The Birmingham age-herald., 1913-09-07

tiago de Cuba, compelled vessels to fol-
low devious routes to reach an anchorage.
| An expensive lighterage system was
used to disembark freight. In Havana
these changes have amounted from 81 to
81 per ton. In 1879 Spain by royal decree
provided for the dredging of Havana har-
Dor, but 1t was never done. However,
plans made then formed the basis of the
work subsequently ordered by the Cuban
government, and undertaken by the Ports
company. When the concession was
granted by the Cuban Congress and
signed by President Gomez, Washington
was asked to pass upon its legality.
The American minister to Cuba ex-
amined the law and suggested a modfi-
cation, later agreed upon, to give the
Cuban government 20 per cent of port
receipts over and above $i.50000O per an
mum. The original provided so cents a
| ton ON merchandise from America, 81
from other countries and 10 cents on coal.
| Out of this revenue the Ports company
was to be paid. The company was re-
| organized and capitalized at $4,000 900, and
| bond issue of that amount ordered One
million was sold in Cuba and the United
States; 100000 through Sperling & Co.,
| of London. and 100000 remain unissued.
The directors then were: 7. L. Houston,
president; r. Truffin. Russian consul
| general to Cuba; w. E. Oglevie, manag-
| ing director of the United railways;
| Manuel Otuduy, manager of the Trans
atlantic Steamship company; 4. Gaye
| director of the National Bank of Cuba,
and others prominent in the business
world Subsequently the Il. l.. Huston
| Contracting company was given contract
| Tor the work required under the conces-
Sion lie gave UP the presidency of the
| company, which however under the Gu
| ban law was not necessary, and Eugene
L.. klapp, an associate of William Bar
| clay Parsons. chief engineer of the New
York Subway company, was president,
SIbcontracts were let by the Huston
company, and large amounts invested in
| necessary equipment.
Large Amount Expended
Al the time of the annulment over
$5,00O,000 had been expended IN work.
plus the cost of the plant.
Among the subcontractors affected by
the decree are Macarthur Pecls & Co.
and Enare & Triest of New York.
Michael j. Dady Il Co. of Brooklyn and
the Bowers Southern Dredging COMPANY
of Galveston.
The board of ports, legally provided
Tor, composed of the engineers of the
bureau of ports, the captain of the
port of Havana and company engineer
supervised the entire work Under
the terms of the concession. the Trust
company of Cuba was selected az trus-
tee for the bondholders. This condi-
tion existed for two ana one-half years
with the approval of the Cuban gov
ernment. Frequently the board of ports
| made various changes, agreed to by
the ports company.
Later Goldman. Sachs & Co, 60 Wall
| street. New York. in behalf of English
| principals, kleinworth Sons * Co.
London bankers, inquired of the Ameri-
can state department if the concession
was in conflict with the Platt amend
m Il In. -.
Secretary of State. did not give fun
approval After long negotiations the
American authorities approved the con-
| cess1on with certain ifications.
These We're granted and given in de-
cree mo. 510" signed by President
Gomez. BY 1T Cuba was to receive SO
per cent over receipts in excess of ST.
| 100000. In the meantime revenue in
creased from s5S0,0OO TO more than ST.
| O00,00 per annum Newspapers begun
| to criticize the returns as excessive,
which those interested did not deny. An
impression prevailed an arbitration
would secure additional notifications,
which the ports company would not OPP
pose. Soon after the Inauguration of
President Menocal rumors begun to cir
culate that he intended to kill the "ETl
| Dragado. This gossip resulted in in
quiry from European holdings An Of
| fetal telegram to them read "Presi-
utnt MeHOcdl u1TectS T1e 10 reply 10
your telegram of yesterdays date to
the effect that no alarm should be en-
tertained by legitimate interests; that
| his purpose vs. to Offer solid guarantees
and protection to all investors in the
country and that no measures will be
taken that will effect any respectable
ceived by thee ompany. and they should
Montoro. the Presidents secretary, and
published in European papers
Claim Organization Is Illegal
Some days later the decree annuling
the concession was made. 1t declares
the organization was Illegal; the re-
quired capital not paid in. and it there
| fore was never a commercial entity. 1t
| directed a suspension of port duties re-
ceived by thee ompany. and they should
be held in trust pending legal action.
The ports company contends it has
commercial and legal standing: has
been continuously recognized by the
President and in law suits before the
supreme court and by the payment
of import duties. 1t seeks to show it
| has gone to great expense, made nu-
merous contracts and performed work
as directed by law, and by government
officials. who have had legal super
vision over the works. In short, it con-
tends the ATTEMPT to annul 1t by execu-
tive decree is Illegal and contrary to
the Cuban constitution. In the mean
while work has been suspended and
labor is idle. Subcontractors are asking
pay for work done and are removing
| their equipment.
There are persistent rumors the ad-
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