TCE. COCR A Stes VA EW, 9 
mills since the advent of the moratorium and a subsidiary corporation has been formed 
for the operation of these mills until such time as they can again be placed on the market 
and sold at a price which will enable the banks to realize the money loaned on the high 
valuation in effect at the time these loans were made. 
FINANCIAL Situation: No definite action tending to relieve the acute financial 
situation which exists and which has existed for several months has as yet been taken, 
although numerous measures of relief and plans of action are under consideration and 
advisement by the President and the legislature. 
Great interest is being manifested in the commission, recently appointed by President 
Zayas, which is now in Washington conferring with the Administration and Congress 
with reference to tariff reciprocity and the financial affairs of Cuba. The commission is 
headed by Secretary of the Treasury Gelabert and is composed of the foremost bankers, 
merchants and “Hacendados” and thoroughly enjoys the confidence of the Cubans, 
who feel that the members of the commission, due to their familiarity with the present 
urgent needs of Cuba, will present their case in such a convincing way as to secure the 
much needed aid. In a recent report submitted by the Secretary of the Treasury Gela- 
bert to the President, the total amount of bonded indebtedness of the Republic is shown 
as being approximately $86,000,000.00, added to which there exists a floating debt of 
$50,000,000.00, making the total indebtedness $136,000,000.00, or $13.00 per capita. 
An interior loan of $50,000,000.00 has been discussed to meet the present deficit of 
the government. We believe such action is extremely doubtful, however. 
Evidence of criminal manipulation in the handling of funds by persons connected 
with the defunct banking institutions are coming to light from time to time and two ar- 
rests have already been made, the case in question involving over $200,000.00. There 
is little doubt in the minds of many people connected with banking institutions through- 
out the Island as to their having been numerous illegitimate financial transactions, but 
whether or not sufficient evidence can be secured against the guilty parties is not known 
at this time. The Liquidation Committee is still working on the books and accounts of 
the various institutions which failed during the moratorium period and until they have 
completed their work and made their final report, it will not be possible to state to what 
extent this Juggling of funds has occurred. It is the general consensus of opinion that if 
a vigorous plan of prosecution were instituted against those parties guilty of fraud and 
dishonesty in connection with these banks, it would be of great value in negotiating the 
pending loan in the United States, as financial interests there are prone to look with sus- 
picion upon Cuban financial institutions in view of the laxity of the enforcement of the 
present banking laws. 
Suggestion has been made that a financial advisor be appointed by the United States 
Government, whose duties would be to assist the Cuban Government in financial matters 
and exercise a certain amount of supervision over the expenditure of funds, but this sug- 
gestion has not been received with favor on the part of the Cuban Government officials, 
it is stated. Another plan which has been mentioned here of late is that the United States 
Government appoint a Minister to Cuba possessing financial training and qualified to 
act as an informal advisor to the Cuban Government on financial matters. All indications 
point to the absolute necessity of some sort of supervision of any loan which may be made 
and there is little doubt but that such a supervision will be demanded before any large 
sum of money can be secured. 
Several meetings have been held at the office of the Cuban Legation in Washington 
by the Commercial Mission now in that Capital, and complete data has been gathered 
for presentation to the State Department in Washington relative to the proposed tariffs 
for Cuban products. It is expected that this Commission and the State Department will 
be able to arrive at some mutual understanding and that their recommendations to Con- 
gress will receive favorable consideration by that body in framing the new tariff laws. 
Pourrrcat News: Congress, which has been in continuous session since having 
been specially convened by President Zayas shortly after his inauguration, is at present 
deeply engrossed in trying to solve the problems of finances, taxes, unemployment and 
