[Enclosure—Translation56]
Executive Decree No. 1583, October 10, 1920,
Establishing a Bank Moratorium
Whereas, important institutions of credit of the capital
represented by their directors and managers have appealed to the
President, [Page 45] setting forth
the extraordinary and critical situation in which they find
themselves with current account deposits amounting to more than
four hundred million dollars and with assets represented by
cash, bonds, stocks, securities, sugars, real estate and credits
amounting to more than a thousand million dollars, even
estimating sugar at its present value, the which demonstrates
the solvency of these institutions and their financial capacity
to satisfy their depositors;
Whereas, in these last days there has arisen a state of
disquietude and alarm brought about by exaggerated ideas of the
situation of the banks, manifestly based in great part, on the
volume of business created in times of the country’s prosperity
and the tightness of foreign markets in the movement of money
and the decline in the price of sugar;
Whereas, it is a well known fact that depositors and current
account creditors have demanded their deposits, moved by
exaggerated rumors, in the belief that their interests are in
danger, thus creating a situation that can not be resisted by
any institution of credit and that is sufficient reason in any
country to cause banking operations temporarily to be
suspended.
Whereas, notwithstanding the decline in the price of sugar it is
a fact that nine-tenths of the crop disposed of at high prices,
and the activity in exportation of all the products of the
country, portend an era of considerable prosperity, the present
difficulties being transitory and only fleeting without
consequence to the vitality of the country, by reason whereof
the affairs of the banks have been taken into consideration;
Whereas, a measure so exceptional relating to the progress of the
public welfare is only justified when social interests of a
superior order (as are the organization and functions of public
and private credit in the Republic) are considered to be in
danger, for a panic of this nature would entail a great business
crisis, the very thing that will come to pass if the Government
fail to take rapid and energetic measures to safeguard all
interests;
Whereas, the prosperous state of our agriculture, of our
industries and of our commerce, is a matter of common knowledge
and is shown by the fact that Cuba appears first in the list of
countries exporting to the United States, with the enormous
figure of six hundred and forty five million pesos, and occupies
third place in imports from the same great Republic, by reason
whereof the measure which this Government proposes and accepts
will not place in danger any legitimate interest;
Upon advice of the Council of Secretaries in extraordinary
session,
[Page 46]
I Decree:
- 1.
- Bills of exchange, drafts, notes, domestic drafts,
I.O.U.s, and other credit documents, whether due or to
become due before the first of next December, will not be
collectible until that date.
- 2.
- Credits secured by mortgages, pledges, or simple notarial
document claims, due or to become due within the period
mentioned in the preceding paragraph, will not be
collectible and will be extended until the first of next
December.
- 3.
- The auction proceedings provided for in judicial and
administrative procedure are suspended and dates therefor
may be fixed after the first of December next, and until
after the said period neither auctions nor forced sales of
any kind shall be held.
- 4.
- Within the said period, and beginning from the date of
this decree, current account depositors of banks or banking
institutions of the Republic may only demand payment of ten
per cent of their deposits, and in respect of savings
accounts of less than two thousand dollars, twelve per cent
thereof, unless the commission constituted in paragraph six
of the decretal part of this decree allows a greater per
cent than that above mentioned, according to the state of
the account.
- 5.
- This moratorium shall not affect obligations of the
National Bank of Cuba as a fiscal agent and depositary of
the funds of the State, under contract, nor the current
account of lottery revenues.
- 6.
- A commission composed of the Secretaries of the Interior,
Finance, and Agriculture, Commerce and Labor will have
charge of the inspection and examination of the banks for
the purposes of execution of this decree, taking to this end
all opportune steps, providing for the examination of their
“carteras” the checking of the cash and the liquidation of
assets.
- 7.
- Current account creditors may draw against their accounts
the sums necessary for the payment of customs duties, taxes,
fiscal dues, and other taxes of the State, of the province
or of the municipality in favor of the respective customs
officers, zone fiscal officers or other authorities
concerned.
- These checks will be collected by public officers within
twenty-four hours after issuance thereof.
- 8.
- The Government reserves the right to revoke this privilege
if the public interests should make it advisable to do
so.
Signed in the President’s Palace
this 10th day
of October, 1920.
M. G. Menocal
,
President
E. Sanchez Agramonte,
Secretary of Agriculture, Commerce and
Labor