Cuban investments; an intimate statement of investment facts existing in the republic

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FACT BOOK
NUMBER FOUR

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CUBAN

INVESTT^NTS

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CUBAN INVESTMENTS

An Intimate Statement of Investment

Facts Existing in the Republic,

with some Comparisons

on Securities in the

United States.

Copyright 191 6

By the

Bankers' Loan & Securities Company

New Orleans Louisiana

U. S. A.

■^uuuiLLiLiT!/ F n?'7

^^ . ,. Bancroft Ubrary O \ ^"^k

>il^< ^ Universify of Califorofa O \ ^-^

CUBAN INVESTMENTS

THE investor of large or small amounts located
in the United States today, occupies an
eminent advantage over any period in the in-
vestment history of this country.

The securities of the world are today being
absorbed in this country, as well as are the se-
curities of our own country. As a matter of fact,
a very small proportion of United States' in-
vestments is finding markets outside our home
borders.

The reason for this is very evident when we
stop to consider that higher rates of interest
are procurable, owing to extraneous conditions
brought about primarily by the war in Europe
and the consequent elimination of physical
values in European states.

The gold of the world, which represents the
true credit value of the world, is being rapidly
concentrated in the United States and on this
basic value is being built up an immense balance
of trade, which will remain unshaken for many
years after the belligerents of Europe conclude
to settle their differences and return to peace
conditions.

During 191 5, on account of the curtailment of
imports, and the great increase of exports, as
well as the stoppages of large expenditures by
American travelers in Europe, there was the
greatest trade balance in favor of this country
that has ever been known i^ the history of our
Commonwealth.

According to the Comptroller of the Currency,
we had, at the close of 191 5, $2,312,000,000.00

Cuban Investments

gold specie on reserve in this country. To one
who appreciates the immense credit power made
available by such a vast sum of the precious
metal, the condition becomes enormous. It is
almost impossible to calculate the amount of
credit that can be built up on this sum of gold
held in our vaults.

Since the report of January 31, 191 5, this
reserve has been constantly increasing, and the
credit of the country increasing proportionately,
with the result that today loans are far easier
in all banks and the borrowers with established
credit and proper securities find lower rates of
interest and easier accommodations than have
existed during the past twenty years.

The following table illustrates the gold specie
reserve of this country for the past ten years:

1906 $1,587,000,000

1907 i,6o5/x»/x>o

1908 1,653,000,000

1909 1,638,000,000

1910 1,709,000,000

191 1 1,797,000,000

191 2 1,878,000,000

1913 1,924,000,000

1914 1,815,000,000

1915 2,312,000,000

Generally speaking there are three classes of
investment securities available in the United
States at this time. These may be named as
follows:

1st. Investments based on securities created
by reason of the European struggle and including
war loans to belligerent governments, and in-
dustrial investments commonly known as "War
Brides."

Cuban Investments

2nd. Investments in securities based on in-
ternal enterprises, the profits of wiiich are pred-
icated on an increase of business, either directly
or indirectly made possible by internal conditions,
or the natural prosperity of this country.

3rd. Investments with securities of a more
conservative nature than either of the- foregoing
and in no way based upon the direct results of
conditions existing in Europe, but more particu-
larly on the permanent development of the United
States and neighboring countries not at war.

Cuban Invest nents

WAR TBIE ITS\^ESTME]\TS

The investors of the United States, have,
within the past two years, loaned to European
Governments approximately $2,500,000,000.
These loans have been made on the basis of
higher rates of interest than governments have
ever paid for accommodation in this country.
We will assume, for the sake of argument, that
when the peace treaty will have been signed,
there will be no repudiation of these loans and
that the investors holding such securities will
continue to receive their interest without question
and their principal as it falls due. The great
trouble, however, under such conditions, as set
forth in the papers by one of the best informed
financiers of this country, is that "the conditions
apparent at times necessary for borrowing money
are not the conditions at the time necessary for
repaying the debt." In other words, there is
just the possibility that when the vast amount of
Foreign Government obligations come due, these
governments will find themselves in a position
where they will have to refund these loans in
order to protect interest, without hope of re-
paying the principal.

As a result of apparent conditions, the investors
of this country have arrived at that stage in
investment in Europ)ean collaterals, where they
find themselves unwilling to absorb much more
of such securities and must look to other fields
for the making profitable of their money holdings.

Cuban Investments

U. S. INDUSTRIAL INVESTMENTS

With the opening of the New York Stock
Exchange, after several months inactivity, by
reason of the upheaval in Europe, a new era
in industrial investment was begun for the
United States' investor. The activity of this
period will go down in the history of this country
as perhaps the most intensive of any in our
investment experience.

Primarily, the anticipatory profits made pos-
sible by large purchases of munitions and sup-
plies, was the cause of this activity.

Secondly, the vast increase in credit, made
possible by our holdings of gold, and,

Thirdly, the incident development, which auto-
matically became necessary in order to supply
the great manufacturing and transportation
demands put upon us.

Investments in this character of securities
must necessarily, to a certain degree, parallel the
history that will be written on governmental
loans described above and a study of the se-
curities market, will plainly demonstrate that the
activity in this class of investment is slowly but
gradually waning, because the holder of such
securities is beginning to realize that there must
come a day of reckoning when paper profits will
serve no definite purpose.

As an illustration of this point, let us take the
railroad securities of the United States and in a
terse way analyze the situation, which comparison
should form a basis for fair judgment on other
industrial securities at the present time.

Cuban Investments

The railroad security market is in a chaotic
condition. As an evidence of this, less new
railroad mileage has been constructed in the last
year than in any year since the Civil War.

The Federal Government has no power to
prevent railroads from "Stock Watering" and
unless some method is found to prevent railroads
from over-capitalizing, these securities are bound
to dwindle in value and be wrecked, as were the
Chicago & Alton and many other roads. A
member of the Interstate Commerce Commission
recently said, "To-day, we are called in only
after the horse is stolen. In order to be of any
real service, we should have something to say
about locking the barn door."

The Interstate Commerce Commission has
charge of about eight hundred railroads, with a
trackage of about 247,000 miles and a super-
vision over 1,695,000 employes.

Many of these railroads have one hundred or
more subsidiary companies and each of these
thousands of companies may issue securities
under their own titles.

The Commission, if given proper powers to
regulate the issuance of new securities, might
possibly be able to prevent future bankruptcies
such as the Rock Island and the New Haven,
and yet have practically no control over the
financial history of trunk lines twenty years
hence.

As an illustration of this, let us take the history
of the Boston & Maine Railroad. For several
years the laws of Massachusetts have been very
strict concerning the issuance of new securities.
The Boston & Maine has long been under these

Cuban Investments

laws. Its stock, which is now selling at about
I40.00 a share, was issued at par, or above, under
authority of the Massachusetts Railroad Com-
mission;-its bonds, now selling in the seventies,
have this Commission's stamp of approval. The
Commission required that the stock of its rail-
road companies be issued at par or above. Some
of this Boston & Maine Stock, now selling so
low, the Commission instructed should be sold
to the public at not less than $165.00 a share.
The present day holders of this stock receive
small protection on their investments.

Nor is the cause of this depreciation, the result
of looting the treasury of the Boston & Maine.
Greater dividends than were actually earned
and the tendency to pay these dividends rather
than to make necessary improvements on physical
property, was the real cause of the Boston &
Mame failure.

On the other hand, there are many railroads
today that are fully worthy of the high praise
given them. But a few years since, the same
praise was bestowed on the Rock Island, the
Chicago & Alton, The New Haven, the Cin-
cinnati, Hamilton & Dayton, and the Boston
& Maine. They were model roads, their se-
curities were then of the highest grade, the officials
were believed to be "careful, honest and long-
headed." History may repeat itself.

As a result of these conditions illustrated in
the railroad field, investors are naturally looking
for more permanent forms of securities than
those offered by "Industrials" which today may
be highly profitable and tomorrow, by reason of
changed conditions, be worthless.

Cuban Investments 10

SECURITIES THAT CANNOT DETERI-
ORATE IN VALUE

Every one with money to invest, be the in-
vestment made by the individual, private cor-
poration. Savings Bank, Trust Company, In-
surance Company, Fraternal Organization, or
others, should be interested first in the permanent
security that will safeguard the investment, and
second, in the profit to be derived from the
investment.

Securiries, having for their foundation over-
capitalization certainly cannot meet the re-
quirements of the sane and safe method of in-
vestment, regardless of what may be the promises
for returns.

Behind the best securities known to the in-
vestment world lies a certain principle of the
enhancement in value of the collateral as the
holder of the securities receives back his invest-
ment and his compensation for the accommoda-
tion.

Any security that is based on overcapitalization
must certainly be proportionately weak in those
guarantees of repayment of principal which
in themselves make the investment good or bad.

The first and most important of this class of
securities are those, the principal of which is
guaranteed by absolutely immovable and inde-
structible property, as for instance a productive
farm, or a piece of city real estate, located in a
thriving community where values cannot, under
any reasonable conditions, deteriorate. In this
class of securities the land will remain regardless
of what may be the depreciation in improvements

11 Cuban Investments

and in the formation of such class of securities
improvements should not be considered.

In the making of loans on farm property, it
is customary to never lend more than fifty per
cent of the actual land value, without regard to
the improvements already made on the property.
Under this system a first mortgage is taken
on the property behind the loan, and the mort-
gage includes both the land and improvements.
As partial payments are made on the principal
of the loan, the security is enhanced since the
mortgage continues to apply on full amount
of the security.

As a result of the stability of this class of
securities, the great investors of the United States
have turned their attention to the investment of
their funds in farm and city real estate mort-
gages.

As an illustration of this, over Three and One-
Half Billions of Dollars have been invested in
this class of securities in the United States, as
shown by report of the Comptroller of the Cur-
rency, in June, 1914 (the latest figures available.)

14,512 State Banks $ 539,400,000

634 Mutual Savings Banks 1,897,600,000

1,466 Stock Savings Banks 478,900,000

1,064 Private Banks 26,600,000

1,564 Loan and Trust Companies 565,500,000

19,240 Banks and Trust Companies ^3,508,000,000

Add to this the sum of $1,706,000,000 of
mortgage loans held by life insurance companies
in the United States, and we have the immense
total of $5,314,000,000 invested in mortgage
loans by these two classes of institutions alone.
Fraternal societies and thousands of private

Cuban Investn^ents 12

investors will greatly add to the total. In addi-
tion to these, there are 7,525 National Banks
now lending money on mortgage loans, which is
another way of saying that the United States
Government endorses this class of security.

So, it must be evident to the investor that the
mortgage loan is a dependable security and one
that has grown in popularity by reason of its
reliability.

Briefly stated, the advantage of real estate
mortgage loans may be summed up as follows:

They oflFer maximum security for money
invested.

They return the greatest interest at regular
periods.

They assure a steady value not subject to
fluctuation.

They save valuable time by exemption from
care and attention.

They increase bank credit, because they are
excellent collateral.

Each dollar invested in mortgage loans is
secured by two dollars' worth of high grade
available-at-any-time improved real estate.

They give a security that cannot be diminished
or destroyed.

They are not effected by violent changes in
the bond and stock market.

They are tax exempt and no legislation can
deprive them of their income or effect their
security.

13 Cuban Investments

CUBAN FIRST MORTGAGE REAL
ESTATE BONDS

A reading of the foregoing must impress the
reader with the fact that first mortgage real
estate bonds in the United States are good and
safe investments.

A reading of the three books which accompany
this, must impress the reader with the fact that
the Republic of Cuba is destined to occupy a
pre-eminent place in the agricultural history of
the world — now occupies such a position.

One cannot read the things that have been
written here, and which are substantiated by
facts, without gaining an appreciation of the
enormity of wealth that is now flowing into the
Island, and will continue to develop those
natural advantages made possible by nature,
in soil, climate, geographical location and other-
wise.

The Government of Cuba, under the admin-
istration of General Jose Miguel Gomez, realized
the necessity for the up-building of real estate
mortgage loan investments on the Island, and
with this view in mind, took steps to create an
institution that would be far more reaching in
its effect than has the United States Govern-
ment, as relating to this class of securities.

With this idea in mind, the Law of July 20,
1910, was promulgated.

Under this law was created an institution
known as the "Banco Territorial de Cuba"
(Cuba Mortgage Bank) which has for its main
object, the maldng of first mortgage real estate
loans under Government supervision and direc-
tion.

Cuban Investments 14

Under this law the Banco Territorial has the
exclusive privilege of placing Cuban real estate
loans into bonds for the purpose of giving
them tangible and salable form under Govern-
ment regulation and protection.

The following are main facts regarding this
law and the concession, and a verbatim copy of
the same will be supplied to any one interested
in investigating this class of Cuban securities:

Excerpts from Law of July 20, igio
Office of the Secretary of Agriculture^ Commerce
and Labor
I, General Jose Miguel Gomez, Constitutional
President of the Republic of Cuba —

MAKE KNOWN: That the Congress has
passed, and I have sanctioned, the following * * *

LAW

The creation of a financial institution denom-
inated "Banco Territorial de Cuba" is hereby
authorized.

The capital stock of this Bank, fully paid in,
shall be, at least, five million dollars official
money (U. S. Gold).

It shall have the statutory right to issue, for
a period of sixty years, obligations, warrants, or
mortgage bonds based on loans to owners of
real estate located in the Republic, secured by
mortgage and redeemable at short or long term.

No other partnership, association, corporation
or bank, shall be allowed to issue, as an intermedi-
ary financial institution, obligations, warrants or
mortgage bonds during the sixty years the
Banco Territorial de Cuba enjoys this exclusive

15 Cuban Investments

privilege, without prejudice, however, to such
issues being permissable directly by debtors to
their creditors, on their own account or through
trustees:

The "Banco Territorial de Cuba" shall have
its corporate domicile in the City of Havana;
it shall establish branches at least in each of the
capitals of the other Provinces, and shall, more-
over, have the right to establish committees or
representatives in foreign countries.

It shall be the special duty of an Official Comp-
troller, appointed by the President of the Repub-
lic, to observe that the provisions of this Law, of
the Decree of Authorization, and of the By-
Laws, approved by the Executive Power of the
Republic, shall be complied with.

The business of the "Banco Territorial de
Cuba" without prejudice to its right to invest
its capital, in whole or in part, in other financial
transactions, shall be:

To make loans on first mortgages on real estate,
duly inscribed in the Registry of Property, up
to an equivalent of not more than one-half of
the appraised selling value thereof, the loans to
be repayable throughout a long term by annual
or semi-annual installments, or to be repayable
in a short term with or without provision for
amortization. Mortgages by the provisions of
which prior inscribed liens on the property
mortgaged to the Bank, are paid off, shall also
be considered as first mortgages.

To acquire loans secured by existing mortgages,
provided they comply with the conditions of
this law.

To make loans to municipalities and official

Cuban Investments 16

corporations of the State, legally authorized to
contract loans, and to the extent to which they
are so authorized, even without mortgage, pro-
vided the loans be always secured as to prin-
cipal and interest by the necessary permanent
revenues of such bodies.

To acquire or discount government, provincial,
municipal and corporate evidences or indebted-
ness provided that they are secured as set forth
in the preceding paragraph. These transactions
and those set forth in the preceding paragraph
can only be made from the corporate capital,
or by means of a special series of obligations,
bonds or warrants.

To issue, by virtue of the transactions already
enumerated, and up to the amounts which may
have been loaned, obligations, warrants or mort-
gage or other bonds, redeemable on fixed dates
or through drawings, at par or at a premium.

To negotiate the said obligations, warrants or
mortgage bonds, and to loan or to open credit
accounts on them.

Loans shall be made only when they are fully
secured by mortgage on real estate of a value
at least double the amount of the loan.

Should there exist prior liens duly inscribed on
the property to be mortgaged, the loan shall only
be made subject to there being withheld there-
from an amount sufficient to pay the principal
and interest or charges of the said liens.

Loans can also be made in spite of existing
prior liens, duly inscribed, provided the holders
of the said prior liens waive their priority rights
in legal form and due notation of such waiver is
made in the Registry of Prop>erty.

17 Cuban Investments

The loans shall be made in cash and the rate
of interest on the same shall not exceed seven
(7%) per cent per annum.

These mortgage bonds may be issued in bearer
or registered form, transferable by simple endorse-
ment.

The total amount of such mortgage securi-
ties issued shall in no case exceed the aggregate
of the corresponding mortgage loans.

They shall bear the signatures and rubrics of
the Manager, the Cashier and the Official Comp-
troller appointed by the Government.

The obligations, warrants or mortgage bonds,
whether registered or to bearer, shall have the
legal force of public deeds upon which confirmed
sentence in foreclosure proceedings has been
rendered, for the purpose of claiming the pay-
ment of the principal and interest due from the
Bank, by judicial compulsion.

These securities shall be specially guaranteed
as to principal and interest by all personal or
real properties constituting the assets of the Bank,
as well as the real properties mortgaged under the
loans made.

The party presenting obligations, warrants or
mortgage bonds payable to bearer, or their
coupons shall be recognized as the owner thereof.

Cuban Investments 18

METHOD OF AMORTIZATION

The Banco Territorial loans its money on first
mortgages on improved city and country real
estate; the revenue from the properties on
which loans are made must exceed the interest
charges and the proportional part of the principal
which must be paid back yearly to the bank.
By this plan of amortization the borrower has a
series of years in which he can pay back the loan
by installments so that at the time his loan is due
he has paid the mortage and the accrued interest.

This method makes it easier for the land-
holder to keep up his payments and avoids the
great number of foreclosures which take place
in the United States.

It is usually very difficult for a borrower to
have the entire principal sum on a given date
when the mortage becomes due; by the amortiza-
tion plan he starts paying back his principal by
degrees, such payments being small.

If he applies to the Bank for a loan of say
$2,000.00 at 7% interest and 1% commission
for ten years, a certain percentage is arrived at
by tables prepared for that purpose, which gives
the amount he must pay yearly, say $326.97, in
nine payments, so that at the end of the tenth
year he will have paid back his loan with interest
and commission, instead of having paid $160.00
a year for interest and commission only, still
finding himself with a debt of $2,000.00, which
he must pay in a lump sum or pass through fore-
closure.

It is by this plan of amortization that all loans
made by the Banco Territorial are gradually
paid back, which gives the Bank further sums to

19 Cuban Investments

place advantageously on new mortgages, while
with every payment made to the Bank the se-
curity against its loans increases by double the
amount paid^ the yearly decreasing unpaid bal-
ance remaining secured by the entire original
mortage until same is completely paid off.

At no time can there be outstanding more
bonds than mortgages held by the Banco Terri-
torial. It must invest its surplus funds in
bonds of the Governments of Cuba, United
States, France, England or Germany.

Cuban Investments 20

DESCRIPTION OF THE BANK

The Banco Territorial has a charter for 99
years from the Cuban Government for carr}ung
on the business of loaning money on improved
real estate, both city and country, to the extent
of 50% of the assessed value of the same, and
secured by absolute first mortgages, no prior
liens being allowed.

The capital of the Bank is |5,ooo,coo.cx3 U. S.
Gold, fully paid.

Besides its headquarters in Havana, this bank
has thirty-five branches throughout the Republic.

21 Cuban Investments

THE BONDS AND THEIR SECURITY

The Cuban Mortgage Bank had placed on
mortgages up to June 30, 191 6:

On rural real estate f> 3,000,227.21

On urban real estate 3,069,072.89

On first mortgages purchased.... 67,532.45

Making a total of 6,136,832.55

All secured by absolute first mort-
gages on improved real estate,
the selling value of which is
more than 16,500,000.00

And against which there were out-
standing on the same date:
Series "A" 5% bonds
(40,000 bonds of
par value 500
Francs @ 96.16) $3,846,400.00

Less drawn for re-
demption 57,888.32 3,788,511.68

Series"B"6% bonds already sold 1,000,000.00

Making a total of 4,788,51 1.68

There are now offered the balance
of the present issue of Series " B "
6% first mortgage bonds 3,000,000.00

Making the total outstanding

bonds 7,788,511.68

Which will be secured as follows:
Value of improved real estate

mortgaged to Bank on June 30,

1916, over 16,500,000.00

Cuban Investments 22

Minimum value of improved real
estate, to be mortgaged under
new loans made with the pro-
ceeds of present issue of Series
"B" bonds (including mortgages
made from cash proceeds now on
hand from $i ,coo,ooo.co of bonds
already sold and proceeds of
$3,oco,cxx>.oo bonds now offered),
never less than, and as a rule
well over double the amount
loaned, about 8,cxx),ooo.oo

Total value of property mortgaged

and to be mortgaged 24,5co,ooo.cx>

Or more than three times the
amount of bonds outstanding,
without taking into account the
fact that the bonds are further
secured by the entire assets of
the Cuban Mortgage Bank, in-
cluding its fully paid capital of
l5,coo,ooo.oo.

The fixed interest charges on the
total amount of bonds will be:
5% on $3,788,511.68 Series "A" 189,425.58
6% on |4,ooo,ocx>.oo Series "B" 240,000.00

Making a total of 429,425.58

23 Cuban Investments

While the amount due to the
Bank representing the annual
interest and commission on the
first mortgages that secure and
will secure these bonds will be
over 938,000.00

Allowing for annual expenses... $75,000.00

(Those of the year 191 5 were
only $60,310.11.)

There still remains 863,000.00

Which is more than twice the
total of all fixed charges.

Cuban Investments 2-t

HOW TO PURCHASE BANCO
TERRITORIAL BONDS

The "Banco Territorial de Cuba" realizing
the vast funds available for investment in the
United States, and having what may reasonably
be considered a large quantity of gilt edge securi-
ties available, sought a medium through which
to place these bonds in the hands of investors
of large or small amounts in the United States.

Prior to the European War, France was the
main market for these securities and some four
millions of dollars were invested in them by
French capital. Owing to conditions brought
about by the war, naturally the demand for
securities ceased and a new outlet had to be found
that would continue to bring money into the
Island for development purposes through the
sale of these bonds.

In May, 1916, negotiations were begun between
the "Banco Territorial de Cuba "and the Bankers*
Loan & Securities Company of New Orleans,
Louisiana, with the result that the Bankers*
Loan & Securities Company was created nscal
agent for the United States for the sale of these
securities.

Several weeks of investigation of conditions
were made on the ground and every detail of the
situation gone into, with the result that the Bank-
ers' Loan & Securities Company now offers to
the American investor these Banco Territorial
bonds.

In presenting these bonds, the Bankers' Loan
& Securities Company realized that it would be
necessary, owing to the fact that the Republic of
Cuba is somewhat removed from our own Domain,

25 Cuban Investments

to present in conjunction with these bonds, a most
comprehensive statement of affairs in the Repub-
lic, hence the Company prepared the data pre-
sented in these four Dooks, so that the prospective
investor might at first hand have all the perti-
nent facts bearing on this subject.

The Bankers' Loan & Securities Company is
capitalized at $1,500,000 under the laws of
Louisiana.

It is a going concern lending money, preferably
on real estate and is officered and managed by
men of long experience in the real estate mortgage
business.

The Company publishes a semi-monthly bulle-
tin, which details facts regarding its presentations
to investors. This bulletin will be mailed with-
out charge to those requesting same.

This Company is the largest of its kind in the
South and one of the largest in the United States,
and it could ill afford to offer any securities for
sale to investors that did not comply with every
demand of soundness.

In offering "Territorial" bonds to American
investors we do so realizing fully that the investor
will want to look carefully into their reliability,
and we maintain a special department for the
answering of inquiries to this end.

Cuban Investments 26

MONEY LEGISLATION IN CUBA

From Article by W. H. Morales

The Monetary Law of Cuba, as it stands, is a
result of the European War, forming as it does
part of the plan of national defense enacted by
the Cuban Congress, and approved by President
Menocal on October 29, 1914.

Such a sweeping measure of legislation became
necessary to meet the falling off of exports by the
European nations, and after providing for various
forms of public economy, the law prescribes a
national coinage, based on the single gold
standard.

While a change from one money system to
another is usually the result of slow evolution
and wide preliminary discussion, there are cases
where the public emergency needs immediate
action. This occurred in Cuba in the Fall of
1 91 4, when the unprecedented rise in the price of
Spanish and French coins made it imperative for
the Cuban legislature to authorize a national
currency which would emancipate the country
from a European system, costly and inadequate
for local needs, and enable Cuba to buy gold and
silver in the open market and coin them in the
mints of the United States, which is provided
in the same law.

The demand for money in Cuba has grown apace
with the tremendous increase in her national
wealth and industries. Her foreign commerce
has doubled in the last ten years, and with a
prosp>ective sugar crop of 3,ooo,coo tons this
season, as compared with 2,597,732 in 1914,
representing an expected total of 1250,000,000
in comparison with only ^129,886,600 for the

37 Cuban Investments

previous year's record crop, it is evident that a
monetary law to increase and normalize the
circulating medium was necessary.

In adopting a national gold standard, at a
mint parity with the American dollar, which is
also made a legal tender under the same law,
the country is afforded an ample currency.
American metallic and paper money circulates
to the exclusion of other foreign moneys, simpli-
fying exchange operations and adding another
link to the established close relations with the
United States.

The first shipment, amounting to ^300,000
gold and I43 1,000 silver, was delivered April 7,
1 91 5, and was quickly absorbed.

Cuban Investments

30

FINANCIAL STATEMENT OF THE
REPUBUC OF CUBA

Treasury Department

Receipts and Expenditures from July i, 1915,
to June 30, 1 91 6.

Balance June 30, 1915 >3J»S.673S5

Receipts Expenditures

July 191 5 $ 4,152,173.39 % 5,111,284.47

Aug. 191 5 4,509^69.90 3iS8".634.45

Sept. 1915 4,283,884.69 4,903,994.73

Oct. 1915 6,511,991.64 4,861,401.81

Nov. 1915 4,178,176.33 5.876,73915

Dec 1 91 5 4,639,045.36 3,906,461.35

Jan. 1916 6,764,804.13 5.793.3J5-98

Feb. 1916 8,6o8,497a6 7,814,191.15

Mar. 1916 9,671,743.89 9.365055-44

Apr. 1916 8,205,545.27 8,521,795.41

May 1916 8^93.777-58 8,356,204.52

June 1916 6,217,263.94 5,175,662.30

TOTALS 176,912,992.89 >73,279/>4i.87

Balance. ^3.i57.93o-3i

Existing in Treasury and Banks, June 30, 1916 $6,473,603 . 86

31 Cuban Investments

FOREIGN NATIONAL DEBT OF CUBA

Loan of J35,oco,ooo.oo at 5%, dated March 11, 1904, due the ist
of March» 1944.

Issued Bonds (J 1,000.00 and $500.00, par) $35,000,000.00

Called to date 6,186,000.00

Outstanding $28,814,000.00

Internal 5% Debt of the 29th of August, 1905, undefined due date.

Issued 112,500 Bonds at |ioo.oo par $11,250,000.00

Placed in circulation, 111,640 Bonds at $100.00 par. 11,164,000.00

Called, 4,985 Bonds at $100.00 par 498,500.00

Outstanding 106,655 Bonds at $100.00 par 10,665,500.00

Loanof $16, 500,000.00 at 4^%, dated August 2, 1909, due August i,
1940.

Issued Bonds $16,500,000.00

None called as yet as amortization will begin in 1920.

Loan of $10,000,000.00 at 5%, dated the ist of February, 1914,

due the ist of February, 1949.
Total amount issued none called as yet as amortization does not

begin until until 1920.
Treasury Notes, issue of $5,000,000.00 at 6%, dated January i, 1915,

due June 30, 191 8.
Issued 20,000 Bonds of the Series "A" of $100.00 par.
Issued 4,000 Bonds of the Series "B" of 500.00 par.
Issued 1,000 Bonds of the Series "C" of 1,000.00 par.
Placed in circulation 19,847 of the Series "A."
Placed in circulation 3,001 of the Series "B."
Placed in circulation 500 of the Series "C."
Called, 1st drawing, 2,357 Bonds of the Series "A."
Called, 1st drawing, 387 Bonds of the Series "B."
Called, 1st drawing, 83 Bonds of the Series "C."

Called, 2nd drawing, 2,909 Bonds of the Series "A."
Called, 2nd drawing, 435 Bonds of the Series "B."
Called, 2nd drawing, 69 Bonds of the Series "C."

Remain outstanding in circulation 14,581 Bonds of the Series "A."
Remain outstanding in circulation 2,179 Bonds of the Series "B."
Remain outstanding in circulation 348 Bonds of the Series "C."

Havana, July 27, 191 6.

($68,875,100.00
— $27 . 55
Pop. 2,500,000

Cuban Investments

32

OFFICIAL QUOTATIONS OF THE HAVANA
STOCK EXCHANGE

August I, 1916

BONDS

Interest

Outstanding

Par

%

BONDS

Bid

.\sked

U.S. Gold $35.000.000..

$1,000

\5
J

Rep of Cuba (Extern.).

lOlH

103

500

U.&Goid

10.871.000. .

100

5

R^.ofCuba(lDt«n.)

95?i

mi

U. 8. Gold

6.183.000. .

lool

6

City of Havana 1st mt

105

107

U. S. Gold

2.655,000. .

100

6

City of Havana 2d mt

103

107H

U. S. Gold

349,000. .

l.OOOl

8

Cienfuegos R.R. Ist mt

106

103

U. S. Gold

243.000. .

1.000

7

Cienfuegoe R.R. 2d mt

103

105

U.S. Gold

215.000. .

1.000

7

CaibarienR.R.l8tmt.

103

105

U.S. Gold

130.000..

1.000

6

Gibara4cHolguinR.R.
1st mortgage

95

100

U.S. Gold

4.000.000. .

500

6

Havana Gas k Electric
Co. Ist mortgage. . .

112

125

U. 8. Gold

8.972.561..

1.000

5

Havana Electric Ry.
Ist mortgage

93 J^

97>i

Eii«lHb £

3.830.000. .

5

United Rya. of Havana
Ge&jntg. (perpetual)

80

90

Ftwes

25.000.000. .

500

5

U. 8. Gold

4.000.000. .

100

6

U. S. Gold

100.000. .

100

6

CubuiGasCo.lstmt.

U.S. Gold

100.000. .

500

8

MaUnxM Wtr. Wks..
2nd mortgage

100

110

U.S. Gold

150.000. .

1,000

8

Central "Olimpo" Co.,
1st mortgage

100

110

U.S. Gold

2oaooo.

1.000

8

Central "Covadonga"
1st mortgage

100

110

U.S. Gold

i.5oaooo. .

500

6

Santiago Elec. Light k
Tret. 1st mortgage..

90

100

U.S. Gold

fi.000.000. .

100

6

Hav. Gas & El. CGoi.
Con.) Istmtg

104

110

U. S. Gold

16.000,000. .

1.000

5O0

4H

RepubfieofCulw. ...

86H

87

100

U. S. Gold

500.000..

500

6

Industrial Slau^tct
HouneC-o. Istmtg.

75

80

33

Cuban Investments

BONDS— Continued

Interest

Outstanding

Par

%

BONDS

Bid

Asked

$ 20

1

U. S. Gold

5,012,569. .

100

200

1,000

5Cy

Cuban Tel. Co. Ist

80

81

Cy

700,000. .

1,000

6 Cy

Ciego Avila Sug. Co . .

90

100

Cy

2,000,000. .

500

7

International Brewery
Co. lat mortgage.. .

85

90

U. S. Gold

100,000. .

100

6

Agricultural Dev. Bk.
^aranteed 1st mtg.

99

110

STOCKS

Capital Outstanding

Par

Shares

Bid

Asked

U. S. Gold S 7,272,727*-.

<100

Banco Espanol de lalsla de Cuba

100

102

U. S. Gold

320,000. .

100

Agr. Bank of Pt. Principe

100

no

U. S. Gold

5,000,000. .

100

National Bank of Cuba

170

180

English £

4,760,000. .

10£

United Rys. of Havana Regla

W. House, Ltd

99J^

55

Cy

1,500,000. .

$100

Santiago El. Lt. A Trac. Co.. .

20

English £

600,000. .

10£

Western R. R. of Havana

Nominal

English £

900,000..

10£

Cuba Cent. Ry. Ltd. (prefds.). .

Nominal

English £

900,000..

10£

Cuban Cent. Ry. Ltd. (com.). . .

Nominal

U. S. Gold

400,000. .

$100

Gabira & Holguin R. R

60

80

U. S. Gold

340,000. .

100

Sancti Spiritus El. Lt. Co

Nominal

U. S. Gold

625,000. .

100

New Ice Factory Co

125

Sin

(Palatino & Tropical Brwy.) .

U. S. Gold

200,000. .

200

Havana Produce Exch., Pfd.. . .

103

Sin

U. S. Gold

200,000. .

200

Havana Produce Exch., Com.. .

105

Sin

U. S. Gold

15,000,000. .

100

Hav. El. Ry. Lt. & P. Co.,

Hd

107M

108>i

U. S. Gold

15,000,000. .

100

Hav. El. Ry. Lt. k P. Co.,

Com

lOlJi

mVs

U. S. Gold

150,000. .
150,000. .

100
100

Nominal
100

U. S. Gold

Cuban Tannery Co

115

U. S. Gold

2,000,000. .

100

Cuban Tel. Co. (Pfd.)

99H

101 J^

U. S. Gold

5,000,000. .

inn

Cuban Tel. Co. (Com.)

94M

95K

•Equal to $8,000,000 Spanish Gold.

Cuban

Investments

34

STOCKS — Continued

coital Outstanding

Par

a>ara

Bid

Asked

D. 8. Gold

soaooo..

1,000.000..
1,000,000. .
5,000,000. .
5,000,000. .

500,000..
10,000,000. .

120,000. .

500.000..

750,000. .

250,000..

laooaooo. .
6.ooaooo..

2,400.000. .

4,000,000. .
50,000,000. .
50,000.000. .

1.200.000. .

$100

100
100
100
100
100
100-
100
100
100
100

100
100

100

100

100

(Par.)

SlOO

The Marianao Water and De-
velopment Co. in Circulation
153,000

Nominal

Nominal

Nominal

80

100

10
100

50

18

Nominal
95

150
95

74H

mi

59K
110

U. S. Gold
U. S. Gold
U. S. Gold
U. S. Gold
U. S. Gold
U. S. Gold

Industrial Slaughter House

.Agr. Development Bank

Banco Territorial de Cuba

Cardenas City Water Wks. Co. .
Cuban Porto Co

120 ■

110
20

U. S. Gold
U. 8. Gold
U. S. Gold
U. S. Gold

Marianao Elec. Lt. Co

International Breweries (Pfd.)..

International Breweries (Com.).

Industrial Co. of Cuba (Glass

Fact<»y)

110

100
40

U. S. Gold
U.S. Gold

The Cuba RMlroad Co. Pfd.. . .

The Trust Co. of Cuba Cm d^

culation $500,000)

97
160

U.S. Gold
U. S. Gold
U.S. Gold
U. S. Gold
U. S. Gold

Cub» Nairigation Co. (Pfd.) . . .
Cuba Navigation Co. (Com.).. .
Cuba Cane Sugar Corp. (Pfd.) .
Cuba Cane Sugar Corp. (Com.).
Ciego de Avila Sugar Co

96
76
95

140

All Quotations are in U^. Gold.

35 Cuban Investments

UNITED STATES INVESTMENTS IN CUBA
RUN INTO MANY MILLIONS

The confidence of capital has been fully ex-
pressed by large investments in Cuba and these
investments are growing rapidly both in volume
and returns to investors. Many and varied are
the enterprises of Cuba created by American
capital. Many citizens of the United States
make their homes in Cuba and their private
investments would probably exceed in gross
capital the vast amounts that have been invested
by United States Corporations of which we cite
a few.

THE PORT OF HAVANA DOCKS COM-
PANY has already constructed and has in
operation two large concrete and steel docks,
either of which will berth the largest ocean going
vessels. It is understood that contracts have
been let for the early completion of two more
docks of large capacity. Many millions of
American capital have been invested in this
enterprise.

CUBAN CANE SUGAR CORPORATION

owns and operates i8 sugar estates in Cuba.
Capacity of mills, 3,500,000 bags. Capital,
$50,000,000.00. The earnings of this company
have been enormous.

CUBAN AMERICAN SUGAR COMPANY,

Capital $20,000,000.00. This company has had
a large influence in the upbuilding of the sugar
interests of Cuba and earned handsome profits
for its stockholders.

Cuban Investments 36

HAVANA ELECTRIC IL^ILWAY, Capital
Stock, $i5,ooo,ocx). The preferred stock divi-
dend December 31, 191 5, was $899,993. Com-
mon stock dividend (same date), $822,169.

AMERICAN TOBACCO INTERESTS have
vast sums of money invested in Cuba. The
largest tobacco company of the United States
conducts a complete factory in Havana for the
manufacture of high grade cigars.

AMERICAN PACKING INTERESTS. The
largest meat packing concerns of the United
States maintain establishments in Havana with
branches in other cities of the Cuban Republic.

AMERICAN STEEL CORPORATION is
heavily interested in the iron mines at Nipe Bay.
Several million dollars are invested in this enter-
prise.

We will be pleased to supply information on
any class of Cuban industries upon application.

Bankers' Loan & Securities Co.,

New Orleans, La.

37

Cuban Investments

INDEX

TO

FOUR FACT BOOKS

FACT BOOK NO.

Tabloid History of Cuba

System of Government

Personal Histories Executives.

Diplomatic Corps

Army of Cuba

Police Force

Cuban Navy

Department of Prisons

Immigration

Lands, Titles, Taxes

Interesting General Facts

Health Conditions

Hotels of Cuba

Parks and Drives

Banks of Havana

Trunk Line Railways

Steamship Companies

Telegraph and Cable Rates. . .
Automobile and Cab Tariff, . .

Points of Interest

Isle of Pines

Madruga

Santa Clara

Matanzas

Caibarien

Pinar del Rio

Cienfuegos

Guantanamo

Sagua la Grande

Camaguey

Santiago de Cuba

Sugar

Tobacco

Coffee

Cacao

Pineapples

Citrus Fruits

Mangoes

PAGE

6
8

24

25
25
26
26

27

28

30
31

32

33
33
7,1,
34
35
37
42
43
44
44
45
46

47

48
48
49

50

4
22

24
26
28
30

3»

Cuban Investments

38

FACT BOOK NO.

Hcnequen (Sisai) 2

Hardwoods 2

Stock Raising 2

Industrial Survey 3

Good Roads 3

Impwrts and Exports 3

Customs Receipts 3

Foreign Commerce 3

Food Stuffs 3

Cities of Cuba 3

Steamship Companies 3

Trunk Line Railways 3

Electric Railways 3

Electric Power 3

Telephones 3

Manufactured Products 3

Mineral Wealth 3

Mining Laws 3

Cuban Investments 4

U. S. Gold Reserve 4

War Time Investments 4

U. S. Industrial Investments 4

Securities That Cannot Deteriorate 4

Farm Mortgages 4

Cuban First Mortgage Bonds 4

Excerpts from Cuban Mortgage Law 4

Method of Amortization 4

Description Territorial Bank 4

Bonds and Their Security 4

How To Purchase Banco Territorial Bonds .... 4

Money Legislation 4

Main Provisions of Monetary Law 4

Financial Statement, Republic of Cuba 4

Cuban Foreign National Debt 4

Havana Stock Exchange 4

U. S. Investments in Cuba 4

PAGE

3a
35

37

4

5

7

9

12

14
15
16
21
23
»3
U

25

27

34
3

4
6

7
10
II
13
14
18
20
21

24
26
28
30
31
32
35

^03^10715^