837.51 Cooperation Program/20

The Ambassador in Cuba (Messersmith) to the Secretary State

No. 1009

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It is, I believe, the almost unanimous opinion in sound and informed Cuban business and financial circles that the Cuban economy, and mutually advantageous relations between the United States and Cuba, would not be served by the loan asked for by the Cuban Government and for the purposes for which it intends to use this money. There is the definite fear here that if Cuba receives money from our Government in the form of a loan in order to meet budget deficits, it will stimulate increased and even more irresponsible spending. There is a general opinion in these informed quarters that the money has been asked for purposes which will admit improper administrative practices and that the end served would not be the improvement or the maintenance of the Cuban economic position. Outside of certain political circles in the Government, it is the general conviction that there should be a broad study of all the economic factors involved in the Cuban situation and in the economic relations between the United States and Cuba—the purpose of this study being to determine what steps could usefully and constructively be undertaken to aid Cuban economy.

For these reasons, sound public opinion in Cuba is unable to understand why the memorandum of the Cuban Government did not include two of the major problems of Cuba—sugar and tobacco. The [Page 784] exclusion of the improvement of the water works of Habana, which is also one of the soundest public works projects which could be undertaken, is not understood.

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Respectfully yours,

George S. Messersmith