THE CUBA REVIEW 25 



formulated any definite plans for their final liquidation. It is believed that through 

 careful execution of the liquidation plans drawn up for the Banco Hispano Cubano 

 de Oriente, of Santiago, the depositors may receive 80 per cent, or even more, 

 of their deposits. The plans regarding the Banco Nacional and the Banco de Espaha 

 are still in suspense; their former great importance as banking institutions requires 

 that unusual care be taken in handling their affairs. 



A device for automatic liquidation has been authorized for a number of banks. 

 Debts owed to these banks can be paid in checks against accounts which were on 

 deposit with those banks at the time they went into suspension of payments. These 

 checks are being dealt in on the curb — and some of them on the stock exchange — 

 at prices ranging from 35 per cent down to practically nothing, and have been 

 to a considerable extent actually purchased for employment under the above-mentioned 

 privilege. 



New Sales T.ax in Force 



For the purpose of providing adequately for current budgetary expenses, especially 

 in view of the incireased charge resulting from the service of the $50,000,000 loan, 

 a so-called 1 per cent sales tax was put into force on December 1. No data are 

 available at present upon which estimates of the proceeds of this tax can be based. 

 The tax is on sales in general, and upon receipts from certain specified services. 

 These services include those rendered by contractors; warehouse men; owners of docks, 

 shipyards and dry docks; light and power companies; hotels and restaurants; tele- 

 phone and telegraph companies; and a few others. It is one of the principles of 

 the tax that, in general, agricultural produce destined for exportation, when sold 

 direct by the producers, shall not pay the levy. A certain amount of dispute 

 has arisen as to the applicability of the tax on sales of such products for export, 

 when consummated through the intermedium of commission agents. American pur- 

 chasers of tobacco will be interested in the decisions of the legal advisers of the 

 Cuban Treasury Department, which are expected any moment, regarding this point. 

 Sales of raw sugar for export are expressly exempted. 



The tax is collected on sales of merchandise of foreign as well as of domestic 

 origin, without discrimination, and is payable by representatives of foreign concerns 

 operating in Cuba on a profit-sharing, commission, or salary basis. As it is not 

 intended that the tax shall be collected on sales which actually and technically take 

 place abroad, a series of decisions is expected shortly, defining the locus of sale 

 under various methods of merchandising and business organization in the export trade 

 to Cuba. 



While the sales tax would appear to be such a small item that there should be 

 no difficulty about collecting it, it amounts to a very important item in many cases 

 (such, for instance, as in the case of incomes received now in lump sums for services 

 rendered before the law was enacted or went into effect, and receipts on contracts 

 made before that date). The foregoing indicates the complicated nature of the 

 problem of correct and just application of the 1 per cent tax. Many points of 

 dispute and interpretation are now being studied by the legal advisers of the Cuban 

 Treasury, which may be expected to issue its decision shortly. 



Bonded Warehouse Situation 



The congestion at the port of Habana, caused by the accumulation in 1920 

 of over $100,000,000 worth of merchandise not taken away from the customs by 

 the consignees, has now become a matter of history. The Cuban authorities have 

 commenced to dispose of the abandoned merchandise in several of the general-order 

 warehouses, and expect in the course of the next few weeks to have this task completed. 

 Merchandise declared in bond (deposito mercantil), most of w'hich was placed in 

 private bonded warehouses, will not become technically abandoned until the expiration 

 of three vears from the date of arrival at Habana. In the meantime this merchandise 



