The Washington times., 1933-10-24
JOB PROVIDED
SON-|N-LAW Of
CUBA CHIEF
Senate Probers Told of Deals
at Time of $50, 600, 900 Ad-
vance to Island Republic
BY International News Service

BY International News Service
The Chase National Bank en-
ployed Jose Amelio Obregon, SON.
in-law of President Gerardo Ma
chado of Cuba, in its Havana
branch, although one official
called him perfectly useless"
while it was lending 100000, 900
to the Cuban government, it was
disclosed today at the Senate
banking inquiry.
The bank ais omade personal
loans to former President Me-
chado, to the former Secretary of
Public Works Carlos Miguel de
Cespedes, and to different COM
panies owned by the former resi-
dent of Cuba. The bank dealt
directly with Machado and Ces-
pedes in negotiating the govern
mental loans.
Letter Bares Loans
Revelation of the employment
Of Obregon and the loans to the
government officials came from
a letter written Joseph Rovensky,
a vice president of the bank, by
John Bruce, another vice presi-
dent, who was sent to Havana
in February, 1881, to investigate
conditions there. The letter was
read into the record by Ferdi-
nand Pecora, special Senate coun-
sci.
Bruce described Obregon as
perfectly useless" but pleaded
for his retention in the office,
because otherwise President Ma
chado would have to give his
Son-in-law ma allowance. This
description of Obregon drew a
burst Of laughter from the host
of Chase officials attending the
hearing.
Bruce reported, in the letter,
that the personal loan to Presi'
dent Machado then totaled $780,
600. He added that Mestra and
Machado, one of the Presidents
private companies, owed the bank
$45,O0O while the Presidents shoe
factory owed $4,000 originally,
but had reduced the debt to
$4,000.
Cespedes Repair Advances
Bruce also told his superior
chat Cespedes, the cabinet officer
in charge of public works, had
borrowed 100000 from the bank
but repaid it all. His comments
on these loans frequently drew
bursts of laughter from the Chase
officials.
The committee decided to ask
the State Department to pro.
duce its records on the Chase
loans to Cuba. This action will
be taken to determine whether
the State Department in ap
proving the loans considered the
section of the Platt amendment
which forbids Cuba to incur
debts which cannot be refunded
F'from ordinary revenues.
At the start, Alfred E. Nudge
one of the Chase attorneys, testi
fled the State Department had
approved the first Chase loan of
$10,000,000 to Cuba in February
1927. He produced a letter from
LELAND Harrison, then Assistant
Secretary of State. saying the
department had no objections
to the loan. ..'''
Debt Paid With Funds
The Chase loan, Nudge ex-
planned, was made to cash public
works certificates which were gov
ernmental 81. o. US" given con-
tractors on public projects. Un
der questioning by Pecora, he ad
mitted these certificates were "a
contractual obligation of the
Cuban government"
"They constitute public debt
Of Cuba?"
"They were a type Of public
debt, but not the type of public
debt referred to in the Cuban
constitution and the Platt
amendment"
Pecora said the Platt amend
ment prohibited Cuba from con.
tracing a public debt which could
not be refunded from ordinary rev,
enues, whereas, the Chase loan
was being refunded from special
revenues.
The Bruce letter created a sen
Sation in the committee room
Touching on the loans to Macha
do and Cespedes, Bruce wrote:
"The Presidents personal
loan is now S13O,OOO and he
promises to pay it off within
80 days. I should doubt very
much whether he does this.
"The loan to MeStre MachadO
now is about $45,OOO, unse-
cured. We had a proposition
from them stating they would
pay this off il we would loan
them S145,OOO on Cuban in
ternaI government bonds at
market value without margin.
We decided that we would
rather take our chances on
losing $4,000, than to put up
an additional 100000 into un-
marketable securities, to this
items remains the same.
"You are familiar, of course,
with the transaction by which
Sheriff. and ROSenthall col
lected $500, 900 from Cespedes
as think this should have also
been eventually a loss and col