Memorandum by the Assistant Chief of the Division of the American Republics (Walmsley)29

Cuban Taxation on United States Government Commercial Operations

I have from the beginning seen no justice in seeking exemption from taxation by the Cuban Government on operations of a commercial nature which, as an incident to the war, are carried on by a United States Government agency. The mere fact that most or all United States vessels in the Cuban trade are operated by and in behalf of the War Shipping Administration, does not justify asking the Cuban Government to surrender through taxation exemption a source of normal public revenue.

Plausible reasons might be adduced for seeking exemptions from certain types of taxes on United States Government officials working in Cuba on war enterprises, and on materials intended to develop war production. However, even here a line must be drawn between what would be normal commercial expansion to meet war demands, and expansion solely as a result of United States Government initiative and capital. Even in the latter case I would see no justice in seeking exemptions from taxes and levies of a Social Security nature.

In a nutshell, I cannot see how a foreign government can be expected to give up normal sources of revenue merely because the United States replaces private initiative for war purposes.

W. NWalmsley, Jr.
  1. Addressed to the Chief of the Division of the American Republics (Bonsai) and to the Adviser on International Economic Affairs (Feis). Both Mr. Bonsai and Mr. Feis indicated in the margin their agreement with this statement.