File No. 837.156/232

The Acting Secretary of State to the Attorney for the Cuban Ports Company

Sir: The Department is in receipt of your letter of June 7, 1916, in which you review the situation respecting the difficulties that have arisen between the Cuban Government and the so-called Cuban Ports Company growing out of the cancellation of the company’s concession by the President of Cuba, and in which you request that this Government further employ its good offices with a view to bringing about an adjustment of these difficulties.

You call attention to an amendment to the company’s contract, the substance of which was suggested by this Government, which provided that the Cuban Government should have the right at any time to take over the operation of the company by purchasing all its outstanding stock at a just and equitable valuation to be fixed by [Page 446] three appraisers and you state that it is the right and the duty of the Government of the United States to insist that the terms of that amendment be now complied with by the Cuban Government.

While observing that the Department cannot admit your expressed views to the effect that any such rights and duties devolve upon it because it suggested the incorporation into the contract of the amendment just referred to, which as you are aware was proposed by this Government with a view to obviating an objection that certain stipulations in the company’s contract might conflict with the treaty concluded between this Government and Cuba, May 22, 1903, the Department may inform you that it has recently sent to the American Minister at Habana a comprehensive instruction looking to a satisfactory settlement of the case along the line indicated in your letter. In this instruction the Minister was directed to say, among other things, that this Government, without desiring at this time to enter into any discussion as to the legal rights of the parties to the contract under the terms of the amendment in question, desires to point out to the Cuban Government that inasmuch as it has, acting through its President, terminated the contract, it would appear to be in a position at once to take steps to effect a satisfactory solution of the regrettable difficulties existing between it and the company, by promptly instituting the proceedings suggested by you in behalf of the holders of the company’s securities.

I am [etc.]

Frank L. Polk