File No. 837.156/240

The Secretary of State to Minister Gonzales

No. 273

Sir: The Department has received your No. 368 of August 25, 1916, enclosing a translation of a note from the Cuban Secretary of State replying to your note of August 7 last regarding the case of the Cuban Ports Company.

The Department observes that it is stated in the note addressed to you by the Cuban Secretary of State, under date of August 22 last, that the President of Cuba did not, as stated in the note addressed [Page 452] by you to the Cuban Foreign Office in accordance with the Department’s instruction of July 31, 1916, terminate or cancel the contract concluded between the Cuban Ports Company and the Cuban Government. It may be observed with reference to this point, that inasmuch as it appears from Mr. Desvernine’s note, just mentioned, and from the decree of President Menocal, dated August 4, 1913, that he directed the suspension of the payment of funds which, under the terms of the contract, were due the company, and further directed that the Secretary of Public Works should proceed to take charge of all the works performed by the company, and since it further appears that the action directed by the President of Cuba was taken, and that the company’s operations have entirely ceased, it seems to the Department that there was no substantial inaccuracy on its part in its reference to the contract in question as having been canceled.

The Department notes the observations of the Cuban Secretary of State respecting the proposal of the holders of the securities of the company that the Cuban Government should take steps to have appraisers appointed, in order that the company’s outstanding securities may be purchased at a just and equitable valuation, to be determined by appraisers named in accordance with certain terms of the contract. This Government, without entering into any discussion of the legal rights of the parties to the contract in question under the terms thereof relating to the purchase of the company’s securities, suggested that the Cuban Government, inasmuch as it had terminated the company’s concession, would appear to be in a position to effect a satisfactory solution of existing difficulties between itself and the company, by instituting proceedings for the purchase of these securities, as suggested by the holders thereof. It would appear from Mr. Desvernine’s note that the Cuban Government concludes that it is not in a position to take such action, because, in the first place, the decree of President Gómez, issued on May 12, 1913, by which provisions were incorporated into the contract for the purpose of enabling the Cuban Government to take over, under certain circumstances, the company’s outstanding stock, was subsequently canceled by a decree made by President Menocal, which decree, it appears, has never been judicially confirmed; and, in the second place, even though this last mentioned decree had not been issued by President Menocal, no situation has arisen such as that contemplated by the contract which would require the Cuban Government to take over this company’s securities.

The Department regrets that the Cuban Government considers that it is stopped by these reasons from taking some steps along the lines suggested by the holders of the company’s securities, looking to an adjustment of the rights of all parties affected by the decree of August 4, 1913, in accordance with the avowed purposes of the President of Cuba.

The Department is not clear as to the observations made in Mr. Desvernine’s note respecting the propriety of diplomatic representations in this case and respecting the pertinency to this matter of the so-called Platt Amendment. It would appear, from other portions of Mr. Desvernine’s note, that this Government has made clear its position to the Government of Cuba in presenting to it certain considerations in relation to the questions involved in this case.

[Page 453]

You will address to the Cuban Secretary of State a note in the sense of the foregoing with reference to the communication transmitted by him to you under date of August 22, 1916.

I am [etc.]

Robert Lansing