[Enclosure]
Memorandum of Conversation, by the Ambassador in
Cuba (Wright)
At 9 o’clock this morning I received a telephone message from the
Cuban Department of State asking if I might call upon the Secretary
before the regular hour on diplomatic reception day: I replied that
I would go to see the Secretary at 10 o’clock, which I did.
The Secretary asked me whether I was not perturbed by the situation
which was about to be created: I inquired whether he meant the
European situation. He replied that that was bad enough, but he
thought that our proposal to announce tomorrow the suspension of
negotiations for the supplementary trade agreement was fraught with
very serious consequences not only for Cuba but for relations
between our countries: I said that, with all consideration for his
views, I did not share his opinion, for our action was intended to
put an end to indefinite and repeated delays and postponements and
that I felt constrained to observe that his Government had had ample
opportunity for the consideration of this matter since the delivery
of my first Note on July 20th last. I said that I had delivered a
message of the same import to Ambassador Martínez Fraga
yesterday,56 conveying, at Mr. Welles’ request, a message from Mr. Welles
to the Ambassador in answer to a telephone message which the
Ambassador had sent through the Cuban Embassy in Washington, in
which Mr. Welles had stated that he regretfully had reached the
conclusion that further postponement was impossible. The Secretary
said he was aware of this message.
The Secretary then said that he requested in the name of the
President of the Republic that this decision be postponed until
Saturday the 9th of September, and he added that if it were
necessary he (the Secretary) would appear before Congress and
explain to the members the situation. I replied that in view of the
fact that this request came through him from the Chief of State my
only alternative was to transmit it immediately to my Government,
which I undertook to do.
At 11 o’clock (Habana time) I informed Mr. Welles thereof and I
stated, in order to aid him in any position he might make, that I
believed that at last this Government was thoroughly frightened and
had become aware of the effect upon Cuba’s economical and financial
position which would inevitably arise from continued disinclination
to meet this recognized obligation and the resultant necessity that
we should announce the suspension of the aforementioned
negotiations: therefore we were in a much stronger position than
before and, furthermore, the efficacy of subsequent representations
on our part would depend largely upon the consistency with which we
maintained our position in this matter. I said that on the other
hand, however, [Page 553] we should
have to face the probability that, in case of a European war which
seemed so imminent, Cuba would obtain a higher and practically
limitless market for her sugar which might change certain aspects of
the situation entirely. I said further that a friendly Cuba—perhaps
achieved by reasonable elasticity in this matter, might be of
greater value to us than an antipathetic Cuba—possibly brought about
by insistence upon the letter of the agreement. Mr. Welles stated
that he would think it over and call me later.
Meanwhile the Embassy was informed that as a direct result of our
insistence that the provisions of the treaty be observed with regard
to the exportation of pineapple slips, the long-standing matter of
the exportation of 2,000,000 of these slips to Puerto Rico was
satisfactorily settled. From what we have been able to learn from
all sources, a satisfactory solution of this treaty obligation would
not have been achieved otherwise.
. . . . . . . . . . . . . .
At 2 o’clock (1 o’clock Washington time), Mr. Welles called me and
stated that in view of the source of this latest request and of his
high regard for the President, he could not do otherwise than accede
thereto, with the understanding, however, that the postponement of
the date of the announcement of our intention to suspend
negotiations would be extended until September 9th, and that my
Government would find it impossible to agree to a further
postponement. As the Secretary of State had asked several times in
the interim whether I had received a reply, I deemed it advisable to
inform him in the sense of the above and to request, through him, an
interview with the President, in order to avoid any possible
inference on his part that I had been instructed or desired to deal
with the President behind the Secretary’s back. An appointment was
made for 5:15 o’clock.
At that hour I saw the President who was very cordial and seemingly
unconcerned. I delivered the message orally as above described: he
requested me to inform Mr. Welles not only of his high regard, but
also of his appreciation of the attitude which he had assumed. He
said nothing about the latent dangers of the situation, but he
stated unequivocally that his Government would do everything in its
power to secure the passage of this legislation by both Houses on
the 7th.
I improved the opportunity to remind him that, although such action
would be a great step forward, there were certain other points
contained in my note of July 20th upon which the fulfillment of the
entire program of assistance and cooperation were dependent. I asked
whether I might again bring them to his recollection in order that
there may be no misunderstanding: he replied that he would be glad
to hear any observations that I had to offer.
[Page 554]
I first cited the Morris Claim. The President replied that this was,
of course, an acknowledged debt of the Cuban Government based upon a
ruling of the Supreme Court, but that the determination of the final
amount must depend upon the examination which Dr. Cataya was
conducting and the results of his conferences with the
representatives of the claimants. Our ground as to the final amount
of this claim is so uncertain and we have so little information as
to what the claimants would actually accept that I deemed it wiser
to pursue this subject no further. I had in mind, however, the
suggestion made by Martínez Fraga to Mr. Welles that if and when the
“Obligaciones” Bill is passed, a request might be made of Warren
Brothers and Purdy & Henderson57 that they
might accept a very small portion of the second issue of the bonds
in order to permit the payment of the Morris Claim with bonds of the
original issue. I did not mention this, however, nor do I believe
this method of settlement would necessarily be practicable or
acceptable.
I recalled to his attention the undertaking that he had given me that
the Regulations under the Monetary Law would be embodied in that
Law. The President replied that a provision to that effect was
included in the Tax Bill. I did not discuss with him the point as to
whether such was the proper place for it to appear, but I infer that
this expedient is intended to overcome the necessity of remedial
legislation directed to this point alone.
I then referred to the Tax Bill—improving the reference which the
President had made thereto and I said that, although I had
understood that many of the features of the bill which had been
deemed objectionable by certain interests, both Cuban and American,
had been eliminated, there still remained provisions which were in
conflict with the Reciprocal Trade Treaty. He appeared visibly
interested at this observation and asked whether I could indicate
which they were: I replied that I had that day addressed to the
Secretary of State a memorandum concerning the proposed tax of six
percent on money exported from the country, and that I had recalled
to the attention of the Secretary of State the attitude which we had
taken regarding a similar proposed tax in 1937,58 on the same
grounds. The President stated that it might be helpful to know the
points in the Tax Bill which we considered at variance with the
Treaty: I replied that I would immediately follow this suggestion
and would submit to the Secretary in due course a memorandum to that
effect.
I then referred to the Revaluation Bill and said, quite frankly, that
Ambassador Martínez Fraga had acquainted me with the general program
to be followed: i. e. that the matter would be discusssed in [Page 555] the House as a result of
which amendments would undoubtedly be suggested which would
necessitate discussion by the Joint Committee of the House and
Senate; that the President will then view the situation in the light
of all the existing circumstances and may be able to indicate his
opinions either by suggested compromise or, in the last analysis, by
veto. The President said that that was exactly his intention and
that he was reserving his decision until that time—when he would
give the matter his close attention and would decide matters
according to his best judgment. I asked him whether he recalled the
observations which the Chamber of Commerce had had the honor to
present to him with regard to the Tax Bill: he said that he did and
that he thought it was an admirable document. I asked him whether
there had been brought to his attention the observations by the
American Chamber of Commerce and other sources and individuals,
concerning the Revaluation Bill: he replied in the affirmative. I
asked him whether he had seen the memorandum which our Department of
State had informally communicated to Ambassador Martínez Fraga on
the date of the latter’s departure from Washington and which
Martínez Fraga had translated for Colonel Batista: he replied that
he had not. I said that I would either request Ambassador Martínez
Fraga to supply him with a copy of the translation or, if it might
be understood that I would do so unofficially, I would undertake to
do so myself: he replied that he would give it immediate
attention.
