TH E CUB A RE V I EW 21 



47}i cents per ton of coal thereby making, with the existing differential, a total 

 differential equivalent to 66j4 cents per ton of coal. 



It is manifestly unfair to thus place taxation upon one industry without equivalent 

 taxation of its competitive commodity, coal (both of which are not commercially 

 produced in Cuba, nor likely to be in the future), particularly inasmuch as fuel oil 

 now produces, under the existing imports tariff, a revenue to the Republic of approxi- 

 mately $500,000 annually over and above the revenue derived from its competitor, 

 coal, and that which would be derived if no fuel oil was imported into Cuba. Any 

 additional taxation on oil will further make it impossible for oil to compete with coal, 

 resulting in reduced revenue to the government and the gradual extinction of the 

 use of fuel oil and a loss of the investment made by the oil companies and the consumers 

 of facilities now provided, as there is no prospect in the future of a reduced cost in 

 the production of fuel oil whereby the aforesaid differential could be absorbed. 



The oil companies will be subject to the 1 per cent. Gross Sales Tax and are 

 already subject to existing forms of taxation, all of which create much revenue to the 

 Government. 



(B) The injustice and burden of such taxation to consumers. 



It is imperative that all industries of Cuba obtain fuel at low cost in order that 

 the cost of production of sugar, the most important and almost the sole product of 

 support of Cuba, on which commodity the prosperity of the country depends, and 

 which almost every other industry is directly or indirectly related to, or dependent 

 upon, may be reduced to the lowest possible cost and permit the entire crop (the 

 facilities for production of which are now nearly twice as great as in normal times 

 before the war), to be marketed in all markets of the world in competition with that 

 produced by other industries. 



In the manufacture of sugar, including private railroad lines operated in con- 

 junction with the mills, fuel constitutes the largest part of the operating cost, excepting 

 the cost of cane and labor and in other manufacturing industries, the operation of 

 railroads, street railways and water transportation, fuel is likewise a very large pro- 

 portionate cost of operation or manufacture. 



Eighteen million dollars (including approximately $5,700,000 expended by the oil 

 companies), has been expended in Cuba since the passage of the law of July 14, 1917 

 (which law made possible the use of fuel oil commercially) for facilities for handling, 

 storage, distribution and use of fuel oil, $9,000,000 of which is for materials imported 

 into Cuba and from which Cuba has derived import taxes according to the tariffs 

 now in effect. 



The placing of additional taxation on fuel oil, which cannot be absorbed by the 

 fuel oil marketing companies and which for similar reasons, due to competition of 

 coal, which is without commodity class taxation, cannot be borne by the consumer: 



1. Renders useless the investment by consumers, sugar mills, railroads, etc., of 

 $12,300,000 of property; 



2. Kills the competition now existing with two commodities available as a fuel, 

 and which, with only one class of fuel available, unquestionably will be productive of 

 higher costs of fuel to every industry or consumer and consequent higher cost of manu- 

 facture and operation. With the other forms of increased taxation which must be borne 

 by every company and industry of the island, none of same can carry more burden 

 and prosper. 



Article LVI. Taxes on Gas Oil, Lubricating Oils, Kerosene and Gasoline and 

 Petroleum used for purposes other than fuel. 



Protest is made to additional taxation on those commodities, all of which, with the 

 exception of kerosene and gasoline, are not products of or manufactured in Cuba 

 as it is considered unfair and unjust to companies selling these commodities by prac- 

 tically every other form of taxation created in the proposed law. All these commodities 

 are necessary to the industries of Cuba and form a part of the cost of operation of 

 same and of the products manufactured. Kerosene forms a part of the living expenses 



