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

No. 23

Sir: I have the honor to transmit herewith, as of interest to the Department, copy of a memorandum prepared by a member of the Embassy staff40

Respectfully yours,

For the Ambassador:
James H. Wright

Counselor of Embassy
[Page 972]

Memorandum for the Ambassador

. . . . . . . . . . . . . .

Embassy’s Relations with the Cuban Government on Labor Matters. In line with our Government’s policy, the Embassy has made no attempt to intervene in labor conflicts affecting American firms, except where (1) an official agency of the United States Government is involved; (2) the conflict has a direct bearing on the war effort; or (3) adequate legal protection has not been given to American interests, or where such interests have been discriminated against.

In such cases, the Embassy, when appropriate, has made formal or informal representations to the Cuban Government, either through notes to the Foreign Office or through conversations with Government officials, including the President,41 the Minister of Labor, and others. On the whole, the cooperation which has been obtained from the Grau Government in these matters has not been very satisfactory.

Recent instances in which the Embassy has sought the cooperation of the Cuban Government in labor matters have involved (1) dismissals of workers by the United States Commercial Company Agency, an official agency of the United States Government, which has had to discharge workers by reason of the curtailment and final termination of its operations in Cuba. … (2) port workers’ strikes and stoppages, which have delayed the dispatch of WSA42 vessels at Cuban ports; (3) protection for established American accountants and accounting firms in Cuba, whose continued practice in Cuba is threatened by a recent law and by the National Association of Public Accountants; (4) the Motembo case, involving an American naphtha mining firm which has thus far been denied permission to liquidate by the Cuban Government.

The last case will be further described for illustrative purposes. The American firm, which has been engaged in drilling and extracting naphtha gas in Motembo has been trying to liquidate and dispose of its equipment because of continuing financial losses. The Minister of Labor has failed to act on the company’s long standing application for permission to liquidate. In addition, about one month ago, following a labor conflict in the area, the Cuban Government “intervened” [Page 973] the firm and ordered all dismissed workers reinstated and production resumed. As a result the company has been suffering further financial losses and has been unable to liquidate. The Cuban Government has thus far failed to grant the company relief, in spite of numerous notes addressed by the Embassy to the Foreign Office on the subject and many conversations between officers of the Embassy and various Government officials.

Conclusion. While it is undeniable that most of labor’s gains in Cuba are the result of their legitimate aspirations and that there is still much room for the economic improvement and greater security of the Cuban worker, the disquieting features of the labor movement at this stage are found in the growing ascendancy of the Communist labor leadership—with all the intangible implications of a Moscow dominated Communist movement—the passive and ineffective attitude of the Government with respect to labor excesses, an attitude which can be exploited by unscrupulous labor leaders, and the steep increase in labor costs in Cuba without an increase in labor efficiency, which augurs ill for the development of Cuban industry and for the competitive position of Cuba in the world market.

E[ugene] D[esvernine]
  1. Special Assistant Eugene Desvernine.
  2. President Ramón Grau San Martin.
  3. War Shipping Administration.