Evening star., 1933-10-24
Evidence U. S. State Depart
ment Knew He Was Short
in 1881 Given Quiz.
SENATORS SHOWN LETTER
TELLING OF TRUST FUND
Reveals Cuban's Son-in-Law Was
Paid Big Salary, Although
Described as Useless"
BY the Associated Press.

by tne Associated FreSS
Evidence that former President Ma
chado Of Cuba used $4,000 900 out Of a
$4,000 trust fund with the knowl-
edge of the American State Department
was presented today to Senate investi-
gators.
A letter from the files of the Chase
National Bank disclosed the now de-
posed President was 100000 short in
the fund in 1881.
The letter, from one Chase official to
another, said the matter was worrying
the President and our own State De-
partment."
Ferdinand Pecora, committee counsel.
read the letter into the record, but did
not Immediately go into the trust fund
affair.
The same letter reported that Ma
chado's son-in-law, who was EMPLOYED
by the Chase Bank in Havana, was
useless from business standpoint" but
recommended his retention because
otherwise Machado would have to give
him an allowance.
Large Loans Disclosed.
Large loans to Machado and his COM
panies, some of which were still out
standing at the time, were disclosed by
the letter
1t was identified by A. K Geiger, sec
ond vice president of the bank, who
was on the witness stand.
The trust fund incident was virtually
unnoticed by the committee as Pecora
hurriedly read it into the record.
Loans of more than 100000 to for
mer President Machado by the Chase
National Bank also were disclosed.
Geiger read a prepared statement
outlining the loans to Machado and
asserting they had no connection with
the huge loans made by the bank to
the Cuban government.
Referring to Machado using $50 1000
he had borrowed on a personal loan
from Chase, Bruce said:
In this connection, a matter which
is most important and which I could
not touch over the telephone except very
slightly to Mr.. Eddy Ia Chase oficial)
is the fact that the President had prac-
tically gotten to the bottom of the
trust fund, which of course, he had
no business in using
Both Parties Worried.
The funds are down in the neighbor-
hood of approximately S3,0000 900 and
they should be around Sl2,000,000.
This money will have to be replaced
at some time as the chief trust fund is
a pension fund, although there are
various others which ! have sent to
you with other data"
Naturally the public do not know
about this, although why they should
not get on to it do not know but it
is worrying both the President and our
own State Department very much.''
Pecora developed that although no
commissions were paid in connection
with obtaining the Cuban loans. the
Chase Bank paid more than $3.50, 900
for attorneys fees.
Geiger said Henry Catlin, former
member of the banks Advisory Com
mittee in Havana and now dead, was
paid S55,000; Enrique Cartaya, Cuban
lawyer and former member of the Cuban
cabinet, S87,500; Antonio Bustamente.
another Cuban lawyer. s50,000. and
Rushmore. Bisbee g. Stearn of New
York. $4,000.
S392,04 Unpaid Loans.
Asked about Chase loans to Catlin.
Geiger had long prepared statement
Whlch showed Catlin had an overdraft
on the Havana branch of $4,000 when
ne died September 81, 1882, and un-
paid loans from the New York Office
of S392,O74.
Pecora brought out that some of
the payments made to Catlin for legal
services in connection with the Cuban
government loans were made while the
oVerdraftS were unpaid
Geiger said he did not know why
this was done.
turning to the second financing In
1923. Pecora called attention to a
letter from Obregon to the Chase Bank
just before it was consummated.
Inc PRESIDENTS Son-in-law wrote ne
had talked with Machado and the
secretary of finance and that they
were not contemplating any financing.
1t was the first evidence that OBJ
RECON had any connection with the
loan negotiations.
The letter reported Machado's son-in-
law was perfectly useless" as an en-
ploye OF the banks Havana branch. but
recommended his retention because
otherwlse the President would have to
give him an allowance.
Inc letter was written by James
Bruce to Joseph Rovensky, both Chase
officials in 1881.
Bruce reported the Presidents son-in-
law had no ability for banking or for
negotiating and his only possible value
was in entertaining important Gus
toners
Chase officials denied In the former
inquiry that Obregon got anything more
than his salary of $4,000 to $4,000 in
conjunction with the financing, most
OF which was done during his attach
ment with the bank.