Ousting The Dollar

Cuba imports and uses U. S. money, has no paper money of her own. In Washington last week the State Department was officially "surprised" when the Cuban Senate approved in principle a bill suddenly presented by one of Dictator-President Gerardo Machado's henchmen, providing :

Creation of a Bank of the Republic.

Issuance by this bank under a 20-year concession of 100% Cuban money (pesos).

Complete reorganization of Cuban finances to make pesos alone legal tender, even in cases where contracts specify dollars.

In Wall Street, although no banker would permit himself to be directly quoted, two thoughts were strongly held:

1) Cuba cannot, under the Platt Amendment, regulating Cuban-U. S. relations, set up a bank of issue without U. S. consent.

2) Evidently Cuban statesmen have come to the conclusion that inflation is the cure for depression and, since they cannot inflate the dollar, will strive to create a currency which they can inflate.

The Congress passed and President Machado signed last week a bill strengthening his regime by creating Havana a federal district like Washington, D. C., vesting in him the right to appoint all district officials.

The Cuban House passed, the Senate was on the point of passing last week, a bill empowering Cuban courts to divorce foreigners on any one of 15 convenient counts "without distinction as to whether the said causes have been produced within or without the Republic of Cuba."

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