File No. 837.51/295
The Secretary of State to the Secretary of the Treasury ( McAdoo)
My Dear Mr. Secretary: I have received your letter of March 7, wherein you inquire, first, whether the Republic of Cuba has the power to incur the indebtedness of fifteen millions of dollars, which is the amount of the loan proposed to be made to that country; and, [Page 323] second, whether the Cuban Minister has the authority to sign obligations for the amounts advanced on the proposed loan.
In reply, I beg to say that when the granting of a loan to Cuba by this Government was in contemplation during last summer, the Department took under advisement the political questions which it seemed pertinent to consider in connection with this matter, and in the Department’s letter of September 15, to you,1 indicated its views that there appeared to be no objection to the proposed loan. In this letter reference was made to a note addressed to the Cuban Minister of the same date,2 a copy of which I enclose for your information.
Your special attention is directed to the proviso expressed in this note, namely, that “the current expenditures of the Government of Cuba are not increased beyond the amount stipulated in the budget for the year 1917–18.” This Department is not informed as to whether, since the date of this note, the current expenses of Cuba have been increased beyond the budget of 1917–18. It is presumed that your Department may have definite information on this point.
Further consideration of the power of the Cuban Government to increase the proposed indebtedness, and the authority of the Cuban officials to act in the matter, would appear to involve a construction of the Cuban law of July 31, 1917, which presumably is still in effect. This is a matter which your Department has doubtless examined into thoroughly, but to which this Department has given little consideration.
The Department’s letter to you of March 23 commented upon the official construction of this act in the full powers of the President of Cuba transmitted to you in that letter. It is believed that that letter will also be found to cover the second inquiry in your letter under acknowledgment. …