837.51/1026
Memorandum by the Under Secretary of State (Fletcher)
The Cuban Minister called at my request today, and, reviewing the loan negotiations, I strongly emphasized that effective budget reductions were an absolute prerequisite of our sanction of both the small and the large loan now being considered by the Cuban Government. I told him that the Department hoped that General Crowder’s representations, which were made after exhaustive study and fullest consideration, and which had the entire approval and endorsement of the Department, would be heeded by President Zayas. I told him that the Department, mindful of the obligations resting upon this Government, was seriously concerned lest these loan negotiations should fail by reason of the Cuban Government’s failure to put its house in order, that the only way to reduce was to reduce, and that this Government would have to insist on actual and effective reductions before it could give its sanction to these loans; that if the loans failed and Cuba was unable to meet the coupons falling due within the next two months, a very serious situation would arise.
The Minister said that he had already written along these lines to his Government and would be very glad to telegraph what I had said to him and urge strongly an agreement with General Crowder on budget reductions.
The Minister also asked with regard to withdrawal of the marines from Camaguey, and I told him that the matter was progressing and that I hoped, unless something unforeseen developed, to be able to give him a favorable reply shortly.