18 



THE CUBA REVIEW 



MONEY LEGISLATION IN CUBA 



till II'. //. MomU's, Secretary Natiotvil Hank of Cuba 



The iNIonetary Law of Cul)a, as it stands, 

 is a result of the FAUopean war, forming as it 

 does part of the plan of national defense en- 

 acted by the Cuban Congress, and approved 

 by President Menocal on October 29, 1914. 



Such a sweeping measure of legislation be- 

 came necessary to meet the falling off in cus- 

 toms revenues, due to the curtailment of ex- 

 ports by the European nations, and after 

 l)roviding for various forms of public economy 

 the law prescribes a national coinage, ])ased on 

 the single gold standard. 



While a change from one money system to 

 another is usually the result of slow evolution 

 and wide prelimmary discussion, ;here are 

 cases where the p\iblic emergency calls for 

 immediate action. This occurred in Culja last 

 fall, ^\hen the unprecedented rise in the price 

 of Spanish and French coins made it impera- 

 tive for the Cuban legislatuire to authorize a 

 national currency, which would emancipate 

 the country from a European system, costly 

 and inadequate for local needs, and enable 

 Cuba to buy gold and silver in the open mar- 

 ket and coin them in the mints of the United 

 States which is provided for in the same law. 



The demand for money in Cuba has grown 

 with the tremendovis increase in her national 

 wealth and industries. Her foreign commerce 

 has ahnost doubled in the last ten > ears, and 

 with a prospective sugar crop of 2,350,000 

 tons this season as comparetl with 2,597,732 

 a year ago, representing an expected total 

 value of .1164,500,000 in comparison with only 

 $129,886,600 for last year's record crop, it is 

 evident that a monetary law to increase and 

 normalize the ciculating medium was neces- 

 sar>. 



In adopting a national gold standard, at a 

 mint parity with the American dollar, which 

 is also made a legaJ tender under the same law, 

 the country will be afforded an ample cur- 

 rency. American metallic and paper money 

 will circulate to the exclusion of other foreign 

 moneys, simplying exchange opeiations and 

 adding another link to the established close 

 relations with the United States. 



As the new coins have not yet been issued, 

 their circulation cannot be discussed. The 

 first shipment amounting to $300,000 gold 

 and $431,000 silver, was delivered April 7 by 



the National Bank of Cuba, the Government 

 agent to the Treasurer of Cuba, and will 

 shortly be circulated and absorbed by the 

 jjublic, which eagerly waits the new coins. 



The main provisions of the Monetary 

 Law are as follows: 



1. The unit of value is prescribed as a gold 

 peso, of the same weight and fineness as the 

 American dollar, namely, 1.6718 grams gross 

 or 1.5046 grams of pure gold. 



2. Gold, silver and nickel pieces are to be 

 coined, of specified sizes and denominations. 



3. Gold coinage is to be unlimited, and that 

 of silver shall at no time exceed a total of $12,- 

 000,000. 



4. The gold coins are to be an absolute legal 

 tender; those of silver, a full lawful tender for 

 obligations not in excess of $10, and to the ex- 

 tent of eight per cent of payments in excess of 

 that amount. Nickel coins (that is, five cent, 

 two cent, and one cent pieces) shall be legal 

 tender to the extent of $1 only. 



5. United States currency shall be likew ise a 

 legal tender in payment of debts. 



6. All foreign moneys, except LTnited States 

 currency, are to circulate only as "merchan- 

 dise" under the law, but may be tendered in 

 payments where so provided by agreement. 



As the new' coinage law demonetized the 

 Spanish gold dollar, an ideal Spanish or 

 French coin of 21.13 grains of pure gold, used 

 solely in Cuba as a legal standard of compu- 

 tation for a century past, the President of 

 Cuba, in order to define its continued use un- 

 til supplanted by the national currency, is- 

 sued Executive Decree No. 1006 of 1914, pro- 

 viding that Spanish and French gold coins in 

 circulation shall continue to be estimated, as 

 heretofore, at $5.30 and $4.24 Spanish gold 

 for the alfonsino and luis, respectively. These 

 coins, which are still in circulation, will be 

 repatriated by the Government in two years, 

 and Spanish silver in one year, in such a man- 

 ner as not to affect the exchanges. 



Owing to the eight per cent, legal-tender 

 limitation placed on the national silver coins 

 in payments greater than $10, and the re- 

 demption idea inseparable from a composite 

 monetary system based no gold, the question 

 of the probably exchange relation between the 



