T H E C U B A R E V I E A\' 11 



capital would probably be lost. The bondholders' position is, however, more hopeful, 

 it being impossible to conceive that the most drastic valuation will bring out a figure 

 insufficient to cover the greater part of this class of capital." 



The Jnzestors' Rez'iezi' talks plainly on the matter as may be seen in the following 

 quotation from its columns : 



■'We begin to see a little more clearly what is involved in this Cuban Ports dispute, 

 and fear it cannot be gainsaid that the concession under which the bonds were issued 

 here was obtained by fraud or something too near it for comfort. Three natives of Cuba 

 and two foreigners carried the thing through on grab-all lines, and when a change of 

 government came in the island the new Ministry immediateh- proceeded to act in what 

 they considered to be the interests of traders and the inhabitants of the island at large. 

 They brought in a bill to cancel the concession. Some time ago, it may be recollected, 

 Mr. Govett published a most interesting and optimistic report with regard to the value 

 of the lands to be reclaimed in the course of executing the port works. Against these 

 prospective assets of high value the promoters or the organisers of the Ports Company 

 issued to themselves and have been trading off here $10,000,000 of share capital. No 

 actual asset is represented by that share capital, and none of the expenditure on the 

 works is provided from it. The English bondholders are finding all the money, and we 

 cannot gather that they are in danger whatever happens : indeed, the government professes 

 its willingness to refund all the money thus far spent on the works. The outlook for 

 the shareholders, however, is much less comforting we regret to say. but hopes are 

 indulged in that the dispute may end in a compromise, and it would assuredly be unwise 

 on the part of the Cuban government to punish innocent holders in Europe for crimes in 

 which they had no participation. Probably, however, there is still a great mass of the 

 wind share capital unsold, and it might be onh- justice were the amount of it to be 

 ascertained and canceled. In that event innocent shareholders here might be willing to 

 submit to cash assessment, if .not too severe, in exchange for the retention of an interest 

 in the valuable property to be created when the works are completed. It is a disagreeable 

 episode altogether, and a good deal of indignation has been expressed over what looks 

 like the hole-and-corner manner in which the government has acted. It may not be to 

 blame, but it looks as if it had given too little thought to foreign interests." 



"Any purchaser of a decent line of the Debentures would have to pay a very different 

 price to that obtained by forced sellers of a few thousand dollars' worth within the last 

 few days. I would advise holders of the five per cent bonds not to throw them away, 

 since confiscation is out of the question. Some 6^4 million dollars have been expended 

 by the company in hard cash, and the interest should be fairly secure, even in the event 

 of the threatened 20 per cent reduction of the dues. The Cuban government is not at all 

 likely to treat unfairly a concern doing valuable service, and to expose itself to interna- 

 tional complications." says the Financier and Bullionist, London. August 16th. 



The Rialto finds "the matter not a pleasant one, for Cuba has only recently given 

 another instance of bad faith. And it is passing strange that the government should 

 have been collecting port dues and handing over any proceeds to the company if it 

 considered the concession corrupt and invalid." 



Secretary of State Torriente thinks the government's position impregnable. The Port 

 Company's appeal against the presidential decree, which denied its legal existence, alleging 

 violations of the commercial code, declares the decree violates the constitution, denies the 

 alleged violations of the code and quotes evidence purporting to prove the government 

 has recognized the company. Commenting on this appeal Senor Torriente reiterated his 

 belief that the government's position is impregnable. 



-Asked on August 27th whether compromise was possible he declared it was not. but 

 that criminal action to put guilty persons in jail was possible. 



Clement J. Suarez. writing to the London Times from Belgium, denies that President 

 Menocal has broken faith with investors, neither has he abrogated or canceled the law 

 of February, 1911, granting the concession. He says further: 



"President Menocal declares in the decree that there is no identity between the persons 

 contemplated b}- law and those forming the jiresent administrative board of control 

 which the decree declares (1) has not complied with the statute law of Cuba: (2) is 

 guilty of felony and misdemeanor: (3) has conspired with others corruptly to mislead 

 European investors by issuing false statements: (4) has been guilty of treaS'On against 

 the State of Cuba by attempting to bribe officials of the United States government 

 dealing with foreign affairs : ( 5 ) has fraudulently expended the public taxes of Cuba in 

 corrupting newspapers published in the island : and is. finally, an association incapable, 

 in its present unreformed condition, of receiving the tonnage tax, the collections of 

 which are held in suspense pending judicial decision. The decree gives no fewer than 

 22 names of persons involved in these dishonorable transactions. 



