One of the natural results of such a system appeared in the activities of smugglers.  The extent to which that industry was carried on cannot, of course, be even guessed.  Some have estimated that the merchandise imported in violation of the laws equalled in value the merchandise entered at the custom houses.  An official publication (American) states that “from smuggling on a large scale and privateering to buccaneering and piracy is not a long step, and under the name of privateers French, Dutch, English, and American smugglers and buccaneers swarmed the Caribbean Sea and the Gulf of Mexico for more than two centuries, plundering Spanish flotas and attacking colonial settlements.  Among the latter, Cuba was the chief sufferer.”  Had Cuba’s coasts been made to order for the purpose, they could hardly have been better adapted to the uses of smugglers.  Off shore, for more than half its coast line, both north and south, are small islands and keys with narrow and shallow passages between them, thus making an excellent dodging area for small boats if pursued by revenue vessels.  Thoroughly familiar with these entrances and hiding places, smugglers could land their goods almost at will with little danger of detection or capture.

Another heavy handicap on the economic progress of the island appears in the system of taxation.  Regarding this system, the Census of 1899 reports as follows: 

“Apart from imports and exports, taxes were levied on real and personal property and on industries and commerce of all kinds.  Every profession, art, or manual occupation contributed its quota, while, as far back as 1638, seal and stamp taxes were established on all judicial business and on all kinds of petitions and claims made to official corporations, and subsequently on all bills and accounts.  These taxes were in the form of stamps on official paper and at the date of American occupation the paper cost from 35 cents to $3 a sheet.  On deeds, wills, and other similar documents the paper cost from 35 cents to $37.50 per sheet, according to the value of the property concerned.  Failure to use even the lowest-priced paper involved a fine of $50.

“There was also a municipal tax on the slaughter of cattle for the market.  This privilege was sold by the municipal council to the highest bidder, with the result that taxes were assessed on all animals slaughtered, whether for the market or for private consumption, with a corresponding increase in the price of meat.

“Another tax established in 1528, called the derecho de averia, required the payment of 20 ducats ($16) by every person, bond or free, arriving in the island.  In 1665 this tax was increased to $22, and continued in force to 1765, thus retarding immigration, and, to that extent, the increase of population, especially of the laboring class.

“An examination of these taxes will show their excessive, arbitrary, and unscientific character, and how they operated to discourage Cubans from owning property or engaging in many industrial pursuits tending to benefit them and to promote the material improvement of the island.