10 THE) OU BA Rae Ve a 
Island are not considered as having been undertaken with a view to the best interests 
of the respective banks. As for the loan to the Cuban Government, although no 
President has been declared to have been elected, Dr. Alfredo Zayas is undoubtedly 
the candidate who received the necessary votes to win, The question of why no 
President has been declared, however, is discussed in another paragraph of this letter. 
The suddenness of the putting into effect of the moratorium was most remarkable ; 
out of a perfectly clear sky the blow fell. A week before the moratorium was put in 
effect the prosperity of the Island was at its height. Prices were high with a splendid 
deiwand for commodities of every kind. Real estate had risen in leaps and bounds 
for the past six months, new enterprises were meeting with encouragement from’ all 
sources, building was going on in all parts of the city on an extensive scale; there 
was no evidence anywhere of unemployment, when on Thursday, October 7th, the 
rumor quickly spread over the City of Havana that a run was being experienced by 
three of the banks of the city. On the Sth one of the banks closed its doors and it is 
felt sure that the half day Saturday was the only thing that saved the other two 
banks from closing their doors also. Sunday, after a hurried conference with the 
President of the Republic, General Menocal, the moratorium was decreed and made 
effective on Monday, the 11th of October. It took business several days to realize 
that conditions had indeed changed. From extreme activity to absolute dullness 
took but the space of a day and the public awaited the solution of the trying problem. 
The first effect of the placing of the moratorium in force was evidenced in a 
general scramble for cash. Checks were not permitted in payment for bills due and 
the scarcity of money caused an immediate cessation of all business. Investigations 
were started, but little information was meted out to the public. Heads of banks 
made trips to the United States in an endeavor to raise funds for the relief of the 
banks here and, for a time, cash poured into the Island. It is estimated that about 
$35,000,000 was sent to Cuba and the baniks disbursed these funds to their depositors 
or loaned this money out subject to checking accounts without the bounds of the 
moratorium, 
The situation was relieved in a general way, but the chief concern of today is the 
restoration of normal conditions in order that legitimate business may secure funds 
for the carrying out of its projects now paralyzed. The Banco Espafiol de la Isla 
de Cuba, of which institution Sr. José Marimon is the President, has petitioned the 
President of the Republic for an extension of the moratorium, in an endeayor to 
straighten out its affairs. The Banco Internacional has made strenuous efforts in the 
last fortnight to interest local capital in its affairs and resume payment to its 
ereditors. As for the Banco Nacional de Cuba, at one time it was rumored that this 
bank had been purchased by Northern capital and that Sr. José Lopez Rodriguez, 
Chairman of the Board of Directors, had been forced to resign. Another rumor had it 
that the National City Bank of New York had purchased the Banco Nacional de Cuba. ~ 
It now seems that the Cuban Government is apt to take over the Banco Nacional de 
Cuba since it is the National Depository. This bank has always had large sums 
of money, against which sums the Government issued its checks and drafts. 
It is the consensus of opinion that the banks are not, at this time, in condition 
for the raising of the moratorium. Many advance the opinion that the moratorium 
should be raised gradually, extending same over a period of possibly three or four 
months and permitting those who wish to withdraw funds to do so in small amounts, 
the idea being that faith in the solvency of the banks will have been restored by that 
time. One thing is certain: President Menocal has decided not to extend the mora- 
torium, but will leave it to the Cuban Congress to take what measures they deem 
best. The Cuban Congress, which is supposed to convene the first Monday of Novem- 
ber, did not do so until Monday, November 22nd, with a full quorum, and are now 
