837.51 Cooperation Program/232

Memorandum by the Chief of the Division of the American Republics ( Bonsal ) to the Adviser on Political Relations ( Duggan )

Mr. Duggan: The Habana waterworks proposition poses a rather difficult problem. The Export-Import Bank has, I understand, been willing to finance this project provided adequate legal and practical guarantees were set up. However, after several years of discussions between representatives of the Bank and of the municipality, to some extent also involving the two Governments, the municipality has now apparently decided to make a deal with the Canadian American Company.…

It does not seem to me that we can interfere officially or unofficially in this matter at this time in the sense of advising the Cubans for or against the proposition. However, I do think that it might be advisable to convey to President Batista the thought that if this enterprise is undertaken on the basis of private financing it will not necessarily be possible for the Export-Import Bank to be of assistance should the private financing prove inadequate. It would therefore seem of the very greatest importance that before any binding commitments are entered into, the Cuban Government make absolutely certain that they are making a contract with a responsible group and not signing an instrument which that group will later try to peddle around as a speculation.20

Philip W. Bonsal
  1. No conclusion to the problem of financing the Habana Waterworks was reached in 1943.