837.516/413: Telegram

The Ambassador in Cuba (Braden) to the Secretary of State

177. To Harry White,93 Treasury, from Southard and Bernstein.94

In satisfactory conference Finance Minister95 stated our arrival most timely as Government considers final drafting of bank law should be undertaken at once.
Major issues are:
Whether Board of Directors should have more representatio of member banks and possibly trade associations. Government still agrees with Mission and will probably maintain stand.96
Whether superior banking council should have less Government representation and limited powers over Board of Directors. Government probably not insistent on present draft law if its stand on point (a) can be maintained.
Whether inspection of private banking should be in Central Bank. Government still thinking of independent inspector general [Page 244] of banks but may be open to compromise in form of semi-autonomous department of inspection within Central Bank.
Whether stabilization fund should be autonomous or Department of Central Bank operating for account of Government. Technical problem and unlikely to cause difficulty.
Government unwilling to accept Mission proposal to omit title 5 on private banks.97 Argues article correct taking in lack of basic law covering creation, operations, and inspection of banks. However, willing to reduce this title to absolute minimum. We reiterated Mission’s reluctance to comment on this title, but shall study matter and await your views.98
Government wants views and support of Mission on all possible points but does not expect Mission to yield well-maintained positions. In latter cases Government hopes for Mission’s technical advice. We consider this procedure satisfactory. Still expect to return about April 5th. [Southard and Bernstein.]
  1. Harry Dexter White, Assistant to the Secretary of the Treasury.
  2. Frank Southard, Navy Department, and E. M. Bernstein, Treasury Department, had arrived recently in Habana for consultation with the Cuban Government on the establishment of a Cuban central bank.
  3. José Miguel Irisarri.
  4. For views of the American advisers, see telegram No. 190, infra.
  5. Title 5 of proposed Central Bank law.
  6. The Secretary of State, in telegram No. 381 of March 30, 6 p.m., transmitted to Bernstein, Southard, and Gardner the recommendation by Harry Dexter White that the Mission should avoid, if possible, taking any position with respect to the merits of title 5.