It is my intention to see Colonel Batista today or tomorrow with respect
to this matter.
The American Ambassador (Messersmith) to the President of Cuba (Laredo Brú)
It has been reported that the Finance Committee of the House of
Representatives will meet shortly to consider the two bills
presented recently to that body providing for the service of the
remainder of the Public Works Debt.
The American creditors, Warren Brothers, Inc., and the Purdy &
Henderson Company, have furnished the Embassy with a draft, prepared
by competent counsel, which would bring the so-called Casanova
project, introduced into the Senate in November, 1938, and the
so-called Grave de Peralta project, introduced in the House of
Representatives recently, up to date so far as revisions are
necessary to cover [Page 755] the
lapse of time since the agreement between the creditors and the
Cuban Government was reached. A copy of this draft, marked (a), is attached. The Embassy is informed that
the principal changes from the so-called Casanova project are as
The Casanova project was to be dated January 1, 1939, and was
to be amortized by 1953.
Project (A) calls for an issue bearing date of January 1,
1940, to be amortized by 1954.
The Casanova project calls for cancellation of coupons 1–2
and 3 on the Bonds of 1977. Project (A) calls for
cancellation of coupons 1–2–3–4 and 5.
The Casanova project gives the Cuban Government 180 days for
issuance of new bonds. Project (A) reduces this period to
120 days, to keep the settlement in 1940.
Project (A) also provides that both interest payments for the
year 1940 be made on December 31, 1940. This is done as the
first semester has passed.
The Embassy is informed that the project, if approved in the form
suggested, would represent a cancellation of an additional year’s
interest (1939), representing a loss of $391,630 to Warren Brothers,
Inc., and of $53,127 to the Purdy & Henderson Company. However,
the Embassy is informed that these companies, as evidence of their
willingness to cooperate in reaching an immediate solution, are
prepared to accept these additional losses.
Habana, July 23, 1940.