837.51/1536
The Ambassador in Cuba (Guggenheim) to the Secretary of State
[Received December 23.]
Sir: Referring to my telegram No. 122 of November 29, 5 p.m., I have the honor to transmit herewith a copy and translation of a law2 promulgated in the Official Gazette of December 17, 1932, giving legislative sanction to a contract signed December 10, 1932, with the Chase National Bank of the City of New York covering a further advance to the Cuban Government of $1,650,000 in order to facilitate payment by the latter of the service of its Public Works Indebtedness on December 31, 1932. It is presumed that the Bank’s New York office has furnished the Department a copy of this contract.
Article III of the Law provides for a tax of one cent per pound on all sugar consumed in Cuba, the proceeds of which, together with those of certain existing taxes, are pledged for the repayment of the sum advanced. The creation of this new tax has attracted much unfavorable criticism and elicited a formal but ineffective protest from the National Association of Sugar Planters (Colonos), it being asserted that it is illogical and contrary to the interests of the industry to saddle it with such a heavy tax at a time when Cuba is advocating more favorable tariff treatment of its sugar by the United States.
It is understood that the arrangement with certain oil companies for the advance by them to the Government of additional funds on account of future tax payments has been concluded in substantially the same form as that described in my telegram under reference. This transaction was apparently not considered as requiring legislative sanction. General authorization to effect such arrangements has, however, been given the Treasury Department by an executive decree.3
Respectfully yours,