"I am inclined to think, although further study might modify this opinion, that the wealth of Havana is such that a judicious system of taxation would yield a revenue of $15 per head, or upward of $3,000,000, and this, if honestly and judiciously collected and expended, would probably be twice the actual net revenue now enjoyed by the city. The collection of taxes of all kinds is now farmed out on a basis of five per cent. commission for collection, which is added to the tax. The tax collector states that there are no arrears, but this statement is vigorously disputed. The whole system of taxation is radically different from that used in American cities, and the system has been so long in operation, and is so intertwined with the system of taxation for the Island, that it would probably be unwise to attempt to introduce American methods during the period of military occupation, the duration of which is so uncertain. It would seem that all that can be done is to make an honest collection, substantially on the basis of existing laws, increasing such items as in the judgment of the military governor can stand an increase without hardship. Such arbitrary changes would create no surprise, as the population has for generations been accustomed to having them made by the Spanish Governor-General." Arbitrary changes are the one thing the military authorities should avoid in Cuba, for therein lies our greatest danger with these people. The fact that the people were accustomed to such action under Spanish rule makes them far more sensitive to such action than they otherwise would have been. Note the flutter in Santiago because of the order to send the custom-house funds to Havana, a perfectly righteous order in itself, but promulgated in too arbitrary a manner. Notwithstanding this it created something akin to a panic in Santiago, principally because it reminded the people of that province of the high-handed Spanish way of doing things. It is not advisable to increase either the debt or revenue of Havana at present, but, in the opinion of the author, it would be far wiser to keep the total revenues about as they now exist. The sources of revenue may be changed, however, to great advantage; increased in some directions, reduced in others. For example, ordinances should be passed compelling the owners of all houses not having water supply (and, according to General Greene, there are about 18,000 of these) to put in a water supply immediately. If this were done the water tax could be spread over a larger number of population, the individual taxes reduced, and yet the revenue from this source measurably increased. A good water-works, like that of Havana, should be made self-sustaining, and under proper management the profits from this department could easily be made sufficient to pay all the expenses, and at the same time to take