The Consul at Habana (Tewell) to the Secretary of State
[Received May 26.]
Sir: I have the honor to inform the Department that on May 24, 1934, with the approval of the Ambassador, I had a conference with Mr. Martinez Saenz, Cuban Secretary of the Treasury, concerning measures to suppress the smuggling of liquor from Cuba into the United States under the provisions of the Convention of 1926.2
It was pointed out to Mr. Saenz that the port of Mariel has been an important base for such operations since June, 1933. Since that date some 57 shipments of liquor are known to have been made from that port to an alleged destination in Central America, at which destination those shipments never have been landed, despite the declarations filed with the Cuban Government at the time the liquor was withdrawn from the distillery and exported. The fact is that for Cuban liquors the United States is the only market that such vessels are capable of reaching, and, therefore, only in the case of clandestine shipments to the United States is it necessary to falsify documents presented to the Cuban authorities. Mr. Saenz was informed that since January 1, 1934, known shipments of liquor from Mariel have amounted to about 153,000 gallons, upon which the United States duty and internal revenue taxes would amount to almost one million dollars. Further, that were such shipments legal with regard to the laws of Cuba and the United States, they would not be exported at Mariel, inasmuch as the liquor (principally alcohol and rum) is produced in Habana distilleries. In fact, the use of Mariel is evidence of the illicit character of the traffic and, accordingly, by closing that port to export liquor shipments, more effective control of the trade would be possible.
The Secretary intimated that that suggestion would receive consideration. He stated also that the Cuban Government is taking other steps to control the liquor traffic through Mariel, the Customs Administrator [Page 391] at that port having been replaced recently by an officer who has received special instructions with regard to liquor shipments. One shipment has been made from Mariel during the incumbency of the new officer, which, the Secretary stated, is now being investigated.
The recent resumption of liquor shipments at Habana then was brought to the attention of Mr. Saenz, four vessels suspected by the United States Government of being engaged in smuggling liquor into American territory having taken cargoes from this port in the past six weeks, which cleared for such destinations as Belize, Honduras and St. Pierre-Miquelon. That such declarations were false, and therefore in violation of Cuban customs regulations, was indicated in the fact that one of the vessels, the H. S. Albert II, had recently arrived at Belize without its cargo. The Secretary also was informed that another vessel on the suspect list, the Reo II, is now in port preparing to take a large cargo of liquor from Habana. Thereupon he telephoned to the Collector of Customs and requested an immediate conference with other officials of the Treasury Department to decide what action should be taken with respect to that vessel.
While bonds for the production of landing certificates have been required of three vessels clearing with liquor from Habana recently, under existing circumstances, the efficacy of this procedure as a measure to suppress smuggling appeared to be open to question, inasmuch as the bond posted by the H. S. Albert II had not operated to insure delivery of its liquor cargo at the destination declared at Habana, nor had the bond requirement deterred two other suspected vessels from clearing subsequently from this port. It was pointed out to Mr. Saenz that after the signing of the Convention to Prevent Smuggling between the United States and Cuba and until June, 1932, numerous vessels of various nationalities, suspected of smuggling liquor from Cuba into the United States, had been refused clearances by the Cuban authorities, and that for some time, apparently as long as that policy was maintained, the operation of such vessels from Cuban ports practically ceased. It was suggested that similar action at this time would accomplish corresponding results.
Mr. Saenz, however, stated that the Machado3 Government may have performed official acts not in accordance with Cuban law and that the present Government did not propose to prevent the clearance of ships that might be suspected of smuggling liquor from Cuba into the United States until it had thoroughly investigated such cases and determined whether that action legally might be taken. He expressed it as his opinion that the American authorities themselves could stop the illicit liquor traffic, his observation while on a recent sojourn in [Page 392] the United States indicating that there is great laxity in enforcing laws that are openly violated by liquor smuggling organizations. The Secretary was informed, however, that the coastline of the United States convenient to many Cuban ports is so extensive and of such a nature that the most effective place to combat smuggling operations from Cuba is at the Cuban bases used by vessels engaged in that traffic, and it was suggested that the essential provisions of the existing Convention, insofar as they are applicable to smuggling into the United States, clearly recognize that fact.
Mr. Saenz stated that Cuba also has a smuggling problem, vessels that may be suspected of carrying illicit liquor cargoes from Cuba to the United States also being suspected of smuggling American cigarettes into Cuba. He stated that the Cuban Government is seriously considering solving its smuggling problem by reducing the customs duties on American cigarettes and suggested that the United States may best combat liquor smuggling by reducing its import tariff and taxes on liquor.
The Secretary’s attention, however, was called to the fact that the present Convention was negotiated when the importation of intoxicating liquor into the United States was prohibited and that its provisions therefore then had no regard to tariff policy as regards imports of liquor. It was also pointed out that since the importation of liquor has been made legal the United States has adopted a liberal policy with respect to imports of liquor from Cuba and that interests in Cuba now actively engaged in smuggling liquor into the United States also enjoy and avail themselves of that preferential market for the legal sale of their products. He was also informed that it is known that such Cuban interests have recently informed contacts in the United States that arrangements have been made to continue smuggling operations on a large scale from Cuban ports, and it was suggested that the refusal of clearances to vessels suspected of engaging in that traffic at the same time probably would reduce the smuggling of American cigarettes into Cuba.
Mr. Saenz declared that the Cuban Government desires to encourage and protect only legitimate trade with the United States and that it is his desire to cooperate with the United States and receive from the United States its cooperation in promoting trade of that kind.
This report is being forwarded to the Department by airmail inasmuch as it has been learned that official sources in Cuba have provided newspaper correspondents in Habana with a résumé of my conference with Mr. Saenz.
Very respectfully yours,