The Under Secretary of State ( Welles ) to the Secretary of the Treasury ( Morgenthau )
My Dear Mr. Secretary: During the last two or three years, as you are aware, the Department has on numerous occasions discussed many phases of Cuban economic affairs with the Treasury and other appropriate agencies of this Government. Such discussions have included, among other things, reform and reorganization of the Cuban tax and fiscal systems; reorganization of the Cuban monetary and banking system, including the question of the exchange relationship between the Cuban peso and the dollar; the development of any new productive facilities in Cuba; and the carrying out of much needed public works, including the reconstruction of the Habana water works.
The carrying out of any of these projects has in the past been postponed due to the delay of the Government of Cuba in settling on a satisfactory basis a number of problems outstanding between the two nations. During the last few days, however, the Cuban Congress [Page 779] has adopted legislation73 settling one of the most troublesome issues, that of the obligations to American contractors who constructed public works in Cuba in the twenties. The Department now believes that, when this legislation becomes law, this Government should be prepared to consider and discuss with the Cuban Government a number of the projects mentioned above which are of special interest to Cuba.
The Department therefore requests that, in anticipation of discussions in the near future of many phases of Cuban-American economic relations and the Cuban economy, the Treasury undertake a broad study of the Cuban monetary, banking and fiscal situations in relation to the whole Cuban economic structure. The Department is of course prepared to render every possible assistance in such a study. The Department is also requesting in anticipation of the forthcoming discussions, that the Export-Import Bank review its files with regard to the Habana water works and other projects.