Memorandum by Mr. A. N. Young of the Office of the Economic Adviser, Department of State

Cuban Loan

This afternoon at about 2:30 p.m. Mr. Dwight W. Morrow of J. P. Morgan & Company telephoned to the Secretary in regard to the proposed flotation of the Cuban Loan. Mr. Morrow informed the Secretary that they hoped to put out the loan on Monday and inquired whether the Secretary had any objection to inserting in the prospectus a paragraph read to the Secretary, the text to be substantially as the statement on the attached sheet. (As the Secretary understood it over the telephone.) The final sentence of the attached is to be separate and in smaller type. Mr. Morrow advised that he had consulted General Crowder regarding this matter, and that the latter perceived no objection.

The Secretary asked me to compare the attached text with the text of the treaty, which I did, and informed him that the wording of the treaty had apparently been closely followed. The Secretary stated that he considered that there is no objection to the wording proposed by the bankers and also stated that he had informed Mr. Morrow that he (Morrow) could understand that the draft of this paragraph would be unobjectionable in the absence of further word from the Department.

A[rthur] N[ichols] Y[oung]

By Act of Congress dated March 2, 1901, certain provisions were formulated which have been incorporated by an amendment in the Cuban Constitution; also been embodied in a treaty, May 22, 1903, between the United States and Cuba. Under these provisions, commonly [Page 838] referred to as the Piatt Amendment, the Republic of Cuba agrees not to contract any public debt, including reasonable provision not provided for by the . . . . . . . revenues. In addition to this financial safeguard the Republic also agrees not to enter into any foreign treaty or compact which may impair independence, and furthermore grants the United States the right to intervene to preserve Cuba, maintain government, protection of life and property. Issued with the acquiescence of the United States Government under the provisions of the treaty dated May 22, 1903.