Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-02-21

to be used in paying the obligations con-
/ tracted by the Cuban 1unta and the revolu-
tionary governments from February, 1880
when the insurrection was started, until the
close Of the war. This includes the bonds
issued, and, apparently, the provision Is q
Limitation on the amount OF these bonds
which are to be considered good Under the
Cuban constitution the congress was en-
powered to fix this basis. It also happens
that President Palma was at the head OF
the junta when the bonds were issued, and
knows their value The notion that an In
definite number of millions of Cuban bonds
would have to be redeemed, seems to be
negatived by the action of the Cuban con-
gress.
How It is to Be Placed.
The loan Is to be placed by open bids
that is, at public auction. For year past
representatives Of New York capitalists and
syndicates have been in Havana and they
have professed willingness to take loan
of $50, 200, 900 to $50, 100000 under certain
conditions. OF course, the chief one was
that the United States should acquiesce
passiyely-that is, that 1t should not inter-
pose objections. Another condition was
that the loan should be In American gold.
As American gold is the standard in Cuba
no trouble has been found in meeting this
requirement.
One momentous fact appears In the loan
bill as passed by the Cuban congress This
is the creation of an internal revenue sys-
will be no one can tell
Ninety per cent and even more Of the
Cuban revenues are from customs re-
ceipts Under annexation either as
territory or state, these customs dues
would have gone into the treasury of the
United States and Cuba would have had to
sustain itself by the creation of a new
system of domestic taxation which would
require years to develop. Though this con-
dition is often pointed out it is still habit
ual1y ignored. Now, however, the annex
Xol,a L.,
viding for the national loan the Cuban con-
gress, without on it's part the slightest ten
dency toward annexation has inaugurated
a system of internal revenue taxation which
ultimately, say in twenty-five years, may
enable the government to be maintained in
dependent Of customs receipts.
Tariff and Customs Changes.
The tariff ana customs changes in the
loan bill are of Importance to the CONNER
cial interests of the United States, but per-
haps less so than to those Of other coun-
tries. The heaviest imposts seem to be
laid upon spirituous liquors and the inter
nal revenue tax will be in addition to the
customs duties.
Cubans are not heavy drinkers and the
consumption of alcoholic beverages Is not
great, yet there is a considerable amount
of gin drunk and this will bear fair pro-
portion of the new tax. Champagnes ana
other Injuries pay pretty heavily. The tax
universally is very small. but the aggregate
of revenue from this source will be consid-
cradle. Beer also will pay fair amount
Large quantities of it are imported from
the United States and local Havana brew
cries, which have been established during
the last three or four years, are doing
growing business.
The real innovation and real sign of
progress in taxation Is found IN the pro-
vision putting an internal revenue tax on
matches cigars and cigarettes. Everybody
in Cuba smokes either cigars or cigarettes.
No source of revenue so steady and so sure
can be found as this tax even though 1t Is
comparatively light.
Export Tax on Sugar.
About the proposition to put an export
tax on sugar, cigars and tobacco. the
Cuban legislators had grave doubts. Their
doubts find expression in the provision that
this export tax is not to be imposed unless
absolutely necessady, before the beginning
of the redemption of the loan. The re-
demption of the loan cannot begin for five
years, and this is the period OF reciprocity
with the United States as provided in the
pending treaty. This qualification is meant
as promise that no export tax will be laid
during reciprocity. Yet it is SO small that
the objection hardly could be a serious one.
The limit on sugar is 5 cents a. bag. which
would be about one-tWenty-hfth or cent
per pound. The export tax on tobacco was
abolished during the American military oc-
cupaton
An effort was made by come of the con-
gressmen to have a provision for a stamp
tax similar to that which has been so cue
cessful in Mexico. 1t was calculated that
$4,000 year could be raised from this
source without Inconvenience. But the
stamp tax is a hateful memory of Spanish
misrule. 1t was involved In the cedulas or
personal registration certificates and other
forms of oppressive government. This
would not have been so under the republic
and the stamp tax would have been purely
and legitimately means Of raising rev.
enue but lie Cuban legislators because Of
the memory of what it had been baked at
the proposition and 1t will pot form part of
the new system of internal revenue legisia-
ton. CHARLES M. PEPPER.