837.51/2446: Telegram
The Acting Secretary of State to the Ambassador in Cuba (Wright)
96. Personal for the Ambassador. I have received through the courtesy of the Cuban Embassy the following telegraphic message from Martínez Fraga:
“The Cuban Government, having been informed in detail of the matters agreed to in principle in our conversations at Washington, has decided to ratify its approval which was cabled on July 31. The Senate will take up and, we hope, will approve the Obligations Bill on next Tuesday the 8th and we are preparing to obtain the immediate approval of the House. The observations concerning bills pending on other matters are being studied. The Government considers it of the utmost urgency to obtain, following the adjournment of the American Congress, an announcement of the willingness of your Government to arrange with Cuba to advance 20 millions for a Stabilization Fund because the continuance of the Cuban monetary crisis, notwithstanding the drastic measures which have been adopted may force the adoption of other measures not yet contemplated if it does not possess an adequate instrument in order to dominate the crisis. In addition the said announcement will consolidate the position of this Government in order to carry out with all speed the plan agreed upon and will make very much easier our dealings with Congress.
I therefore reiterate my request to Ambassador Butler Wright that he should report to you concerning this matter. Furthermore I personally believe that the arrangement of the advance would give great strength to the Government in relation to the confidential steps relative to the Memorandum of which you are aware. As Ambassador Butler Wright doubtless will have informed you, we have powerful reasons to feel optimistic and we think that we are on the eve of solving all these difficulties.
I appeal once more to your valuable cooperation and friendship in order to obtain the success of all the negotiations. I have explained here the reasons behind the Sayre letter37 and we hope shortly to receive an answer to our note of July 15th [20th]38 concerning the Treaty. Warm regards.
(Signed) Martínez Fraga.”
Please seek immediate opportunity to inform Martínez Fraga that while, as I told him when he was here, this Government has every disposition and desire to be helpful in the present emergency, it cannot take any step such as the desired announcement relative to the eventual financial collaboration of this Government until Cuba has taken the necessary steps to settle satisfactorily and equitably the legitimate claims of American citizens against Cuba. Until the agreements which the Cuban Government has entered into with these creditors are implemented through the enactment of the necessary legislation, this Government would not have the necessary support of public opinion which it anticipates once Cuba has acted and which it must have if collaboration with Cuba is to be fully effective. In this respect, the situation has not changed from that described in the note of July 20 to the Cuban Government and the covering instructions, except that as a result of my subsequent conversations with Martínez Fraga, and of the assurances which Martínez Fraga gave me, I agreed to postpone our announcement suspending the negotiation of the supplemental trade agreement. Once these assurances have been translated into concrete action, this Government will be ready and prepared to undertake the fullest consideration of whatever projects Cuba may wish to advance for a stabilization fund or construction projects financed in whole or in part by the Export-Import Bank. With regard to the stabilization fund, preliminary studies made here indicate the necessity for a careful definition of the size and operation of such a fund. The amount of 20 million would seem to be much greater than required. Three to five million dollars would seem sufficient on the basis of present information. It might be well to remind Martínez Fraga that the Congress here in discussing the proposal for an increase in the lending power of the Export-Import Bank, which unfortunately was not adopted, made it unmistakably clear that it did not consider as the principal function of the Bank the use of its funds for exchange stabilization purposes.’ In view of the security which can be offered in this case, however, the Cuban Government may wish to endeavor to secure the financial accommodation it requires from private banks. As previously indicated, as and when the two Governments reach the stage of financial collaboration, this Government will be pleased, if the Cuban Government so desires, to place at the disposal of the Cuban Government the experience of American monetary experts.
The memorandum referred to in Martínez Fraga’s cable contains informal comment and suggestions regarding the moratorium legislation. A copy of this memorandum was sent Mr. Beaulac39 by Mr. Collado40 on August 1.
[Page 542]You will of course state the foregoing in the most friendly terms and express my deep appreciation for the efforts which Martínez Fraga is now making to pave the way for the eventual financial collaboration of this Government.