The Ambassador in Cuba (Judah) to the Secretary of State

No. 306

Sir: Referring to my telegram No. 90, June 12, 11 AM,19 I have the honor to send herewith the original memoranda, and translations thereof, handed to me on June 12 by Acting Secretary of State Fernández, in response to my informal request of May 25, 1928, for data in connection with the new fifty million dollar financing, the bid for which by the Chase Bank was accepted by the Cuban Government.

I also call your attention to my despatch No. 305 of June 13, 1928,19 covering the proposals for the budget for the fiscal year 1928–29. You will see that, in the President’s Message, he requests the authority of Congress to take from otherwise unpledged treasury funds, or from the Special Public Works Fund, such amounts up to a limit of seven million dollars as may be necessary to make up the amounts of any budgetary items for which general revenues are not available.

I have [etc.]

Noble Brandon Judah
[Page 651]

The Cuban Acting Secretary of State (Fernandez) to the American Ambassador (Judah)

Report for the State Department20 in order that it shall in turn report to the American Ambassador with data, as requested by him, in relation with the proposed financing of the public works by the Government of Cuba.

1. –Amount of the proposed financing:

From forty to fifty million dollars.

2. –The purpose and reason for the proposed financing.

To intensify the public works in accordance with what is provided in Article 10 of the Law of July 15, 1925.

3. –The sources of revenue which shall be pledged for the service of the proposed financing.

Only 90% of the estimated revenues of the Public Works Plan during the years 1931 to 1935 in accordance with the plan of November 10, 1926.

4. –The amounts which said sources of revenue have produced in recent years:

In the year 1925–1926 they produced $13,627,905.96; in 1926–1927 they produced $16,366,551.70 and in 10 months of the year 1927–1928, $15,102,271.04.

The estimates for those years in accordance with the aforementioned plan of November 10 were for 1925–1926 $10,000,000; 1926–1927 $16,000,000 and 1927–1928 $16,000,000.

5. –The amounts that it is prudently estimated that said sources of revenue will produce in the future:

From 1928–1929 to 1934 to 1935, both inclusive, at the rate of $18,000,000 per annum in accordance with the estimate of receipts of the aforementioned plan of November 10, 1926. A greater revenue has been estimated commencing in 1928–1929 because it is estimated that by that time all the proceedings for the collection of all the taxes of this special fund will be in proper working order.

6. –The amounts of ordinary revenues of the Cuban government during recent years, aside from the sources of revenue to be pledged for the service of the proposed financing:

In the year 1925–1926 $87,398,173.93; 1926–1927 $80,344,818.95 and in 10 months of 1927–1928 $69,635,596.36. These sums do not include the sources of revenue which are to be pledged for the proposed financing.

7. –The amounts of the ordinary disbursements of the Cuban government [Page 652] during recent years, aside from the disbursements made out of receipts which are to be pledged for the service of the proposed financing:

In 1925–1926, $87,347,161.32 plus $51,000 extraordinary redemption of the bonds of the Interior Debt of 1905, made out of the surplus of the budget of that year.

In 1926–1927, $81,698,105.89 there being a deficit of $1,354,774.78 caused by excesses in the budget assignments, specially in “Veterans’ Pensions” which amounted to $682,242.19. In 1927–1928, 10 months $65,903,218.53.

8. All the other data which show whether or not, the use of the special sources of revenue which are to be pledged for the service of the new financing will leave sufficient ordinary revenue of the government for the meeting of its regular disbursements:

The financing operation that is projected does not in any manner affect the regular revenue of the Cuban government sufficient to meet its ordinary disbursements inasmuch as said operation is secured solely and exclusively by 90% of the receipts corresponding to the years 1931 to 1934 (4 years of the Special Public Works Fund, Law of July 15, 1925 and in accordance with the Plan of November 10, 1926).

Is it possible that in connection with the proposed new financing the Cuban government may have prepared connecting data which said government does not deem it proper to place at the disposal of the Government of the United States?

Gazettes are attached which include the receipts of the budgets of the years 1925–1926 and 1926–1927 which correspond to questions 6 and 7 as well as of the movement of receipts and disbursements of the Special Public Works Fund corresponding to the years 1925–1926 and 1926–1927; there is also attached the data21 which served as the basis for the requesting of the proposed financing.

  1. Not printed.
  2. Not printed.
  3. The Cuban Department of State.
  4. Not printed.