20 THE CUB A REVIEW 



1. National Banking Commission. This organization is indispensable and cor- 

 responds in our project to the boards, commissions and commissioners of banks which 

 exist in a great number of countries and which has recently been created in Spain 

 under the name of Superior Banking Commission. We have placed under its juris- 

 diction all the matter of banks and currency, including the inspection of the Reserve 

 Bank of Cuba. We propose that the Secretary of the Treasury preside over said 

 Commission, and we establish requisites to guarantee the aptitude of the persons that 

 are appointed to this board. 



2. Reserve Bank of Cuba. We recommend a real reserv'e bank, like those that 

 have been established in the United States and according to the same American system, 

 down to the point that will be possible under the special conditions of our country. 

 We should state that with respect to the Reserv^e Bank, just as in other parts of 

 our report, we have attempted to make a really Cuban legislation, adapted to our 

 conditions and to our needs. 



This type of bank has already been established in Peru and at the present time 

 there is the intention of creating one in Chile, there also existing a proposition for an 

 International Bank of this character. 



The functions which this institution has in banking economy are principally the 

 following: To increase the facilities of credit, by rediscounting first-class commercial 

 paper for banks; to create a currency which will increase or decrease in accordance 

 with the greater or lesser demands of credits; to sustain the credit of the banks at 

 times of financial crisis; and to contribute to the development and enforcement of 

 the highest standards in the banking affairs of the nation. 



3. Regime of the Banks. The provisions contained in this part of the report 

 are adjusted to precepts and rules which, with a difference in detail, are found in 

 the modern legislation of several countries. This subject, nevertheless, presents great 

 difficulties among us, on account of the diversity of banking institutions — companies, 

 private bankers and branches of foreign banks, in addition to the savings departments 

 of the Regional Societies, etc. — which have been constituted and conduct their business 

 in the Republic without having been obliged to adjust their operations to any special 

 legislation. 



Special provisions for the regulation of agricultural and mortgage banks have been 

 incorporated in this part of the report. 



4. Suspension of Payments, Reorganization and Liquidation of Banks. We have 

 deemed necessary to apply to the banks a different system from that contained in our 

 Code of Commerce on suspension of payments and bankruptcy. The report, therefore, 

 confers upon the National Banking Commission which is created in the first part 

 of the project, jurisdiction to intervene, reorganize and liquidate the banks in 

 accordance with the rules established in Title IV. Experience obtained in the applica- 

 tion of the Law of January 31, 1921, has been taken advantage of in the drafting 

 of this part of the report. 



We recognize all the difficulty that exists for the proper preparation of a general 



project on banking legislation, and that which we have prepared must contain deficiencies, 



which the Commission, in its study, will no doubt correct. Our sincere wish is that 



the project that will be finally submitted to the President of the Republic shall be 



adequate and beneficial in the highest degree possible for the development of banking 



and of credit in the Republic, and animated by this wish we have rendered our 



arduous labor. ^ _ 



cosme de la torrdente. 



Santiago Gutierrez de Celis. 



TITLE I 

 National Banking Commission 



i 



1. A National Banking Commission is hereby created, which shall be made up 

 of five members in addition to the Secretary of the Treasury who will have no vote. 



