Foreign Relations of the United States Diplomatic Papers, 1938, The American Republics, Volume V

837.51 Chase National Bank/739a: Telegram

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

Washington, February 7, 1938—2 p.m.

14. After careful consideration of the interests of the several American creditors in the so-called Public Works Bill⁵ the Department has concluded to make no representations to the President of Cuba⁶ in his consideration of whether or not to approve the bill as passed by both houses of the Congress.

It would seem entirely proper for you to request an audience with the President for the representatives of Purdy and Henderson and Warren Brothers, but in view of the purpose of these representatives it is believed that the President might derive a mistaken impression of the attitude of this Government were a representative of the Embassy to be present at the interview.

You are requested to leave the following memorandum with the Cuban Ambassador:⁷

“In view of the provisions of the bill which has been passed by both houses of the Congress for the settlement of the so-called Public Works obligations,⁸ the Government of the United States considers it desirable to manifest at this time to the Cuban Government its expectation that the Cuban Government will undertake a prompt settlement of the obligations of certain American creditors not included in the pending settlement, and that the obligations to be given them will be of a character no less favorable in their security and maturity than those to be given other creditors if the pending bill becomes law. Moreover, the Government of the United States takes this opportunity to express its confidence that any further investigation of the claims of one category of such creditors will be concluded at a very early date.”

In presenting this memorandum you should make it clear that this is in no way to be construed as indicating any endorsement on the part of this Government of the inclusion within the bill of other creditors than those whose security rests upon pledged public works revenues.

Hull

5. Approved February 14, 1938; for text, see Cuba, Gaceta Oficial, February 19, 1938; English translation in Foreign Bondholders Protective Council, Inc. Annual Report, 1938 (New York, 1939), pp. 387–417.
6. Federico Laredo Bru.
7. Pedro Martínez Fraga.
8. These obligations resulted from the execution of a program of public improvements authorized by a law of July 15, 1925. After the general default by the Cuban Government in 1933, the public works debts included the following items: serial certificates held by the Chase National Bank, $867,000; bonds held mostly by the general American public, $40,000,000; bank credit of Chase Bank syndicate $20,000,000; gold notes held by Warren Brothers Co., $9,800,000; gold notes held by others, $10,200,000; port notes held by Warren Brothers Co., $1,050,000; claim of Purdy & Henderson for building the capitol building in Havana, $1,500,000. Warren Brothers Co. of Boston had constructed 481 miles of the Central Highway running from Pinar del Rio to Santiago de Cuba between 1927 and 1931. (837.51 Chase National Bank/731, 758)