CUBA REVIEW 



'ALL ABOUT CUBA" 



Copyright 1923, by the Munson Steamship Line 



Volume XXT 



FEBRUARY, 1923 



Number 3 



Cuban Government Matters 



Cuban Bond Offering 



The new loan of $50,000,000 to Cuba, 

 which is expected to accomplish the finan- 

 cial rehabilitation of the republic, was 

 offered to investors on January ISth by a 

 country-wide syndicate of bankers headed 

 by J. P. Morgan & Co., at 99}i, at which 

 the bonds will yield 5.55 per cent. The 

 offering appears over the names of J. P. 

 Morgan & Co., Kuhn, Loeb & Co., the 

 National City Company, the Guaranty 

 Company of New York, the Bankers Trust 

 Company, Harris, Forbes & Co., Dillon, 

 Read & Co., and J. & W. Seligman & Co. 

 Several hundred dealers and distributing 

 institutions throughout the country are 

 members of the selling syndicate. 



The Cuban law authorizing the loan pro- 

 ddes that $24,000,000 of the funds real- 

 ized are to be placed at the disposal of the 

 Department of Public Works. Of this 

 imount $12,000,000 is to meet obligations 

 3f the department incurred previous to 

 [uly 1, 1922, while $6,000,000 will go for 

 ■econstruction and repairs. An additional 

 56,000,000 will be at the disposal of the 

 lepartment after obligations of the other 

 tranches of the Government have been met 

 ind the Ministry of the Treasury has re- 

 reived funds to meet the expense of audit- 

 hg Government accounts and collecting 

 ales and gross receipts taxes. Not more 



than $9,000,000 will be deposited in the 

 Treasury to replace the "fund of special 

 accounts." The $5,000,000 loan obtained 

 from J. P. Morgan & Co. in 1922 will be 

 liquidated. 



The interest and sinking fund on the 

 loan will be met from sales and gross re- 

 ceipts taxes, amounting to 1 per cent on 

 gross sales, or receipts of merchandise, 

 from manufacturers, hotel keepers, public 

 utility corporations and others. The loan 

 is payable in United States gold coin and 

 will be forever exempt from Cuban taxa- 

 tion of any kind. 



A sinking fund is provided, which begins 

 at the rate of $500,000 in the first year 

 and increases $50,000 annually during the 

 first ten years, $100,000 annually during 

 the second ten years and $200,000 annually 

 during the third ten years, the result being 

 the complete amortization of the loan by 

 the sinking fund over its thirty years' life. 

 Under the treaty between the United 

 States and the republic of Cuba, the repub- 

 lic agrees not to create any public debt 

 the service of which, including reasonable 

 sinking fund provisions, cannot be pro- 

 vided for by the ordinary revenues. It was 

 necessary, therefore, for Cuba, before cre- 

 ating this loan, to obtain the acquiescence 

 of the United States Government, and such 

 acquiescence has been given. 



