437.11/12–1845

The Ambassador in Cuba ( Norweb ) to the Secretary of State

No. 727

Sir: I have the honor to refer to the Department’s airgram No. A–1766 of December 10, 194532 regarding the claims of American nationals against the Cuban Government, and to report herewith, in a preliminary fashion, on the present status of these matters.

In urging upon the Cuban Government the settlement of the accounts of American nationals and of the American Government, the Embassy has recognized the following classes:

1.
Sums owed the American Government under accounts with the Government of Cuba, including the $2,117,000 Lend-Lease account pending settlement, and the charge for $103,489.00 for peanut seed contracted for in 1943.33
2.
The Stowers compensation (not claim) case, into which there enters an element of personal hardship and suffering which renders its exceptionally rigorous prosecution a matter of immediate urgency without reference to the group or individual position of other private American claimants.
3.
The claims of American nationals against the Cuban Government which, in turn, are divided into three categories: a) those supported by court decisions; b) those otherwise openly or tacitly recognized by the Cuban Government; and c) those in dispute.

With respect to classes 1) and 2), the Embassy has, of course, no reservations as to procedure. They receive preferential attention, and payment is advocated at every opportunity in terms the strength of which is limited only by the civility requisite to diplomatic intercourse.

Under the third class there is a special case: that of the Isle of Pines Steamship Company claims.

[Page 967]

In a recent conversation with the Minister of Finance, Mr. Nufer34 brought up the Steamship Company’s claim for services rendered during the period 1940–1943. He reminded the Minister of the offer which he had made to Ambassador Braden early in 1945 to pay the company immediately its claims against the Government for 1944 and the beginning of 1945 and to pay its claims for the period 1940–1943 later in the year. Dr. Supervielle replied that, as is known, the 1944 claims had been paid in full. With regard to the 1940–1943 claim, he said that the Cabinet could make no appropriations while Congress was in session and that when Congress recessed he hoped to be able to obtain the Cabinet’s approval for a further appropriation to cover the claims under reference.

This situation is now complicated by the fact that, while Congress is still in session, it is understood Dr. Supervielle will shortly have to resign in view of his announced candidacy for the position of Mayor of Habana. He may not have the opportunity to press on the Cabinet, as a member thereof, the steps necessary to the end desired, though conceivably he may have success in this respect even after he ceases to be Minister of Finance.

Dr. Supervielle’s offer was based on his opinion that the provisions of the Constitution of 1940, under which a Tribunal of Accounts must be established for the purpose, inter alia, of determining the extent of Cuba’s floating debt and recommending ways and means for its settlement, did not apply to claims against the Cuban Government arising from obligations incurred subsequent to 1940 and that, therefore, it would be licit under the Constitution to pay the 1940–1943 accounts owing to the Isle of Pines Steamship Company even though they have become a part of the floating debt. It is conceivable that Dr. Supervielle, even were he to be armed with the President’s statement that he wished this payment to be made, might be unable to persuade his fellow Cabinet members of the validity of this interpretation, as the constitutional question is one on which two sides may be taken.

The remaining cases under class 3, insofar as a precedent for the handling of 1940–1943 claims may not be furnished by the solution of the Isle of Pines Steamship Company case, will doubtless have to await the establishment and operation of the Accounting Tribunal. A bill to establish this Tribunal was approved in part by the Senate in 1942 and has now been heavily amended after first reading in the House of Representatives and brought up for second reading and vote in the House. If passed, it will be returned in amended form to the [Page 968] Senate. The tribunal, within two years after its establishment, must, as previously mentioned, define the Republic’s total floating debt and propose ways and means for its liquidation. This might very possibly involve the issue of bonds to the creditors, although we should insofar as possible insist on cash payment of United States claims based on Supreme Court decisions and on supplies furnished the Cuban Government.

In pressing for the payment of claims to American creditors, the Embassy has no tool at hand more trenchant than forceful persuasion, which has been availed of to the full at every turn. I have told the President that I expect to bring the Stowers case up, every time I see him, until Stowers is paid. Though the President is regarded on balance as a sensitive man, it seems to cause him no intense concern or pain that he must allege technical difficulties as blocking the settlement proposed. I have frankly not derived real reassurance from his attitude, but refrain for the moment from passing any final judgment. Should the Congress recess, and the end of the year go by without the passage of a new budget bill, the Government would again, as in former years back to 1937, appropriate by decree, and an appropriation of $50,000 to buy a certainly not overvalued piece of land would be a small crumb to choke on. It may be that the new year, given the conditions predicated above, will see some action on this case.

Further than persuasion, however vigorous, no levers, instruments, threats, or possible concessions in exchange, have been furnished for my use in discussing the general subject of claims. One argument which is easy to use is the fact that Cuba is exceptionally prosperous at present; another is that Cuba will wish to maintain its standing in international banking and commercial circles as a nation prompt in the payment of its just debts. If complete good will on Cuba’s part may be relied on, neither argument is necessary; and if Cuba still, as under the late lamented Batista administration, actually wishes to avoid the conclusion of arrangements which will settle these claims, the two arguments cancel each other out; Cuba is prosperous in spite of a bad payment record outside the funded debt. It flourishes like the green bay tree.

But I am unwilling to conclude so soon that good will is entirely lacking. After all, Cuba meets its funded debt obligations handily. If the Grau administration has seemed to follow Batista’s path in respect to claims, it must be remembered that its activities were initiated in complete inexperience and, after fifteen months, have come to be characterized by a legislative impasse only now possibly on the point of solution. I would not venture to guess how stable the solution [Page 969] will be, but at least the Tribunal of Accounts bill has been the subject of recent action, largely as a result of the Embassy’s representations, and the fight over the budget bill will be terminated by the calendar if by nothing else.

While conceding the possible continued existence of Cuban good will to pay, I fear that the complications of the local political scene do not afford good grounds to hope the Tribunal of Accounts will be established by the brief spring session of Congress. Action would be unlikely before the September session, with the June elections behind. If the spring session should in fact show signs of bogging down on the Tribunal bill, the arguments in favor of re-submitting the Draft Claims Convention would be reinforced.

At this season of the year, as has been usual, sugar negotiations cast their shadow over the whole picture of business between the two governments, not necessarily to any ominous effect, but with the result that other discussions cannot enlist full Cuban attention. An eventual sugar settlement will still further clear the path for Cuban work on the claims.

Before reporting my views on the advisability of re-submitting the Draft Claims Convention, I wish to give further study to some of the circumstances which might contribute to or militate against its eventual acceptance by Cuba. A supplementary discussion on this matter will be forwarded at a later date.

Respectfully yours,

R. Henry Norweb
  1. Not printed; in this airgram the Secretary of State instructed that representations be made regarding Cuba’s failure to pay claims of long standing of American nationals, to implement the modus operandi to repay claims accruing since 1940, or to take any action with respect to a draft claims convention which had been presented by the Embassy (437.11/12–1045).
  2. See Foreign Relations, 1943, vol. vi, pp. 223 ff., passim.
  3. Albert F. Nufer, Counselor of Embassy for Economic Affairs.