837.51/664: Telegram
The Representative on Special Mission in Cuba (Crowder) to the Secretary of State
[Received 5:25 p.m.]
149. Conferred at length with President Zayas yesterday. Secretaries of State and War both present. My statement that the readjusted budget for current fiscal year violated the act of the Cuban Congress as to the superior limit, disregarded the expressed wishes our Government for a budget well within that limit, and that it would probably lead to a deficit for the year of nearly 10,000,000 and might probably reach 20,000,000, was not challenged. Montoro argues that even so, the condition of Cuba in this respect was not materially different from that of many other countries in which there would be [no?] serious attempt in this abnormal year to balance receipts with expenditures. I replied that there was this distinguishing difference that Cuba entered upon the present fiscal year with a deficit which I believe to be unprecedented in percentage relation to national debt, and embarrassingly large from any point of view; that her basic industry upon which revenue receipts primarily depend was seriously threatened and no one could foresee its future; and that my Government was still in ignorance why certain budgetary economies discussed in my memorandum on budgetary reduction of Oct. 27 (enclosure to despatch Oct. 2883) particularly as to military establishment, postal communication and diplomatic service [Page 769] were not entirely feasible. This led to a more or less detailed discussion of said memorandum and I pointed out again where economies aggregating between 4 and 5 million could be made by the President alone. This part of the discussion was finally brought to a conclusion by the statement of President Zayas that he was still giving the question of further reductions by himself and future reductions by Congress the most serious consideration.
The most significant utterance of the conference was when President Zayas expressed the view that Cuba’s public credit was not seriously impaired and that if free to apply in the markets of the world for a loan he could easily obtain the needed financial assistance. He added that Speyer and Company had offered to advance the $5,000,000 loan as a pure Treasury transaction not requiring sanction of our Government. I expressed my doubts as to whether this was the real attitude of Speyer and Company and President Zayas promised to verify his statement at a later interview.
President Zayas showed a cable from Céspedes announcing a first conference with Secretary Hoover respecting sugar tariff and I acquainted him with the contents my numbers 14784 and 148.84 He was optimistic that the best [results?] would ultimately be obtained by the procedure now inaugurated.
Pending amnesty bill which has already passed the House and was recently accepted in principle by the Senate, was seriously discussed. I submitted analysis of its scope and effect which President Zayas read aloud at the conference. He did not commit himself but I feel some assurance that he will not sign any amnesty bill as broad in scope as the one which the Senate is likely to pass at its next session. Copy of my analysis which is my third protest against this bill goes forward in today’s mail.85