837.154/121

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

No. 418

Sir: Supplementing my despatch No. 416 of October 31, 1930, relative to the financing by the Warren Bros. Company and the [Page 696]Compañía Cubana de Contratistas of the work that is being done by them on the Central Highway, I have the honor to report that I have received a letter, dated November 4, 1930, from President Machado acknowledging receipt of my letter of October 29, 1930, and stating his conformity therewith.

Copies of President Machado’s letter and of a translation of the same are transmitted herewith to the Department.

Respectfully yours,

Harry F. Guggenheim
[Enclosure—Translation33]

The President of Cuba (Machado) to the American Ambassador (Guggenheim)

My Dear Mr. Ambassador: Pursuant to your letter of October 29, last, relative to the issue of Treasury Certificates (Obligaciones del Tesoro) to pay for the work on the Central Highway until its completion in February, next, I am pleased to state to Your Excellency that the said issue constitutes solely an advance against the proceeds of the sale of the $40,000,000 of Public Works Gold Bonds (Bonos Oro de Obras Publicas), which are encumbered only by the loan of $20,000,000 made by the Chase National Bank, and that the whole of the debt charged upon the Public Works revenues shall not exceed $100,000,000, for the following reasons:

(1)
Even though in one of the bases of this new negotiation 70 per cent of the net proceeds of the sale of the $40,000,000 is stipulated as guarantee, that being required by the Contractors, yet the Government has the right to apply the whole of the said proceeds to the taking up of the new certificates.
(2)
The new issue has been authorized up to $20,000,000 and it is my desire to endeavor not to carry it to its limit, in order that the balance not used may offset any loss that may occur in the sale of the prior issue.
(3)
The anticipated amortization of the 5½ per cent Public Works Series Certificates, for which $1,000,000 has already been deposited with the Chase National Bank, is being effected and will be continued in accordance with the terms of the contract.

I renew [etc.]

Gerardo Machado
  1. File translation revised.