24 



THE CUBA REVIEW 



CUBAN FINANCIAL MATTERS 



SANTIAGO ELECTRIC LIGHT AND TRAC- 

 TION COMPANY 



It is learned that Lawrence Turnure & 

 Co. and Speyer & Co. have contracted for 

 the purchase from the "Spanish Bank of 

 the Island of Cuba" of the outstanding 

 $2,000,000 First Mortgage G per cent Gold 

 Bonds of the Santiago Electric Light & 

 Traction Company of Santiago, the second 

 city in Cuba. 



From the commencement of operation 

 in 1908 this modern property has shown 

 a steady increase in earning power. For 

 the present calendar year it is expected 

 that net earnings will double the amount 

 required for interest on the bonds. There 

 is no floating indebtedness. Frank Stein- 

 hart has become a director of the Santiago 

 property, to which he has agreed to give 

 his close personal attention. If his con- 

 spicuous success in the management of the 

 Havana Electric Railway Co. is a criterion, 

 substantial benefits are expected to result 

 to the Santiago Company from his co- 

 operation. It is believed Lawrence Turnure 

 & Co. and Speyer & Co. will acquire a 

 substantial interest in the stock of the 

 Santiago Company. 



The railway (which is largely laid with 

 87 pound steel rail) will probably be ex- 

 tended somewhat during the present year. 

 The company has a lighting contract with 

 the city of Santiago. There is no other 

 tramway or lighting company in the city, 

 nor is there a gas company. The conces- 

 sions extend well beyond January 1, 1959, 

 the maturity of the bonds. A sinking 

 fund will provide for the redemption of 

 the authorized issue of $2,.o00,000 bonds 

 at their maturity. The Equitable Trust 

 Company, of New York, is trustee for the 

 mortgage. 



While a public offering is not likely to 

 be made at present, it is understood that 

 the bankers have already sold a substantial 

 amount of bonds privately in the United 

 States, Canada, Europe and Cuba. The 

 issue price is likely to be slightly under 

 par, probably at 98^4. 



CUBA S FINANCIAL MUDDLE 



Recent special cables from the Herald's 

 Havana correspondent outlined some of 

 the difficulties which the Gomez adminis- 

 tration was facing. American contractors 

 were reported clamoring for unpaid 

 charges, and political opponents of Presi- 

 dent Gomez were reported demanding an 

 accounting from the administration for the 

 last $16,000,000 Cuban loan. 



Poor business foresight, unprofitable 

 laws governing financial transactions and 



a lack of proper system in keeping tab on 

 expenditures are believed here to be mainly 

 responsible for the present state of Cuban 

 finances. When a new budget is not ap- 

 propriated for the last year's budget re- 

 mains in force in Cuba. In the words of 

 one official here the Cuban government 

 goes along from year to year spending 

 money on an aristocratic scale and ignoring 

 the coming day of reckoning. 



The contract which the Cuban govern- 

 ment has with the port company for the 

 dredging of the Cuban harbors is con- 

 sidered an example of poor business fore- 

 sight. The company for the next thirty 

 years gets the proceeds of revenue receipts, 

 which amount to between $1,000,000 and 

 $1,500,000 a year. The total amount of 

 the work to be done in dredging will cost 

 about $13,000,000. For this work it is esti- 

 mated that the Cuban government will pay 

 about $48,000,000. The whole project, it 

 has been many times said, is not viewed 

 with much favor at Washington. 



On June 20th it was asserted that the 

 United States government had demanded 

 of Cuba that it pay Judge Reilly's claim 

 for the Cienfuegos improvements. The 

 amount involved is $650,000. 



LIGHT AND POWER CONCESSIONS 



William A. P'ulton has been granted a 

 concession to build an electric street car 

 line in Matanzas. The auction sale of the 

 concession required by the law will be car- 

 ried out on August 12th. Up to that time 

 the government will receive propositions 

 from any others who wish to build and 

 exploit the street car line. 



President Gomez of July 1st granted a 

 franchise to Sr. Santiago Portuondo to 

 establish an electric light and power plant 

 at Cobre, Oriente Province. 



The president has also signed a decree 

 authorizing Arturo G. Bornstein, Miguel 

 Roura and Juan Barrechea to install elec- 

 tric and power plants at Artemisa, Quema- 

 dos de Guines, Calabazar and Mate. 



WESTERN RAILWAY EARNINGS 



June 1st to June 29th, i23,836, a decrease 

 as compared with the same period in 1911 

 of £653. 



CUBAN CENTRAL EARNINGS 



June 1st to June 29th, i34,126, an increase 

 as compared with the same period in 1911 

 of £6,715. 



