File No. 837.51/323
The Secretary of the Treasury (
McAdoo) to
the Secretary of State
Washington,
August 26, 1918.
Dear Mr. Secretary: I received your letter
of August 19 concerning loans to Cuba. I am glad to have your views
therein contained, which I understand to mean that the loan of
$5,000,000 heretofore made and the loan of $5,000,000 now
contemplated will be within the limitations of the Piatt amendment.
I shall not fail to consult you before making any further advances
to Cuba so that you may give
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due consideration in connection therewith to the then relation of
the expenditures of the Republic of Cuba to its revenues.
In addition to the advice which you have given me, I feel I ought to
ask you whether, in the opinion of the Department of State, the
necessary formalities have been complied with so that the obligation
of the Cuban Government, when executed by the Cuban Minister in
Washington in conformity with the documents furnished to you, will
be regarded by the Department of State as valid and binding
internationally and will have its sanction. In that connection I
enclose herewith a copy of a letter, dated June 19, which Mr.
Leffingwell wrote you by my direction, indicating my view that such
advice as this is necessary for the protection of the United States
and the reasons for that view.1
I am [etc.]
The Secretary of
State to the Secretary of the Treasury
(
McAdoo)
Washington,
September 9,
1918.
Dear Mr. Secretary: I have received
your letter of August 26 with respect to the Cuban loan, in
which you state that in addition to the advice which has already
been given you, you feel that you should ask whether, in the
opinion of the Department of State, “the necessary formalities
have been complied with, so that the obligation of the Cuban
Government, when executed by the Cuban Minister in Washington in
conformity with the document furnished to you, will be regarded
by the Department of State as valid and binding internationally,
and will have its sanction.”
By way of reply, I beg to advise you that under the act of the
Cuban Congress of July 31, 1917, in pursuance of which the
proposed loan is being contracted by the Cuban Government, the
question as to the legality of the second advance of $5,000,000
to the Cuban Government at this time is so coupled with and
contingent upon the existing state of the Cuban Treasury, that
it is extremely difficult to advise you precisely that as a
matter of law all necessary formalities have been complied with.
However, it was intended by the letter of August 19, 1918, to
inform you that, in the opinion of this Department, the Treasury
Department is warranted in making further advances to the Cuban
Government on the proposed loan to the extent of $5,000,000 in
addition to the $5,000,000 already advanced, and that, in the
judgment of this Department, obligations of the Cuban Government
up to that amount, when executed by the Cuban Minister in
Washington, will be regarded by the Department of State as valid
and binding internationally and will have the sanction of this
Department.
I also take this occasion to renew the request that before making
further advances to the Cuban Government on the proposed loan of
$15,000,000, I may be notified sufficiently in advance to enable
me to ascertain whether or not the financial situation in Cuba
would make a further advance legal and advisable.
Very sincerely yours,
