The American Ambassador in Cuba (Braden) to the Cuban Minister of State (Santovenia)53
Excellency: I have the honor to refer to Your Excellency’s distinguished predecessor’s courteous note No. 1124 of November 14, 1942, with which was enclosed a letter from the Minister of Finance addressed to the Prime Minister54 with regard to my Government’s request that the earnings of vessels either owned by or chartered to the War Shipping Administration be exempted from the 2.75 per cent tax established by Article III of Military Order No. 423 of 1900, as amended by Article XV of the Law of July 6, 1928; by the Emergency Tax Law of September 8, 1941; and by Law No.”7 of April 5, 1943, and from the 3.6 per cent tax established by the Law of October 9, 1922, as amended by the Public Works Law of July 15, 1925; Decree-Law No. 393 of November 8, 1935; a decree of December 20,1939; and Decree No. 3520 of December 31,1941.
In that note Your Excellency’s predecessor stated that investigations were being made in order to ascertain to what extent the economy of Cuba would be prejudiced by the possible suppression of these taxes, so that in case it were found that their suppression would not appreciably affect revenue collections, my Government’s request might be granted.
As mentioned in the Embassy’s note No. 731 of October 15, 1942, to which note No. 1124 was a reply, the earnings on which the tax exemptions are sought are derived from the operation of three classes of vessels, namely a) those owned by the United States; b) those on bareboat charter to the War Shipping Administration, and c) those on time, charter to the War Shipping Administration. In all these cases the vessels are under the complete control of my Government, represented by the War Shipping Administration, and carry only such cargo, ply on only such routes and otherwise render only such services as my Government determines and directs. The operations of these vessels are, of course, coordinated with other essential operations of my Government and of the Governments allied or cooperating with it in the prosecution of the war and, therefore, in view of the existing conditions throughout the world, all such services can appropriately be considered as not only public services rendered in the interest of my Government, but also, to a corresponding degree, as public services rendered in the interest of all Governments associated in the common cause against the Axis powers.[Page 273]
It was also pointed out in the Embassy’s aforementioned note No. 731 that, in the opinion of my Government, the collection of the taxes under reference on the earnings of vessels either owned by or chartered to the War Shipping Administration constituted taxes on revenues accruing to the United States, and I brought to the attention of Your Excellency’s Government the fact that my Government does not collect taxes on earnings in the United States derived by other Governments from the operation of ships.
I might add at this time that inasmuch as the War Shipping Administration is an official agency of my Government, the exemptions requested fall well within sub-paragraph a) of the communication of the Minister of Finance of November 11, 1942,55 of which a copy was enclosed with Your Excellency’s predecessor’s note No. 1125 of November 14, 1942, in which it was stated that consideration should be given to requests for exemption from Cuban taxes when such requests were made by and on behalf of official agencies of a friendly Government.
I venture to express the hope, therefore, that the investigations mentioned in note No. 1124 have now been completed and that Your Excellency’s Government will shortly be able to arrive at a favorable decision in the matter.
Please accept [etc.]