837.51/2810: Telegram

The Chargé in Cuba (Briggs) to the Secretary of State

111. For the Under Secretary. The Minister of Hacienda asks that you be informed of his submission of a memorandum outlining his financial problem and his suggestion for handling it—this with reference to his conversation with you last month (please see Ambassador Messersmith’s letter of August 13,88 and despatch no. 2483, August 13).

The memorandum in question was forwarded August 23 with despatch no. 2540.88 The Commercial Attaché89 and I spent last evening discussing it in detail with García Montes. What he hopes to obtain from us are [Page 191]

The loan of services of an expert on banking legislation (urgently requested by the Minister some days ago, please see despatch no. 248390); García Montes is somewhat impatiently awaiting our reply.
A short-term Export-Import Bank loan of $9,000,000 to buy gold which Cuba would utilize as coverage for an issue of $15,000,000 paper pesos 6,000,000 of which would be used to balance the budget in the event the business community turns down the Minister’s scheme for an internal short-term loan to meet the deficit.
A bill to increase all taxes 20% for the balance of this calendar year is now before Congress. As this measure reads it would apply to import duties including those on the bound trade agreement items. While recognizing that assent on our part to having the increase apply to these consolidated items doubtless cannot be anticipated García Montes frankly hopes that our objections may be “for the record” and not insistent. I of course gave him no assurances on that score; on the contrary I said that having in mind tariff benefits which Cuba hopes to obtain through the pending trade agreement negotiations I felt this was a particularly inopportune moment for Cuba to try to raise the rates on American products. I stated further that for Cuba to endeavor to do so might in my opinion play directly into the hands of elements in the United States unfriendly to Cuba and finally I thought our protest would be prompt, emphatic and by no means merely “for the record.” If the foregoing represents the Department’s view I believe it would be helpful for me to be instructed so to inform the Minister as promptly as possible (having in mind that he hopes that this bill may be enacted before the end of this week).

Comment concerning the proposed loan is contained in despatch 2540.

  1. Not printed.
  2. Not printed.
  3. Albert F. Nufer.
  4. Supra.