837.00/2961
The Ambassador in Cuba (Guggenheim) to the Secretary of State
[Received January 24.]
Sir: I have the honor to report that on January 16 I had a long conversation with the President of Cuba at his finca, during which, at his request, we discussed very frankly the political and economic situation. After expounding his theories that the troubles of Cuba were not economic and political, but economic and communistic, he asked me what my views were in regard to the situation. I told him that it was my information that under the outward calm in Cuba there was a very strong spirit of unrest and dissatisfaction in all of [Page 45] the cities, but that on the farms people were not paying very much attention to politics. I told him that I could not agree with his analysis of the causes; that, while the basic trouble in Cuba was of course economic and while there was a certain amount of communistic activity, there was also a very serious political unrest throughout the country. The Liberal Party, by which I meant the Machadistas (including the Conservative elements in the coöperative movement), had been in power for five years; all the politicians without power and without jobs were in a desperate financial situation, and the Liberal Party was giving them no hope of returning to power for many years to come. This political opposition had thus taken advantage of the serious economic conditions to antagonize the country against the the Government, and the student demonstrations and communistic activities were some of the results of this agitation. The disturbances were stimulated by the fact that nearly all of the Cuban newspapers were opposed to the Government, partly because nearly everyone was opposed to the Government except those being paid by it, and partly because the press was not receiving the financial support from this Government which it had received from other Governments in the past.
I called attention to the fact that the situation had not greatly improved since our last conversation. At that time the constitutional guarantees had been suspended; the University had been closed; and the newspapers had been suppressed. After an intermission of normal conditions lasting for a week or so, all of these measures had been reimposed. I believed that it was impossible to carry on under these conditions. I pointed out that I had always advised him to find a means of making peace with the opposition, so that the people might enjoy a period of six or eight months of political calm in which to achieve their economic readjustment; but unless he could make some appeal for popular support, he might govern with the wisdom of Solomon and still fail to win any response from the people. It was apparent that he had not pursued a policy of reconciliation of late, either because he deemed it unwise or because he believed it impossible of achievement; I had avoided, however, any offer of advice or suggestions because I did not want to be an embarrassment to him or exert a weakening effect upon his actions. It now seemed evident that his policy had not been effective, and the constant tension had unfortunately resulted in a diminution in the tourist business, with a consequent further reduction in Cuban revenues.
Under these conditions it could only be a question of time before a situation might be engendered such as had developed in Peru.9
[Page 46]I called attention to the recent tax bill that had been railroaded through the Senate in a few hours, the contents of which the public had not even had an opportunity to read. I told him this had a very bad effect on the vested interests in the country, which had been among the few remaining friends of the Government.
Referring then to the negotiations that Ambassador Ferrara had been carrying on with the opposition, I informed him that the opposition had the impression that these negotiations had been definitely terminated; at the same time, I felt that the opposition had reached a point where it would respond to reasonable terms. The President stated that Cortina was now acting as negotiator and would continue to do so. It should be mentioned, in this connection, that yesterday I had a long conference with Cortina, who planned to see the President today and later to report to me the results of his conversation.
The President referred to the $20,000,000 obligation due the Chase Bank on March 31st, and stated that he would like to have my assistance in getting an extension of credit for a period of six months. I answered that this was a very inopportune time to discuss Cuban finances with the bankers, and he answered that he was not asking for any new money, but only a postponement of this commitment. I told him that I realized this, but that it would be better not to broach the matter until the situation developed a little more favorably.
The President concluded the conference by asking me if I would lunch with him again on Wednesday or Thursday of this week, and I replied that I would take great pleasure in doing so.
Respectfully yours,