24 THECUBAREVIE TV 



It is proposed that the initial paid-up capital should be $4,000,000 in preferred 

 shares, half to be subscribed in Cuba and half abroad. There might be some adequate 

 provision for the maintenance of a balance of power between the directors electee 

 by the Cuban, and those elected by the foreign, shareholders. 



In connection with the project for the establishment of a reserve bank in Cuba, 

 there has been some speculation as to whether or not it would be practicable to 

 form that bank cut of the existing Banco Nacional (which went into suspension of 

 payments in April, 1921, and which has remained closed since that time), gradually 

 liquidating its obligations. The December 31, 1922, statement of the Banco Nacional 

 shows that the bank has among its assets about $49,300,000 in outstanding loans 

 (interest included), a very substantial portion of which will probably be liquidated 

 during the next few months. If arrangements could be made with certain classes 

 of depositors to accept common shares in the new bank in exchange for their deposit 

 claims, it is possible that with the addition of $4,000,000 in actual cash derived 

 from the sale of the preferred shares mentioned above, the bank could reopen for 

 business — the remaining depositors receiving payment in full, upon demand, and 

 the depositors who accept common shares having stock which might eventually reach 

 par. Judging from the latest balance sheet of the Banco Nacional, it appears that it 

 might also be possible at a later date to give the shareholders of that bank a very 

 substantial reimbursement for the shares they now hold. No definite plans along the 

 above lines have yet been placed before the Cuban Congress. It would seem that 

 the attractiveness of the preferred shares to foreign investors would depend upon 

 the investors' thorough understanding of the entire scheme and the provisions for 

 control of the bank's operations by the board of directors and the executive manager 

 elected by them. 



Progress of Bank Liquidation 



Of the 18 banks which came under the jurisdiction of the Provisional Bank 

 Liquidation Commission during 1920, 1921, and 1922, three have now been definitely 

 reopened for business: (1) D. Fernandez y Hermano, S. en C, of Cardenas; (2) 

 Digon y Hermanos, of Habana; and (3) Demetrio Cordova y Compafiia, of Habana. 

 Pending the final liquidation of the remaining outstanding obligations of Digon y 

 Hermanos, the bank liquidation commission continues to exercise a kind of general 

 supervisory control over the bank's affairs. We understand, however, that when a 

 small portion of the accounts collectible of the bank are paid, all of the bank's mora- 

 torium creditors can be satisfied. All of these banks are now carrying on a regular 

 banking business again. 



The . following banks have been definitely liquidated during the past few weeks 

 and all proceeds distributed: (1) J. A. Bances y Compafiia, of Habana; (2) Victor 

 E. Escartin, of Moron; and (3) J. Silverio y Hermanos, of Placetas. The creditors 

 of these banks received practically nothing. It is expected that Alonzo Exposito y 

 Compafiia, of Moron, will be reorganized and reopened within two or three weeks, 

 the depositors being satisfied in full. 



In the interests of the depositors and creditors of the remaining 11 banks, the 

 bank liquidation commission has been obliged to proceed less rapidly with liquidation. 

 In the case of the following banks, however, the commission feels that from the 

 nature of their assets, little will be gained by delaying liquidation much longer, and 

 it is planned to close them up within a very few weeks: (1) Francisco Diaz Vega, 

 of Ciego de Avila; (2) Banco Federal de Cuba, of Cienfuegos; and (3) Proprietarios, 

 Industrials y Arrendatarios, of Habana. The reorganization planned several months 

 ago for Agapito Garcia Llano, of Guira de Melena, failed completely, and this 

 bank will be liquidated as soon as the confusion resulting from the miscarriage of 

 the reorganization plans is straightened out. 



The liquidation commission is now studying the situation of Trillo y Hermano's 

 Bank, of Moron, and of Penebad, Areces y Compafiia, of Habana, but has not yet 



