837.51/594a: Telegram
The Secretary of State to the Chargé in Cuba (Cable)
155. For General Crowder:
Norman Davis and Dwight W. Morrow, on behalf of J. P. Morgan and Company, have presented to Department memorandum, a summary of which is as follows:
“Cuban Government has been seeking short time loan for $5,000,000 to meet certain requirements, including outstanding checks. J. P. Morgan and Company are unwilling to consider matter unless such a loan could be made preliminary step in constructive reform in the administration of Cuba’s finances. J. P. Morgan and Company would, however, be very glad to consider the matter if making [Page 734] of such temporary loan, to be later paid off out of the proceeds of a large bond issue, would be helpful in carrying out any of the constructive plans for the relief of Cuba, and, if desired, would be willing to send a partner to Cuba for consultation with you and in cooperation with you to discuss the matter with the Cuban Government. They have felt it possible that this application for a loan from Cuba might afford them the opportunity of cooperating with you in impressing upon the Cuban Government, if the foreign credit of the Government is to be maintained, the necessity of prompt and substantial improvement in the Cuban budget. They add that if you think it advisable for Cuba to have this temporary assistance in order to maintain her credit, pending the adoption of the constructive measures necessary to put Cuba on a stable basis, J. P. Morgan and Company express their willingness to assist, provided they are assured that Cuba will adopt such measures.”
The Department feels that if the $5,000,000 loan is to be made the occasion on the part of the bankers of requiring as a condition precedent a reduction in the budget and revision of the tax laws, such as would be required for underwriting a large bond issue, and is not merely for the purpose of affording temporary relief for the immediate pressing needs of the Cuban Government, the negotiations of the bankers might well be of assistance to you. However, the Department is submitting the suggestions of J. P. Morgan and Company to you in order to obtain your views in the premises and will be guided by your recommendations.