tion. If this is unsatisfactory, and the suspension is not removed, the responsible officer then has the right of appeal to the military governor. If the military governor sustains the auditor, his decision. becomes final. If he disagrees with him, the matter must then be referred to the Secretary of War for final decision. Forms of requisition and various forms used in keeping and rendering accounts will be found accompanying the report of the auditor of the island. This system may at first sight appear cumbersome and too full of detail. It imposes, it is true, a great amount of work upon the military governor and the officer whose duty it is to check up these estimates, but it also furnishes many safeguards against losses and reckless use of money, and renders officers, civil and military, exact and careful in their methods, and puts on file in the office of the military governor an exact and detailed statement of every expenditure, even to the smallest details, as the estimates are required to be submitted in full detail, and no money is allotted except for an approved purpose. Three copies of each estimate are forwarded, each signed by the officer making the requisition, the auditor, and approved by the military governor. One copy is sent to the secretary of finance, one is retained in the office of the military governor, and the third is kept by the auditor as a check in auditing the account. THE AUDITING DEPARTMENT. The auditing department is charged with the auditing of all accounts involving expenditure of island funds. The head of this department is the auditor of the island, who has as his assistants the assistant auditor of customs, assistant auditor of posts, and the assistant auditor of internal revenue. These are the principal divisions of the office. Methods of auditing are practically those of the United States. The present auditor, Lieut. E. C. Brooks, Sixth Cavalry, has been in charge of the office since April 11, 1900. When he was placed in charge of the office affairs were in bad condition, and an enormous amount of work has had to be done to put the office upon its present efficient footing. A great portion of the accounts were months behind. In addition to the enormous amount of regular work, the auditor was called upon to send in a full statement in reply to the various Senate resolutions covering expenses and disbursements in Cuba. This work has been ably and efficiently conducted by Lieutenant Brooks, and the office records brought up as nearly to date as is practicable in an auditing office. Maj. Eugene F. Ladd had acted as auditor for the first six months. of 1899. He was succeeded by Mr. William P. Watson, and Mr. Watson by Mr. W. E. Emory, who was relieved just prior to the appointment of Lieutenant Brooks. The work of the auditing department has been extremely difficult, as many of the civil disbursing officers are men who have had very little experience in accounting for and handling moneys, and most of them were entirely unfamiliar with the forms and regulations of our accounting system. Most of these difficulties, however, have been overcome, and the work for the future will be comparatively easy. The amount of work called for by the Senate resolutions has been enormous and has entailed considerable additional expense, amounting to over $15,000. CUBA 1900-VOL I, PT 1————6 POST-OFFICE DEPARTMENT. The postal service of the island was organized by Estes G. Rathbone, esq., former director-general of posts. This department was, at the time of my assignment as military governor of the island, practically an independent department. It had as auditor one of the assistant auditors, a subordinate of the auditor, but so thoroughly removed from his control and so completely under the influence of the directorgeneral of posts as to finally result in an almost complete separation of the offices of auditor and that of assistant auditor of posts. The department of posts was practically conducting its own affairs without any definite control being placed in the hands of the governor-general of the island. Various circumstances induced me to believe that there was something radically wrong in the administration of this department, and an investigation was made which resulted in the disclosure of an unfortunate condition of affairs and in the flight and arrest of Charles F. W. Neely and the subsequent arrest of Mr. Rathbone and others. On July 14, 1900, the President issued the following order, definitely prescribing the procedure in regard to funds, appointments, etc.: No. 304. HEADQUARTERS DIVISION OF CUBA, The military governor of Cuba directs the publication of the following instructions relating to the administration of the postal department of the island: [Circular No. 40, Division of Customs and Insular Affairs.] WAR DEPARTMENT, Washington, July 23, 1900. The following order of the Postmaster-General relative to the postal service in Cuba is hereby published for the information and guidance of all concerned: ORDER NO. 810. JULY 14, 1900. The following instructions are given for the guidance of the director-general of posts of Cuba in the administration of his department: 1. A monthly statement in detail shall be made at the earliest practicable period by the director-general of the estimated expenditures and receipts in the postal service for the ensuing month. One copy of such statement shall be transmitted to the Postmaster-General and one to the governor-general of Cuba. As any excess of expenditures over receipts is to be paid from the general revenues of the island, the governor-general shall be authorized to revise the expenditures, and such changes as he may deem best for the public interest shall be accepted by the director-general. 2. Monthly statements of the actual expenditures and receipts shall be made as early as practicable. One copy shall be transmitted to the Postmaster-General and one copy to the governor-general of Cuba. 3. In furtherance of the object herein sought-of promoting unity in the financial administration of Cuba and of governing the scale of expenditures in harmony with the measure of revenue-no obligation or contract for an amount exceeding $1,000, whether for transportation or any other branch of the postal service, shall be entered into without the approval of the governor-general. 4. The director-general of posts shall appoint postmasters and other officers and employees of the service and fix their compensation, as heretofore provided; but in order that the administration of the posts may be in full accord with the policy governing the general administration of the island, in the designation of natives and in other respects, the action of the director-general of posts in making appointments and fixing compensation shall be subject to the approval of the governor-general. This order to be duly proclaimed and enforced in Cuba. CH. EMORY SMITH, ELIHU ROOT, Secretary of War. J. B. HICKEY, |