1939: Cuba

Political Situation.

A crisis in Cuba's political history developed as a result of the elections of a Constituent Assembly on Nov. 15. The result, giving 41 seats to the opposition coalition and 35 to the Batista factions, was a potential victory for the opponents of the Laredo Bru administration, which ends May 20, 1940, and represented the world defeat in the political carrier of Colonel Fulgencio Batista, the strong man of the administration. The opposition represents a strange alignment of forces, including the Cuban Revolutionary Party of the former radical president, Dr. Ramon Grau y San Martín, which polled eighteen votes, and the Democratic Republicans, led by the ultra-conservative ex-president Mario G. Menocal, who accounted for fifteen seats. The Republican Actionists of ex-president Miguel Mario Gómez and the revolutionary ABC party divided equally the remaining eight votes. This odd political mélange was united only by a desire to terminate the control of politics which the army has exercised since the Batista coup of 1933. The administration coalition includes the Liberals, Nationalists, National Democrats and Communists. Alleged irregularity in balloting has raised a legal problem for the Superior Electoral Tribunal to decide, which may alter the election results. The Assembly, which is to draw up a constitution before the general elections scheduled for Feb. 28, 1940, cannot convene until this is settled. The opposition has requested the postponement of the elections until the new constitution is drafted; the Batista coalition has refused to discuss this issue. Meanwhile, the exact status of the Assembly is uncertain, the administration maintaining that its only function is to prepare a constitution; the opposition insisting that it should exercise full sovereign power, with authority to install a provisional government until the general elections are held.

The defeat of the Batista forces in the November elections has not discouraged the presidential aspirations of the Cuban dictator. On Nov. 28 the Congress passed the military retirement bill, providing for a reduction in the army, now the largest in the history of the Republic, and permitting Colonel Batista to retire from its command, thus making his candidacy possible. His retirement Dec. 6 was followed by his nomination, first by the Communist Party and, subsequently, by the other parties in the administration coalition, now to be known as the Socialist Democrats. It is not yet known who the opposition candidates will be.

Financial Problems.

The Constituent Assembly election results reflect a dissatisfaction with the policies of the present administration, growing out of the depressed economic condition of the country which is indicated in the depreciation of the peso. Normally pegged to the United States dollar, Cuban silver declined to as low as 84 cents in July, just prior to the passage of the Casabuena bill. This measure was designed to arrest further depreciation through the grant of price-fixing emergency powers to the President, the payment of dollars' accounts in pesos, placing Cuban currency on a par with the United States dollar for all transactions in the island, and the establishment of official control of exchange. An emergency tax bill was passed in December, authorizing an increase in the sales and gross receipts tax from 1½ to 2 per cent and a 20 per cent rise in the profits tax on banks and corporations. The issue of another $1,500,000 in silver certificates was also provided. It is hoped by this measure to provide sufficient revenue to cover expenditures in 1940. On Dec. 30 the President signed a decree fixing national expenditures for the coming year at $75,999,855, the same figure as provided in the 1939 budget. A deficit of $5,000,000 is reported this year. The economic crisis was aggravated, according to business and financial interests in Cuba, by discussion and passage over the president's veto of the Mortgage Moratorium Liquidation bill. The Batista measure for revalorization of mortgages, which would have drastically scaled down existing mortgages, benefitting some 180,000 small debtors, had the strong support of the revolutionary factions, the Communist Party and labor.

Sugar Industry.

The sugar industry, always the key to Cuban economy, was rendered uncertain by President Roosevelt's temporary suspension of the sugar quotas, following the outbreak of war in Europe. The removal of the quota automatically restored the $1.50 tariff rate on Cuban sugar, since the preferential rate of 90¢ a hundred pounds provided in the reciprocal trade agreement of 1934 applied only so long as the quota was in effect. Cuba was thus faced with a sharp cut in the returns from its chief industry. Cuban producers not only found themselves at a disadvantage in the North American market but faced with the loss of that market. A supplementary trade agreement with the United States was signed on Dec. 18, to take effect five days later, reverting to the status of 1934. The quotas were restored Dec. 26, President Roosevelt declaring the danger of hoarding and speculation was past. Three days later the 1940 quotas were established, allotting Cuba 1,923,680 short tons out of a total of 6,725,000 tons. According to the formula specified in the 1937 Sugar Control Act, providing for a percentage division of the market, Cuba's quota is 28.6 per cent, compared with 23.19 for Continental beet sugar and 6.29 per cent for mainland cane sugar producers. The Cuban National Sugar Institute has recommended that the 1940 crop be limited to 2,753,903 long tons, an increase of 57,386 tons over the 1939 crop.

Labor Conference.

In spite of the European War the second American regional labor conference of the International Labor Office met in Havana in November, with delegates and advisers from sixteen countries present. The leading topics under discussion were conditions of work for women and children, social insurance and immigration. Such a conference cannot make binding agreements but a Declaration of Havana, described as social complement to the declarations of political and juridical solidarity adopted at Lima and Panama, was unanimously proclaimed. Cuba is one of the most advanced of the Latin American countries in labor legislation, having so far ratified twenty-six of the sixty-three conventions adopted by the I.L.O., and passed legislation to make the majority of them effective. In the past six years the island has enacted an 8-hour law, a minimum wage, obligatory vacation and workmen's compensation laws. On the other hand, legal strikes may be called only on official permission and the labor syndicates and unions operate under Government supervision.