New-York tribune., 1922-01-25
American Bankers
Lend SIS, 100000
TO Cuba for Year
ls|ard CovcrnmentRcquircd
10 Institute Certain Budg-
ctary and OiI,cr Reforms
Expected 10 End Crisis

Consummation yesterday of a tempo
rary advance of $4,000 900 to the Cuban
government marked the first financial
assistance TO tho islands administra-
tlon by American bankers to result
from negotiations that have extended
Slncc the declaration of moratorium
i'll October. 1920. The Significance of
tho loan depends largely from the fact
that as n condition to its arrangcmcn It
Cuba was required to institute certain
hudgctary and other financial reforms
that arc regarded as assuring tho
emcrgcncc Of the island from the re-
cent GRO is to sound basis.
Closing of the loan was made the
subject of the following announcement
by the Morgan firm:
"A group of New York banks and
bankers. consisting Of j. P. Morgan &
Co, Kuhn, Loeb e. Co., the National
City Bank, the Guaranty Trust Com
pany, SHE Bankers Trust Company,
}. & w. Seligman e. Co., Harris,
Forbes & Co. and Dillon, Read E. Co.,
have madc'a one-year loan of Sc, 900 900
to the Republic Of Cuba, the proceeds
of tho loan to be used for the pressing
immediate needs Of the republic. 1t is
not planned to make any public offer
ing o. this loan
Tho form of the loan is understood
to involve the acceptance at 991a by
the bankers OF Cuba's note for the
amount, bearing interest at per cent
The operation forecasts larger and
more permanent financing for the ISL
and. q loan up to $o0,000.00O and in
Nolving a public offering, being in con-
temptation. The date and details of
this financing are still indeterminate.
Dwight W. Morrow, of J. p. Morgan
& Co.. in commenting upon the loans
consummaton. reviewed the conditions
leading to a crisis in Cuba, cmphasiz-
ing the Drccipitate drop in the price OF
sugar and complication OF the situation
by the fact that 4 large part of the
governments funds were in the Banco
Nacional. which suspended payment
last April. Mr.. Morrow, continuing,
said:
"W hen President zayas took office
IN May. 1921. he was confronted with
very serious situaton The govern
ment had outstanding checks. with no
funds in either The bank or the treas
ury to meet them. President Zayas
Immediately began the reduction Of ex-
pcnses and the revision of the budget.
At the same time he has been en-
deavoring to bring about some modus
vivendi with the government Of the
lnltcd States with reference to tariff
matters. the emergency law Of the
United States having added an add
tlonal siN-tenths OF a cent pound to
the duty OH Cuban sugars entering the
United States.
"'Ihc govcrnmcn. Of Cuba has been
very fortunate il having the hearty
cooperation OF General Crowdcr, who
has been in tho island since the carly
part of last year as the personal rep
rcsentatiVe Of the President Of tho
United States. With some Americans
Cuba is Il governmental problem, with
some a business problem. with General
Crowder it is a religion.
"'Thc present Cuban administration
II view Of the condition in which it
found the country when it assumed
Office, has done in the last eight
months remarkable piece Of work, due
iii no small measure to the close CO.
operation between President Zayas and
General Crowdcr. President Zayas is
determined TO balance the budget and
already has taken drastic measures
toward that end. His industrial prob
lem is. Oh course. greatly complicated
by the abnormal condition Of the sugar
ndgstry' something over 100000 tons
of last years crop being unsold on
the Cuban Sugar Commission there has
been al uncontrolled market, and
sugar has been moving freely and Al
higher prices than prevailed few
weeks ago. While Cuba has q very
trying period ahead of her it seems
10 me that the island has passed
through the worst. and that from now
on there should be slow but steady
recovery