837.61351/2891: Telegram

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

127. My telegram No. 102, March 4, noon, and despatch No. 3638, March 10 [11], Investigation reveals that at least one of the three American banks here is in fact charging up to 8% on advances in conjunction with the present sugar crop notwithstanding the security provided by the crop sale contract with the American Government. [Page 319] It also seems established that the mills paying the lowest rate (3% to 4%) include many American owned mills (and those with special bank relationships such as General Sugar Estates with National City Bank; Atlántica del Golfo and Punta Alegre with Chase, et cetera) whereas mills paying highest rates are mostly Cuban. Representative of Boston bank states that most of his clients are being accommodated at 4% to 5% he having only one loan above the latter figure and that at 6%.

Admitting that there are various factors involved including the absence of war risk insurance on sugar in Cuba, nevertheless I do not find convincing the explanation made by the bankers and the impression persists that at least two of the American banks are trying to charge all the traffic will bear. In any case the attitude of López Castro described in my telegram No. 102 and reflected since then in various conversations with other officials would appear to have considerable justification.