Evening star., 1926-04-13

Certain Spanish-language newspa-
pers In Cuba started a report last
Saturday that the government was
about to declare a moratorium on all
bank payments, owing to the depres-
sion In sugar prices. The primary
result was immediate excitement all
over the island, eliminating in a
general run on the banks and with
drawal Of cash by depositorS, followed
by rich harvest by pickpockets.
The second result was a magnifl-
cent demonstration Of the far-reach-
ing power OF credit. for within a few
hours after the run had begun Presi-
dent Machado Of Cuba, personally and
with as much publicity as was posi-
BILE, carried to a victim bank. a
branch OF the Royal Bank Of Canada.
SIC, 900 cash and deposited this own
money. Turning to the frenzied
crowd, he announced that, il neces-
sary, he would deposit government
money to the amount Of sac, 0,000, 900,
for there was no cause for the panic
and it should stop. The treasurer Of
Cuba followed the President with a
deposit OF 100000.
AS soon as the news reached the
United States and Canada, money to
the total amount Of $50, 900 900 was
rushed to Cuba, even reQuisitioning a
battleship to carry it safely from Key
West across to Havana This was
real money" not mere book credits,
and in the face Of such tangible as
sets the panic faded and the reassured
depositors hastened to return their
Withdrawals to the banks.
There Is scarcely a native bank in
Cuba which has survived the panic
OF 1922, when the sudden fall Of sugar
from 20 cents to 2 cents a pound
wiped out the assets back OF their
loans to the sugar planters. millers
and dealers.
Practically all banking in Cuba is
done by the National Citizens Bank
Of New York, the Royal Canadian
Bank Of Montreal and the Bank OF
Nova Scotia-all financial institutions
Of such strength that the report OF
alleged embarrassment could be taken
only as an exhibition Of mendacity.
However, the public Is unduly sus.
ceptible to such panic because OF
the debacle Of 1922, when all native
banks failed.
X X x X
It Is probable that there has never
been a more spectacular ralying OF
nations to the financial support OF
u-esl, nation than that OF the United
states and Canada coming to the res
c,,e Of cuba. The rescue further DEM
onstrates how financial interests is-
more national boundaries when they
inyolve the prosperity Of the masses
an both sides of the political limits.
Officials. both of Cuba and the United
States. state, unequivocally. that II
the run had not been stopped IN
stanter it would have resulted in riot
and great distress among the people,
followed possibly with violence against
the government and complete demor'
alization Of the sugar interests. on
which Cuba's chief income depends.
with serious curtailment OF sugar
production in Cuba, the price OF sugar
fhroughout the United states would
enhance, at the expense OF our con.
eumers-and Americans average 100
pounds Of sugar per capita annually.
*k x y
Cuhans declare that the more that
outside capital becomes interesteo IN
| Cuban production the stronger Will
be the influence toward tariff conces-
sions, on which, they allege. Cuban
sugar prosperity depends. Ninety per
| cert of all their exports consist OF raw
H,gar. hence the volume and value or
sugar measure the purchasing power
| of the Cubans in patronizing foreign
! markets for their miscellaneous needs.
During the World War Cuba limited
the maximum price Of sugar to the
! figure recommended by Mr.. Herbert
Hoover, and at no time until after the
ar1nistice was the price higher than 6
cents. In May. 1920. the quotation
was 2o.s cents, and the following har-
vest sold for only 81 to 4.S cents; the
crop Of 1921 sold in the first six
months of 1922 at from LIS to 2.6
cents, and banks which had not fore
seen such fall and had loaned on
higher valuation were wiped out.
Since then the market has fiuctuated
, as high as sc cents, but Is now around
cents.
Il Is the practice Of small planters