28 THE CUB A RE VIE W 



Habana Clearing House 



Annual Report and Financial Statement Rendered by the 



Clearing House Committee to the General Meeting 



of Members held February 14, 1922, for the 



First Fiscal Year of the Association 



To THE Associated Baxks of the Habana Clearing House. 



Gentlemen: In accordance with the Constitution, I have the honor to submit, oi 

 behalf of the Clearing House Committee, the following report concerning the affairs am 

 movement of funds during the first fiscal year of the Association. 



The Habana Clearing House was organized on March 24, 1921, by public instrument 

 No. 205, executed before Arturo Manas, Notary Public of this city. Its creation was th( 

 result of the urgent need which had arisen of a place in which to settle the daily exchanges 

 among the solvent banks of the community, owing to the economic chaos following thf 

 moratorium, and to establish a closer relationship between the institutions which survived 

 the crisis, forming thereby a bulwark against the happenings of that abnormal period. 



The Association being formed, it at once became necessary to provide for the exchange 

 of checks between the several banks, and on the invitation of one of our members, the 

 New York Clearing House, an institution of the highest standing, did not hesitate to extend 

 the services of an expert olScer, Mr. Clarence E. Bacon, to establish a modern system in 

 Havana adapted to local needs. Upon his arrival, Mr. Bacon got in touch with the banks 

 and proceeded with the director to organize the work. 



On April 25th the first clearings were effected in the exchange rooms of the Association, 

 No. 71 Aguiar Street, under the supervision of Mr. Bacon, who returned to New York 

 after a brief social stay among the bankers. The exchanges have been held daily since 

 they were inaugurated, and the Clearing House is considered to-day a permanent institution 

 in Cuba. 



Meetings of the Association have been held with due frequency, and they have proved 

 of great value to the members, affording as they have an opportunity for them to take up 

 and dispose of business which could not otherwise be considered. In view of the cordial 

 cooperation shown in all the activities, there seems to be no doubt that the Association 

 affords the sole efficient means whereby our internal banking problems can be readily 

 solved, and those of a public nature discussed, since they are thus brought up for consider- 

 ation before the members as an organization in due form. 



In submitting herewith a Statement of Clearings effected between the banks to date, 

 your attention is invited to the fact that their volume was greater during the first two 

 months of the fiscal year than in those which followed, the minimum having been reached 

 October last, since when they have been gradually increasing. It is also evident that the 

 exchanges as a whole have been far below normal. The figures shown, however, are but a 

 reflection of adverse business conditions viewed in a descending scale until the last few 

 months, but demonstrating at the same time a tone of banking vigilance and reaction 

 which might not be attendant upon the greater volume of prosperous times, since transac- '■ 

 tions during the past year have been conducted largely on the basis of money in bank or 

 cash and not of extraordinary credits, such as are frequently granted in periods of unusual , 

 prosperity and high cost of production, as prevailed in Cuba and in other countries after i 

 the close of the World War. 



The sudden drop which took place in the sugar market in 1920 continued in a gradual 

 manner throughout the year 1921, during which the price descended from 4}'2 cents (c. & f. 

 New York), quoted early in January, to 2 cents approximately on December 31st, when the 

 market for Cuban sugar became open by reason of the dissolution of the Sugar Finance 

 Commission, created by Presidential Decree of February 11, 1921, under which the sale of 

 some 9,742,926 sacks of raw sugar (557,107 and 9,185,819 sacks of 1919-1920 and 1920-21, 



