THE 

 CUBA RLVILW 



"ALL ABOUT GUBA" 



Copyright, 1914, by the Munson Steamship Line 



Volume XII 



FEBRUARY, 1914 



Number 3 



CUBAN GOVERNMENT MATTERS 



CUBAN LOAN HEA\'ILY OVERSUBSCRIBED IN NEW YORK- 

 TION OF CUBA PROCEEDING RAPIDLY 



-DEFORESTA- 



The jMorgan bid was prac- 



Loan tically at 95%, because the 



Heavily firm renounced its right to a 



Oversubscribed 5 per cent indemnity on 



$2,500,000 already loaned, 



which Cuba agreed to pay in the event that 



J. P. ^lorgan & Co. failed to obtain the 



present loan. 



Five bidders appeared. They were Nor- 

 man H. Davis, president of the Cuban 

 Trust Company, representing J. P. Morgan 

 & Co. ; Eugene Klapp of Xew York, rep- 

 resenting the Kleinworth-Sperling syndi- 

 cate ; Herrera Sotolongo, representing 

 Pressprich, Smith & Beale of Xew York, 

 who bid 90.0.5 ; Herrera Sotolongo, who bid 

 100 for one bond on his own account, and 

 Herman Ostertag, representing German 

 bankers whose name he declined to reveal, 

 who bid 92%. 



The bonds were oversubscribed heavily 

 in Xew York on February 7th soon after 

 the terms upon which the bonds were being 

 sold became known in the financial district. 

 The bonds were offered by J. P. Morgan 

 & Co., Kuhn, Loeb & Co., the First Na- 

 tional Bank, and the National City Bank 

 at 98^2 less the usual commission of one- 

 quarter of 1 per cent. Before the day was 

 over they were quoted at a premium of a 

 full point. 



The bankers' circulars announced that 

 the subscription lists would be closed at 3 

 P. ^L on February 10th or earlier. The 

 fact that the bonds were heavily oversub- 

 scribed on the day they were offered was 

 cited as another striking illustration of the 

 great demand which has existed of late for 

 investment issues. 



The republic of Cuba, the circular points 

 out, pledges as special security for the 

 bonds its customs receipts, subject to prior 



pledges. These amount to only $4,010,000 

 a year, while the customs receipts of the 

 republic have averaged more than $25,000,- 

 000 a year for the last five years. Under 

 the Piatt amendment the government of 

 this country has acquiesced in the creation 

 by Cuba of the public debt represented by 

 these bonds. 



The interest on the bonds is payable 

 semi-annually on February 1st and August 

 1st, and the bonds mature on February 1, 

 1949. Principal and interest on the reg- 

 istered bonds are payable in X"ew York in 

 United States gold coin. Coupon bonds are 

 similarly payable in X'ew York or at the 

 holder's option in London, in Germany or 

 in Paris at fixed rates of exchange. 



The term of the bond will be thirty-five 

 years, sinking fund to commence on Jan- 

 uary 1, 1920, and the Cuban government 

 will pay 102 VL' for drawn bonds if unable 

 to purchase the bonds necessary for the 

 sinking fund upon the market at a low 

 figure. 



The Cuban government wdll also be en- 

 titled at any time after January 1, 1920, to 

 extend the operation of the sinking fund 

 or redeem all bonds outstanding at 105. _ 



Other bankers interested in the loan with 

 J. P. Morgan & Co., are Kuhn, Loeb & Co., 

 the First X'ational Bank and the New York 

 City Bank. 



Speyer & Co., it is said, maintain that 

 thronch a contract in 1909, at the time that 

 they underwrote the $35,000,000 loan, all 

 Cuban financing was to be done exclusively 

 with them until 1919. 



The present debt of the republic of Cuba 

 is made up as follows: $31,175,000 5 per 

 cent loan of 1904: $16..500,O00 4Vi. per cent 

 loan of 1909 : $10 757.000 interior debts and 

 $1,615,408 notes outstanding. The latter will 



