837.51/613: Telegram
The Representative on Special Mission in Cuba (Crowder) to the Secretary of State
[Received 10:35 p.m.]
124. Morgan and Company’s representatives returning to-morrow via Key West with the understanding, which Zayas confirms, that the correspondence between them transmitted with my despatch dated October 10th61 constitutes an agreement to make an agreement for the advance loan of $5,000,000, subject to the conditions named in said correspondence, but without prejudice to the legal right of the Cuban Government to contract with any other bank for the $50,000,000 loan.
Bollard of Dillon, Reade and Company who arrived after the Morgan negotiations had commenced informed me this morning that Zayas told him in an interview yesterday that he considered himself under obligations, if conditions named are fulfilled, to contract with Morgan for the $5,000,000 loan. Bollard complains that this will give Morgan and Company a great practical advantage in securing the $50,000,000 loan. This will undoubtedly be the position of Speyer and Company who on October 10th filed with [Page 749] Zayas through Steinhart an offer to make the advance loan “upon terms and conditions more advantageous to the Republic of Cuba than those offered by any other responsible banker or banker’s aid to financial corporation.” Weinberger of Blair and Company has made no protest here but it is possible that all these banks may protest in Washington.
Public bidding is not required by either the advance loan statute which has passed the Camara and is pending in the Senate, nor by the exterior loan statute for $50,000,000 which is pending in the Camara but has not passed either House though both statutes permit public bidding. The raising of this question now will greatly obstruct pending loan negotiations which are proceeding rather favorably.
With my despatch of October 11th62 which should reach you tomorrow morning I forwarded a copy of my latest letter to President Zayas. My interview with him yesterday evening leads me to believe that he will give all or nearly all of the commitments in writing for the confidential use of our Government which are listed in said letter and some additional ones which I felt at liberty to suggest. I shall cable his commitments when received. It will then be incumbent upon the Department to advise me if a contract for the advance loan may be closed and the program for the permanent loan of 50,000,000 may be proceeded with.