811.516 Export-Import Bank/7–744
Memorandum by Mr. Eugene LeBaron of the Export-Import Bank of Washington16
Reference is made to Airgram No. 1493 of July 7, 1944 addressed to Mr. Pierson through the Secretary of State by Mr. Braden with further regard to the credit established in favor of the Republic of Cuba to aid in financing a public works program.
[Page 984]In view of an apparent misunderstanding as to procedure adopted by Eximbank, and certain inaccuracies in the figures cited in the above-mentioned airgram, the following statement is submitted:
[For statement, see facing page. Following the statement are paragraphs numbered 1, 2, and 3 (not printed), giving details of Export-Import Bank procedure in the operation of this credit.]
- 4.
- Eximbank has approved projects which it is now estimated will cost $23,622,000. The final cost of these projects will probably exceed this figure.
- 5.
- Eximbank will approve no new projects. The unallocated balance of the credit will be held as a cushion to cover Government authorized increases in wages and freight and other unusual unforeseen contingencies. The last project approved was approved September 29, 1943.
. . . . . . . . . . . . . .
- 7.
- Pursuant to an understanding reached late last month during conversations between Messrs. Pierson, Montoulieu and García Montes, Eximbank will continue to approve contracts for sub-projects necessary for the completion of any given project. Approval of independent sub-projects, such as new tributary roads, will continue to be held in abeyance. Ing. Montoulieu and the Bank agreed upon which sub-projects, the approval for which has already been requested by the Commission, are to be held in abeyance.
- 8.
- Total disbursements by Eximbank under the credit to date: $3,125,000. The Commission has informed Eximbank by cable that Eximbank may shortly expect a note for $280,000.
- 9.
- Eximbank is not anxious to “cancel the credit” for the sake of canceling the credit. It believes that the purpose for which the credit was established no longer exists. It is convinced that improved economic conditions in Cuba amply enable the Republic to finance the program out of current revenues. Although conversations were initiated because of the disintegration of the Commission as well as improved economic conditions, Eximbank limited itself in its efforts to have Cuba itself finance the program to pointing out (subsequent to the initial conversation with Dr. Concheso and the memorandum of March 29 handed to him) that the use of Cuba’s own funds would redound to Cuba’s benefit. This approach was adopted because the Agreement of April 8, 1942 offered Eximbank no alternative.17
Credit No. 294—Republic of Cuba
Status as of July 14, 1944
| Project Number | Project Description | Original Approval | Final Approval | Contracts Awarded | Contract Price Plus Overhead |
| 1 | Central Highway | $6,080,254.26 | $7,438,144.73 | $5,308,780.61 | $7,438,144.73 |
| 2 | Santiago Waterworks and Paving | 3,247,797.76 | 3,340,702.49 | 792,480.60 | 950,976.72 |
| 3 | Guantánamo Waterworks and Paving | 2,964,004.59 | 2,964,004.59 | 0 | 0 |
| 4 | Rio Buey Irrigation | 319,067.01 | 335,314.17 | 0 | 0 |
| 5 | Refrigerated Warehouses | 1,566,200.00 | 1,454,705.63 | 1,159,353.22 | 1,454,705.63 |
| 6 | Agricultural Machinery | 300,000.00 | 300,000.00 | 0 | 0 |
| 7 | Tributary Roads | 7,450,000.00 | 7,450,000.00 | 2,394,880.88 | 2,871,428.99 |
| 8 | Country Roads | 40,000.00 | 40,000.00 | 0 | 0 |
| 9 | Telegraph Equipment | 300,000.00 | 300,000.00 | 0 | 0 |
| $22,267,323.62 | $23,622,871.61 | $9,655,495.31 | $12,715,256.07 |
- Transmitted to Havana in instruction 3414, July 19, not printed.↩
- The cancellation terms as set forth in article 9 of the 1942 Agreement and quoted in full by Ambassador Braden in despatch 6341 of March 17, not printed, did not give the Bank the right to cancel the credit unilaterally (811.516 Export-Import Bank/989).↩