File No. 837.51/319
The Secretary of State to the Secretary of the Treasury ( McAdoo)
Sir: Referring to your letter dated March 9, 1918, wherein you state that the Treasury Department is prepared to advance certain funds to the Government of Cuba as soon as the Department of State advises the Department of the Treasury that the Republic of Cuba has the power to incur the indebtedness, I have the honor of informing you that after a most careful consideration of the entire question, it would appear, that although the prospect of a growing increase in current expenditures due to prevailing conditions brought about by the war, as shown by the figures on the reports submitted, [Page 334] do not place the proposed loan in a favorable light; however, the increase in revenues provided by the additional taxes laid under the law of July 31, 1917, should be ample to care for the loan, were proper restrictions provided to keep the expenditures within the estimates submitted.
In this connection it gives me pleasure to enclose for your consideration, a copy of the note dated August 13 [14], 1918, received by the Secretary of State from the Cuban Minister in Washington.
In view of this note and after careful consideration of all the circumstances, I am of the opinion that your Department would, in the present situation, be warranted in making further advances to the Cuban Government on the proposed loan of $15,000,000 (inclusive of the $5,000,000 already advanced to Cuba), unless it should appear in the meanwhile that the expenditures of Cuba are not being kept within the actual or estimated revenues of the Island. Consequently before making advances after the one now to be made, I should be pleased to be notified in order that I may have opportunity to ascertain whether the financial situation in Cuba would make a further advance inadvisable.
I have [etc.]