbred, and followed by the loose philanthropic methods of the early days of the American occupation, the Cubans were not receptive to the exacting regulations in accounting and auditing which have been gradually forced upon them. Remembering, too, that 65 per cent of the people are illiterate and had become dependent in a measure upon contributions, either as individuals, or on state assistance as municipalities, and it has been in this order that aid has been gradually withdrawn from them by the administration, as they were able to bear their own burdens. They needed saving from absolute dependence upon indirect taxation. Petitions and mass meetings have become very frequent to influence the military governor into doing away with all direct taxation, and petitioning him to pay all expenses, state and municipal, from the customs receipts.

Another serious hindrance was the difference in ordinary business methods, and the almost complete absence of what we term business facilities. As a corollary to the hostility to government in general was their lack of confidence in all forms of paper. Business was carried on on a strictly coin basis, and exchanges, even those on a large scale, were made in French and Spanish gold. Before the war there was only one bank in the island-the Spanish bank of Habana--and it was more of the nature of a subtreasury for the convenience of the Spanish Government than as an exchange for the benefit of business interests. At first even the United States Government checks could not be cashed without high rates of exchange, but with the establishment of American banks and the branching out of the fiscal agents of the United States in the provinces banking facilities as we know them were at hand, and the island government, instead of making all its payments in cash, by order of April 6, 1900, issued checks to the disbursing officers on these depositories. And later on the method of payment by checks was extended throughout the island to the pay