14 THE CUBA REVIEW 



Organization of the Habana Clearing House 



The "Habana Clearing House" was organized on the 24th of March, 1921 (the 

 first clearings being effected on the 25th of April. 1921) and the member banks at 

 that time were the following: X. Gelats y Ca. : Pedro Gomez Mena e Hijo; the Royal 

 Bank of Canada: the Trust Company of Cuba: the Bank of Nova Scotia; the National 

 City Bank of New York: the Banco MercantU Americano de Cuba: the American 

 Foreign Banking Corporation of New York: the Banco del Comercio: and the Canadian 

 Bank of Commerce. 



The Banco Mercantil Americano de Cuba retired on October 15. 1921, and on 

 May 15, 1922. the Trust Company of Cuba, the former having been closed, after 

 fulfilling completely all its obligations, and the latter having ceased to engage in the 

 business of banking. 



FOREWORD 



Following the Moratorium promulgated by Presidential Decree of October 10, 

 1920. many prominent foreign bankers xisited Havana, among them two recognized 

 authorities in financial matters suggested by the .\merican Government. They unani- 

 mously expressed surprise that in the financial center of a countn.- of Cuba's con- 

 spicuous economic imp>onance no Clearing House existed. 



Today, in progressive countries, there is hardly a community of financial importance 

 insignificant compared with that of Havana which has not its Clearing House. While 

 the priman.- function of these institutions is to pro\-ide a mechanical procedure for 

 daily settling balances of member banks resulting from the exchange of checks — see 

 Article HI of the Constitution herein — and they offer no remedy for insolvent banking 

 institutions, nevertheless, supponed by public confidence in the solvency and integrity 

 of their members and as the recognized representatives of the financial community. 

 Clearing Houses throughout the world have time and again taken decisive action in 

 periods of financial crisis and have protected business and the public from unneces5ar\' 

 distress and loss, which are ine\-itable if imjustified alarm is allowed to degenerate into 

 panic. Cuba has sufiered this deplorable fate following the Moratorium. 



"While losses were ine\-itable as the result of business deflation general throughout 

 the world, and esi)ecially the collapse in the price of sugar. Cuba has nevertheless 

 suffered tremendous losses from the entirely unnecessan.- destruction of credit. Lament- 

 ably it must be confessed that a large part of it has been due to a woeful lack of 

 cooperation and initiative on the part of the members of the banking community. 



The formation of the Habana Clearing House is therefore one of the constructive 

 measiu-es which are imp)erative for the rehabilitation of credit in Cuba on sound and 

 con5er\-ative bases. Its By-laws. Rules and Regulations have been compiled from 

 authoritative sources, and the requisites for admission — see Article \TI of the Con- 

 stitution — and the assistance and counsel which its members offer one to another, 

 are an assurance to the pubhc of their solvency and standing. 



The incorporators take this opportunity of thanking the President and members 

 of the New York Clearing House for their courtesy and interest in our financial com- 

 munity in lending the services of Mr. Clarence E. Bacon, whose long practical experience 

 in that great institution has served to put the Habana Clearing House into successful 

 operation imder his pjersonal direction. 



I 



N.AME .\XD Domicile of the Assoclatign' 



TTie Association shall be known as the Habana desiring House; it shall be governed 

 by this Constitution, the provisions of its By-Laws and the Laws of the Republic 

 of Cuba. Its domicile shall be in the citv of Havana, number 71 Aguiar Street, which 



