Echoes & Money

Echoes of the suicide last fortnight of Cuba's Secretary of Justice Roberto Mendez Penate (TIME, April 16) died last week among the funeral dirges for old Alfredo Zayas, Cuba's fourth President, who died naturally (see p. 72). President Mendieta accepted the resignation of Penate's brother Rodolfo as Secretary of Labor and persuaded Secretary-Without-Portfolio Carlos Saladrigas, who had also sent in his resignation, to take the dead Penate's job. Then he called his cabinet into two all-day sessions from which he emerged, pale but triumphant, with three of the smartest moves his government has made thus far.

First, most spectacular move was to declare a moratorium for at least two years on amortization payments on $52,000,000 owed U. S. bondholders. This $4,037,000 annual load had been borne faithfully by Tyrant Machado and his successors. It was naturally the most unpopular thing in Cuba and the moratorium instantly fortified Mendieta's government in the hearts of the people. But Mendieta will continue to pay the interest charges of $2,868,000 a year and he will continue to collect all the taxes ordinarily earmarked for amortization payments. The decree affects two loans floated by the Manhattan bond house of Speyer, three by the House of Morgan. It has nothing to do with the $80,000,000 public works loan sponsored by Chase National Bank, now in complete default and under investigation to determine Tyrant Machado's right to contract it.

Mendieta softened the blow to U. S. investors by promising to resume all payments just as soon as Cuba's income increases by half to reach $60,000,000 a year.

Second move was to amend the Constitution in a way Suicide Penate had long fought for: 1) by removing civil cases from the jurisdiction of military courts even when constitutional guarantees are suspended; 2) by authorizing the confiscation of the property of men found guilty of misappropriating public funds, especially during the term of Tyrant Machado.

Third move was to spend some money: 1) by raising the minimum for Government employes' salaries to $30 a week; 2) by appropriating $1,230,000 to repair the Government buildings, roads and bridges of Revolution-torn Cuba.

All this was not enough, however, to distract Penate's friends. They kept up their barrage of criticism against Carlos Manuel De La Cruz, the man who had got the key job Penate wanted, the presidency of the Council of State. Penate had .killed himself day after Mendieta appointed De La Cruz. The friends charged the Mendieta Government with veering toward a Fascist dictatorship, charged that De La Cruz had been far too friendly with Tyrant Machado. Finally the echoes of Penate's death forced De La Cruz to hand in his resignation and the political factions again began their wild scrabbling for the job.

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