800.8836/1216
The Secretary of State to the Ambassador in Cuba (Braden)
Sir: Reference is made to your airmail despatches nos. 5420 of December 15, 194361 and 5653 of January 11, 1944, and enclosures, in relation to the concessions of American-owned terminal and warehouse companies in Habana.
It is suggested that, unless you perceive objection, you address a note to the Ministry of State stating that this Government has given careful consideration to the contents of the memorandum enclosed with the Minister’s note of December 2, 1943,61 but that it is constrained [Page 1003] to inform the Cuban Government of its views that the contentions advanced in support of the Government’s position (summarized at pages 5–6 of the translation of the memorandum) are effectively refuted in the memorandum which the companies submitted to you on January 5, 1944, a copy of which you may enclose with your note to the Ministry.
You may observe that it seems to be clear that the original concessions were in the nature of contracts between the companies and the Government (“administrative contracts of public law”) evidenced on the one hand by petitions addressed to the Government by the companies setting forth proposed tariffs and regulations for the construction, operation, and maintenance of terminal and warehouse facilities, and, on the other hand, by decrees of the Government granting the petitions on the basis of the terms proposed. It also seems clear that the action taken in 1920 culminating in the issuance of Decree No. 665 was not the result of unilateral action on the part of the Government, as alleged in its memorandum, but the result of a petition of the terminal companies proposing that the regulations and tariffs fixed by the various individual concessions be supplanted by uniform regulations and tariffs to be applicable to all concessionaires. This action on the part of the companies and the acceptance of the proposals by the Government constituted a modification, by mutual agreement of the parties, of the terms of the original concessions and cannot properly be regarded as constituting an acknowledgment by the companies of any alleged right of the Government to modify unilaterally the terms of the concessions.
With specific reference to the contention advanced in the Government’s memorandum to the effect that the rights of the companies under their concessions to regulate, within certain maximum limits, storage charges were terminated by a decree issued prior to the issuance of the decrees referred to in the Department’s instruction of September 22, 1943,62 that is, Decree No. 1896 of July 10, 1942, you may make the following observations:
- (a)
- It is specifically stated in the decree that the regulations and tariffs contained in Decree No. 665 of April 26, 1920, which are being cancelled, are those which “have been substituted by the tariffs approved by the Intelligence Commission” in 1925 and which are described in the third “Whereas” of the decree under discussion as “special tariffs for laborers, longshoremen, lightermen, and tally clerks”; and
- (b)
- Even if the decree could be properly regarded as purporting to cancel tariffs and regulations governing storage charges and free time, it is pointed out that the contention of the companies that rights vested in them by their respective concessions cannot lawfully be unilaterally modified by the Cuban Government by such a decree appears [Page 1004] to be fully supported by decisions of the Supreme Court of Cuba, which decisions are apparently ignored in the memorandum of the Cuban Government.
You may add that it is the view of this Government that such other relevant contentions as are set forth in the memorandum of the Cuban Government appear to be adequately met by the observations contained in the memorandum submitted on behalf of the companies, and require no elaboration.
You may also point out that in reliance upon the terms of their concessions which accorded them the right to conduct their operations and collect charges within certain fixed maximum limits, and in the light of principles of Cuban law that such concessions were not subject to modification by unilateral action, the American interests involved invested large sums of money to provide the port with adequate and modern facilities. Yet the orders complained of purport not only to modify unilaterally the terms of the concessions by depriving the companies of the right, inter alia, to collect double charges for goods left in storage beyond a specified period, but also to substitute therefor a surcharge under the guise of “sanction for delay” in withdrawing merchandise from warehouses, which surcharges inure not to the benefit of the companies owning the warehouses but to the Government itself, apparently to be used for the construction of Government warehouses to compete with warehouses established by the companies.
It is suggested that you also state that the situation created by the orders complained of, and also that created by Decree No. 2 of January 3, 1944 providing for a 15 percent wage increase for port workers and at the same time purporting to “freeze” at present rates the charges collected by the companies for services rendered, are viewed with serious concern by this Government and that you have accordingly been instructed to enter a formal protest and to request that the Government of Cuba take such steps as may be necessary to correct the situation. In that relation you may desire to indicate that the fact that the companies are being deprived of substantial revenues to meet the increasing costs of conducting their operations, and in the meantime accumulating corresponding claims against the Cuban Government, would seem to require that the necessary steps be taken as promptly as possible.
As suggested in your despatch no. 5653 of January 11, 1944, the Department is bringing the matter forcibly to the attention of the Cuban Ambassador,65 and you are authorized to take such additional action in the matter as you may deem appropriate.
Very truly yours,