THE CUBA REVIEW 21 



institutions, the Banco Nacional de Cuba, paid its depositors 35 per cent before it had 

 to suspend payment. 



On January 31, 1921, the President of Cuba signed a law passed by the two houses 

 of Congress, creating a "Comision Temporal de Liquidacion Bancaria," the members 

 of which were to be appointed by the President, with the exception of the chairman, 

 who was to be the Secretary of the Treasury, and a member ex officio. This commission 

 was empowered to assume control of all banks suspending payment under 

 the provisions of articles 870 and 871 of the Cuban Commercial Code. They 

 were to act through a liquidation committee, representing the owners, depositors, 

 and creditors, of each bank concerned. Under the terms of this law banks 

 suspending payment must present to the commission, liquidation committee, and 

 creditors, within a certain specified time, a proposition for reorganization. This proposal 

 must include a plan for payment of liabilities within one year, provided losses did 

 not exceed 50 per cent of paid-up capital. If the losses exceeded 50 per cent, the 

 bank must be liquidated. 



Banking Failures 



The reorganization provided for under this law has been most difficult to carry 

 out, owing to the nature of the assets of the bank concerned, which with four excep- 

 tions consist largely of sugar properties on which up to now it has been impossible 

 to realize without incurring practically total loss. As the law provides for payment 

 of all Habilities within one year after suspension of payment, the result has been that 

 the majority of the banks are at present in process of liquidation. 



During the year 1920 there were no cases of banks suspending payment, as they 

 were able to take advantage of the terms of the moratorium and continue in business. 

 During 1921, 17 banks suspended payment, and one, the Banco Mercantil Americano 

 de Cuba, went out of business. In 1922 one bank has suspended payment, and the 

 Trust Co. of Cuba has closed its general banking business. 



The suspensions during 1921 included the three most important Cuban banking 

 institutions, the Banco Nacional de Cuba which closed its doors on April 11, 1921, 

 with liabilities amounting to $81,660,127 and declared assets of an equal amount. On 

 May 23, 1921, the Banco Internacional de Cuba suspended payment, with liabilities of 

 $13,013,321, and assets the same. The third important institution to suspend payment 

 was the Banco Espafiol de la Isla de Cuba, on June 6, 1921, assets and liabilities, 

 respectively, $47,580,846. 



The other 14 banks which closed during 1921 were the Banco Federal de Cuba, 

 of Cienfuegos, on March 1; the Banco Trillo y Hermanos, of Moron, on May 9; the 

 Banco Penabad, Areces y Cia., on May 10; the Banco Demetrio Cordova y Cia., on 

 May 10; the Banco Digon Hermanos, on May 11; the Banco Agapito Garcia Llano, 

 on May 14; the Banco C. Fernandez y Hermano, S. en C, on May 16; the Banco 

 Francisco Diaz Vega, of Ciego de Avila, on May 30; the Banco J. A. Bances y Cia., 

 on June 1 ; the Banco de Propietarios Industriales y Arrendatarios, on June 

 14; the Banco Victor E. Escartin, S. en C, of Moron, on July 18; the Banco 

 Hispano-Cubano de Oriente, of Santiago de Cuba, on October 1 1 ; the Banco Alonso 

 Exposito y Cia., of Moron, on November 7; and the Banco J. Silverio y Hermanos, 

 of Placetas, on December 6. 



Only four of these banks had assets or liabilities equal to $1,000,000, namely, the Banco 

 Dignon Hermanos, with liabilities of $2,348,109 and declared assets of $400,000 more 

 than that amount; the Banco Demetrio Cordova y Cia., assets and liabilities, $1,483,996. 

 respectively; the Banco Hispano-Cubano de Oriente, assets and liabilities equal, at 

 $1,282,519; and the Banco J. A. Bances y Cia., with liabilities of $1,243,424 and 

 equal assets. 



The old and important private bank of H. Upmann y Cia., establis" ed in Cuba 

 for about 85 years, suspended payment in May, 1922. Every attempt was made to 

 save this bank by the bankers belonging to the local clearing house, who considered 



