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FEDERAL RESERVE BOARD
WASHINGTON
X- 3832
Septerrber 8, 1923.
SUBJECT:
MEMORANDA ON. CUBA~
Dear Sir:
For your information there are enclosed herewith~
copies of a memorandum and statements presented to the
Federal Reserve Board by representatives of the Government
of the Republic of Cuba at an informal conference held in
Washington on September 6, 1923.
Very truly yours,
Wm. W. Haxton,
General Secretary.
TO ALL FEDEP..AL RESERVE AGENTS·
j
•
X-3832-a
COPY
Washington,
»-
C., September 67 1923.
'.,
TO THE COVERNOR AND MEMBERS OF THE FEDERAL RESERVE BOARD:
The Republic of Cuba pays its tribute of
r~rd
admirati~ to
the magnificent
B~ard in
the world field
•f achievement made by your Federal Reserve
of economics and finance.
We esteem it a privilege therefore to place our problems and successes
before you so that we may not only have the benefit of conference and advice
with you but also that your people
may
better understand the real conditions
presently existing in Cuba.
We fe'el great pride in the present financial, economic and political
condition of our Republic.
The present administration has had many and
co~
plex problems to solve since the financial and industrial chaos Which existed
in 1920 and 1921.
That
th~y
have been
s~lved
is fully attested by the present prosperity
and happiness of our country ,and its people.
Scme unrest may exist but it
is negligible compared with the general world unrest of today.
We are
the only nation whose war debts have been fully liquidated.
Our treasury has a reccrd balance of over twenty-five millions of dollars.
All acGrUed obligations have been
pr~mptly
~t.et,
and we are paying all charges
as they mature.
'!he Is-land of Cuba has an area of about half that of Great Britain.
1ts
p~pulation
1902, was
at the time of the foundation of the Republic on
ap~~
1,500,000.
~
20,
X- 3832-a..
-2-
On December 1, 1922, it had increased to J,l2J,04o people, or, say
65
per square'mile as against 480 per square mile in Great Britain.
Yet
the total annual trade per head of the fixed population of Cuba is about
the same as the total annual trade per head of the population of the United
Kingdom.
It is the largest
~gar
producing country in the world and yet
not more than 12% of the land of Cuba is under cultivation.
POLITICAL STATUS:
Our Constitution, largely fashioned after your
own, ·guarantees the same protection to life 1 liberty and property.
Our
fresident~
liberal statesman and profound student that he is, has so ad-
r::-.i.nistere~
the affairs of our governrr.ent for the past two years that our
liberty ane1 property rig:1ts have been conserved andrespected, that the confidence and credit of our people and our institutions have been restored,
our trade has made new high records in stability, our education facilities
have been increased and our financial status is more
~ealthy
and prosperous
than ever before in the history of our Republic.
Our Congress and our people recognize the effort and accorrplishment
of our Executive by
SANITATION:
improving.
giv~g
him everJ. evidence of confidence and support.
~overnment
This essevtial feature of our
is constantly
This administration is following the standards and methods
so successful under General Leonard Wood and Dr. Gorgas.
At present there are no quarantine cases.
Small pox has been co~
pletely obliterated and is now unknown within the confines of the Republic.
The administration maintains a permanent service
in
all parts of the RepubliC
to fight the mosquito andother insects that breed infection and disseminate
'
.
-3disease.
Vaccination is
obliga.tory~
X-}832-a.
That these
me~hods
'('{2:J
have been effective
is best demonstrated by the mertality rate of the Republic, conparedwith
other
coun~ies,
M~rtality
statistics for the year l92l, showing England
12.,4 per 1,000 inhr..bitants; the United States, .12.9 per 1,000; Cuba, 15.36
per l,OCO; France,
17. per l,OOOj Austria, 19. per 1,000; Spain, 23.8 per
1,000.
The city of Hav&na is
~econd
only to New York in
~ortality
statistics.
?'
New York City, 18 .. 4 per 1,000; Havana, 19 .. 9 per 1,000.
These results have been acquired through the ability and fidelity
of the highest class of Cuban citizens who have given their time and effort
toward improving the sanitation of the Republic.
Probably the most notable progress of Cuba during the past
ECONOMIC:
two years was in the field of econorey and
Q.ate trf the birth of the Republic.
finance~
M9.y 20th, 1902, was the
Its first budget provided for expenditures
of $16,200,757.26, and its inceme for that year was about the same
fi~re.
Twenty-one ¥ears have passed and the present budget for e.xpendi tures of the
Republic is $61,672,169.23; its income, if we may take as a basis the month
of July of the current year, which is the first month of the fiscal year,
was $9,183,000.00, or at that ratio over $100,000,000 a year.
Our Republic passed through a great economic crisis during the years
1920 and 1921, due to the after-war conditions and the sudden drop inthe
price of sugar.
was
.~
~
1b.is administration which took office on !V'..a.y 20th, 1921,
co:a,fronted with grave and serious political and economic
"HoWiwer,~r-~of
scientious,
~1"\amoc.J)e.t,i..c,
the country, and the con-
met.hods have, in less than twcr y.ea.rs,
•
again
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X- 3832-a
restored the Republic to a sound and conta1ted economic and political
condition.
Today we are enjoying a more prosperous condition than@ever
before in our history, having in the Tr0asury of the Republic on August 16,
last, in excess of $25,00G,OOO, after having paid all of its budget obligations
that had accrued, and having during the month of August last, paid its obligation, principal and interest, to the United States for its war indebtedness.
The Republic of C'J.Oa in order to pay 5. t:: v . :::.;rC:'J~3 of tl:J
dependence and to frovide funds for the
fo~cr1da.tion,~J.nd
;p::~,r
of
In-
continuance of its
existsnce as a Republic, and to cover the cost of sanitation, drainage, roads,
and other improvements necessary to the governrr.ent, h&s negotiated various
external and internal loans.
The external loans were as follows:
Speyer & Co. 1904,
Speyer & Co. 1909,
Loan, $35,000,000
en which there is now due ..•••••..• $ 21,062,500.00
Loan, $16,500,000
On which there is novv due ..........
15,298,0CC.OC
Co. 1914, Loan, $10,00J,JJC
On which there is now uue •....•••.•
8,650,000.0J
J.P.Morgan & Co. Last Loan, $50,000,000
On which there is now due..........
49,749,000.00
J.P.Morgan
It
rr~y
&
be interesting to note that tne Cuban Government bas only
utilized part of the last Morgan loan, the balance oeing on deposit in
New York, earning interest, subject to the order of the Cuban Government ..
For the amortization of the principal and the payment of interest of
these loans, the national budget rr.akes provision each year.
This year
that item amounts to $12,240,000.
The important income of the Republic is derived from the customs,
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X- 3832-a
fiscal z~nes, postal and telegraphic service, revenues from taxation, and income from the various properties b&L:.)r.6 tc t:"'c o~v-oLli,_:i-,t.
The Cubans pay a taxation of
$22.03
per ca~ita, which is the lowest
tax rate per capita of any country in the world.
Its great economic wealth
is due to the fact tl:'..at it occupie8 first ,place in the world as a sugar producing country.
At present it nas
183
S1.tgar mills with capacity for _f;roducing
mere than 6,000,000 tons, annually.
Impcrts to Cuba from the United States during· the fiscal year of
1922.-23
amounted to $154,175,10G.OO.
from Cuba were
During the same period the exports
$379,939,637·
Our dQvelopment, therefore, both internal and international, is dependent
to a ;.ery large extent on the economic pel icy whidl the United States may
pursue with respect to ow· CGU.itry.
Acc2rd7.ng to recent investigation the
capital of .Arr.;;.rica.."l citizens inv.;;sted in Cuba in the sugar industry and other
tusin8ss exce6d~ the sum of $1,000,~00,000.
merchandia~
The United States s0ld Cuba
for valua as nigh as $500,000,000 in a single yearj so that
cc~ercially
and industrially, the national prosp0rity cf each of our
Republics is in a great measure at least dependent upon each other.
I ncglect8d
t~
mention another feature that seems to me very important.
The total funded Cuban d~bt, external and internal, amounts to $43.00 per
capita, as
States, and
cC'mp~red
$275.00
with appoximatdy $208.00 per capita for the United
per capita for Canada.
In making such
corr~drison
it
should be noted that the political subdivisions of Cuba, with the exception
of the City of Havana, have practically no funded debt.
The people of the
Unit:::.d States and Canada, however, hav0 to consider in their taxation programs
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X-3332-a.
!"':-.
· !iot only the service of their na.tional debt, but also the service of a. substantia.l public debt created by political end edministrative subdivisions.
It is a matter of pride to the 1\.epuolic of Cuba, tha.t, while there was
unfortunately a. temporary cessation in the payment of the interest upon the
interna.l debt during the commercia.l and financial crisis of 1921, the Republic
of Cuba has never in its histo.ry defaulted in the payr1ent of the principal or
interest of any of its external debt.
I lea.ve with you the official Gazette of the Hepublic of Cuba under
date of June 30, 1923, setting forth a. detailed and complete sta.tement of
the budget for the fiscal year 1923-24, a. nsume of Nhich will be found on
pagi'
358;
also two statements from the Secretary of the T.re8sury ,- one showing
the national income for the rmnth of July, 1923, the first month of the p:resent
fiscal year; and the o the.t' showing the cash on hand a.s of August
16, 1923.
Ilefore concluding rr.a.y I, speaking for the President of Cuba and the
Cuban people, :reiterate our continued appreciation for the counsel, odvice,
aid and cooperation of your Government.
Our friends and allies in 1893 in our struggle for independence are
still our cherished friends today in our prosp,':lri ty snd success.
The spirit that has animated :Jnd prompted the continued helpful aid
and advice was so well described by your distinguished Sec-retary of State,
Mr. Hugpes. in his recent speech in Minneapolis, ;;hen he said "We have acted
as the friendly adviser of the Cuban Gov2rnment, our action has been solely
for the purpose of aiding in rr..a.intaining the independence and stability
of Cube end thus not to create but to preclude the necessity of inbrvention.
11
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X- 3832-a
We want to lmow you better and on a more intimate basis.
We believe
that meetings such as these are conducive to a better understanding of our
respective problems, and will lead to more business m1d
countries.
~rosperity
to both
It is our hope that there will be frequentrepeti tions of similar
meetings when we can frankly discuss and advise with you concerning our
problems so that our people wi 11 not alone profit socially and financially,
but that we rr.ay have fran:zer expressions of our difficulties and discourage
gossip and misinformation which we believe has largely been the cause of
misunderstanding in the past •.
(Signed) Celso Cuellar
X-3832-b
Republic of Cuba
Department of Finance
Revenue collections during the month of July according
to telegraphic reports.
Customs
$4,258,000.00
'Fiscal zones and districts
4,09 7,000.00
Lottery
528,000,00
Coranunic a. ti on s
,2200,000.00
Consular
100,000.00
Total
$9,183,000 .. 00
Ha.bana, August 17, 1923.
(Signed)
Central Auditor of Finance.
,~
X- 3832-c
Republic of Cuba
General Treasury
Habana
Eduardo Y Montoulieu, General Treasurer of the Republic ad interim
certifies: that the cash holdings of th8 General Treasury on August 16, 1923
are $25,030,694.70, Twenty-five million thirty thousand six hundrec;l and
ninety-four pesos and seventy centavos, composed as follows:
In Vaults:
Gold in $20 coinsII
11
11
10
11
II
5
II
II
II
4 "
II
2
"
"
Silver in $1 coins
"
II
"
II
Nickel
II
11
II
If
II
"
II
~. 4()
II
o. 20
II
0.10
0.05
0,.02
0.01
II
u
II
II
American Money
Gold in $20 coins
II
II
10
II
II
II
5
II
Notes of $10,000
II
II
5,000
II
II
1,000
"
II
500
II
ll
100
II
50
II
II
II
20
II
tl
10
II .
II
$30,000
610,000
535,000
5,000
10,000
209,500
186,000
725,000
144,000
109,950
25,750
58,020
555,000
370,000
300,000
60,000
denomination
II
15,000
II
14,981,000
n
3,496,000
II
899,000
II
6oo,ooo
II
5
130,000
80,000
tl
1
5~000
II
II
33,000
26,000
Silver in $0.50 coins
II
II
Q.25
II
49,000
1,050
Copper " 0.01
"
$24,277,870
/ Total
II
II
In vault $24,277,870.00
Auxiliary
cash holdings 752,824.]0
$25,030,694.70
In witness whereof I have made out the prdsent in quadruplicate at
Habana on the 17th day of Augui\>t of the year nineteen hundred and twenty
three.
(Signed) E.. Y. Montoulieu
Seal: (Repub lie of Cuba
General Treasury)
@FedFRASER