837.516/55a: Telegram

The Acting Secretary of State to the Minister in Cuba ( Long )

4. Farnham, Vice President, City Bank, and Bruce, Manager of the Royal Bank of Canada, informed the Department today of the very serious anxiety which the two institutions represented by them have been caused on account of the recent concerted press attacks made against their branches in Cuba, … The result of this campaign has been that runs have started on many of their provincial branches and the managers of the banks have felt compelled to close down at once on any further advances and to refuse all credits for the time being. Consequently, several important sugar mills, which [Page 774] had counted upon credits from these two institutions to finance the movement of the new crop, have been unable to procure the necessary funds and some ten thousand laborers have been thrown out of work. The situation is causing deep anxiety and it is the intention of Farnham who leaves today for Havana to remain in Cuba for a considerable period.

The policy of the Cuban Government in permitting this campaign against these foreign banks, which was undoubtedly initiated by those interested in the local banks known to be insolvent, has resulted in cutting off the assistance which the two above named institutions were providing in the adjustment of the financial crisis. In the opinion of the Department, the Government of Cuba should take immediate and forceful steps to put an end to this propaganda and do all in its power to restore confidence. You should communicate the above informally to the Cuban Government at the earliest opportunity and advise General Crowder as well of these facts in order that he may, in his discretion, discuss this question with President Menocal.