837.51/2812: Telegram

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

122. Embassy’s despatch no. 2540 of August 2393 and telegram no. 111 of July 31 [August 25]. The Minister of Finance today reiterated his desire to obtain the assistance of the Export-Import Bank in the purchase of 9 million dollars worth of gold to serve as backing for an issue of 15 million peso certificates. He pointed out that the Cuban peso is now virtually at par with the dollar so that the additional peso certificates would affect the exchange market only slightly if at all and that they will in fact be needed to meet the increasing demand for currency during the coming grinding season in view of the anticipated much larger sugar crop. Minister added that due to improving collections the estimated 1941 budgetary deficit is being revised downward and that if the Government can raise the necessary amount through the sale in Cuba of short term treasury notes the seigniorage from the proposed certificates issue would be used as Government’s share of the capital of the proposed Central Bank. He is however extremely anxious to have the seigniorage in prospect so he can face “any eventuality”.

I am favorably impressed with the Minister’s estimate of the present situation and probable future improvement; moreover I believe [Page 193] local commerce can now absorb additional pesos and that they might even be urgently required in connection with the next crop. Beyond this however it seems to me desirable as a matter of general policy to extend this cooperation to the Minister who is very helpful in all matters for betterment of Cuban-American relationship and who is making genuine efforts to put Cuba’s financial house in order.

  1. Not printed.