837.51 Cooperation Program/63

The Acting Secretary of State to the Ambassador in Cuba (Messersmith)

No. 563

Sir: The Department has read with interest your despatches nos. 1563 and 1625 of February 12 and 21, 194158 enclosing memoranda of [Page 142] conversations with Foreign Minister Cortina and President Batista, respectively, which you have had in accordance with the Department’s instruction no. 421 of January 11, 1941.

In the foregoing connection there is enclosed, for information purposes, copy of a memorandum on the “Status of the Cooperative Economic Program with Cuba”59 recently prepared for the Deputy Federal Loan Administrator60 on the basis of your reports.

The Department regards with sympathy the views of the President and of the Foreign Minister as to the desirability of a global commitment for financing individual projects as they are approved by the Export-Import Bank, and is prepared, provided agreement can be reached with the Cuban Government on the general categories under the global commitment, to recommend to the Federal Loan Agency public announcement of a commitment of $30,000,000. The Department would of course expect inclusion within this amount of the cost of the rehabilitation of the Habana water works. As you are aware, the Export-Import Bank will require the Cuban Government’s guarantee of the credit to the Municipality.

In this connection and with reference to your despatches nos. 1692 and 1714 of March 8 and 1161 there is enclosed a letter from the Deputy Federal Loan Administrator to the Mayor of Habana,59 together with office copies, on the subject of a credit for the Habana water works project. You should deliver this letter to the Foreign Minister for transmittal to the Alcalde as soon as an agreement upon the settlement of the Morris claim is reached.

It is therefore requested that you submit if you are in agreement with the above course the following information to assist the Department in formulating its recommendations:

The steps contemplated by the Cuban Government to reach a settlement of the Morris Claim.
Does the Cuban Government desire to obtain the $4,000,000 budgetary loan offered by the Federal Loan Administrator in his letter of December 20, 1940?62
An estimate of the increased revenues expected from the new tax legislation presented to the Cuban Congress.
A breakdown by amounts of the $30,000,000 maximum commitment which the Department is ready to recommend, somewhat as follows:
Budget loan (maximum, $4,000,000. If not desired, this amount may be allocated to b. and c.).
Agricultural diversification and development loans.
Public works projects.
Habana water works.

You may inform the Foreign Minister that the Department has been gratified by the efforts of the Cuban Government to bring about desired reforms and improvements in administrative and fiscal procedures, and that it is also prepared to take up with the appropriate agencies, upon the receipt of your further report, the question of the extension of the other assistance included in the outline program of economic cooperation.

Very truly yours,

Sumner Welles
  1. Despatch No. 1625, February 21, not printed.
  2. Not printed.
  3. W. L. Clayton.
  4. Neither printed.
  5. Not printed.
  6. Not found in Department files.