The Ambassador in Cuba (Guggenheim) to the Secretary of State
[Received 9:59 p.m.]
18. Your No. 9, March 14, noon. There has been a widespread campaign of responsible criticism and propaganda against further payments on principal of foreign debt by the Cuban Government following the conclusion of the financial plan consummated by that Government and Chase Bank and oil companies last December. Such criticism I anticipated as indicated in my telegram No. 122, November 29, 5 p.m.; Department’s telegram 119, December 3, noon; and my 128, December 5, 5 p.m. [sic], 1932.
Although this propaganda may not have the approval of the Government at least it is not being censored. This is particularly significant since the Government is imposing the strictest censorship that I have witnessed in the last 4 years on the publication of any news believed to be in any way inimical to its interest. No indirect information in regard to the Government’s proposed debt policy is of any value as to [sic] the policy will be determined personally by the President and in my opinion will be based on what he believes will be the effect of this policy on the general policy of the United States toward Cuba.
On receipt of your inquiry I informally and incidentally inquired of Ferrara what the Government was going to do in regard to debt payments, to which he replied that of course the last word was not his but that he would advise giving the United States Government a complete statement of the financial problem of Cuba arising from its foreign debt with the request that the United States Government should use its good offices with the American bankers to develop a plan of relief. President Machado may follow this course but there is always the remote possibility that he may take advantage of the present period of our banking situation and the unknown policy of the new administration toward Cuba to declare a moratorium and to put into effect unsound financial projects either in contravention or circumvention of article II of the Permanent Treaty. In my opinion any effort by our Government to induce the bankers to relieve the financial strain on the Machado administration without a resolution of Cuba’s political problem will be generally condemned as United States support of the unpopular Machado administration.