The Chargé in Cuba (Woodward) to the Secretary of State

No. 1888

Sir: I have the honor to refer to my despatch no. 3631 of May 29, 1946, entitled “Further Developments with Respect to Guantánamo Water Supply Negotiations”29 and to enclose a copy of the document entitled “Proposed Bases for the Operation of the Aqueduct Built by the United States Government for the Guantánamo Naval Base”,29 a Spanish translation of which on May 7, 1946, was handed by Mr. Fiallo, attorney for the Schueg Chassin Company, to the Sub-Secretary of State, Dr. Gonzalez Muñoz, in connection with the purpose of the Base to obtain the permission of the Cuban Government to sell the so-called second water-works system. It is understood (reference despatch, enclosure 2, last sentence paragraph 1; and paragraph 3) that these “proposed bases” are satisfactory to the Commandant, Guantánamo Naval Base.

On July 12, Dr. Güell of the Ministry of State, after a general discussion of this matter, handed an officer of the Embassy a proposed draft note, a translation of which is enclosed,29 which the Ministry would be willing to address to the Embassy on receipt from it of a note composed along the lines indicated in the draft proposal.

It thus appears that the Cuban Government is disposed to permit the sale in question on the basis of the conditions (or “bases”) proposed by Schueg to the Navy, provided that in its note seeking Cuban [Page 713] authorization for such sale the Embassy would stipulate four clausal considerations, to wit:

The sale involves no “enlargement or additional right” for the United States Government in connection with the Guantánamo Base.
Cuba retains full “sovereignty and protection” of the second water-works area and, in case of war, would protect the property “in consultation and cooperation with the United States”.
The transaction is to be realized “in accordance with the laws of the Republic, of the State, the Province and the Municipality, and the new water-works system will remain subject to those laws”.
“Other details” relative to the transaction will be worked out “in conformity with the aforementioned laws of the Republic, of the State, the Province and the Municipality”.

As will be seen, the Ministry’s draft proposal, which it has been careful to qualify as “unauthorized”, is in unfinished, preliminary form and drawn in too general terms to be accepted without careful examination and study of the full potential significance of the terminology, particularly with respect to taxation. The matter is being reported to the Department, however, for an expression of its views.

In the discussion referred to above, the Ministry official mentioned that the Minister of State was “quite anxious” to effect an exchange of notes along the above lines at the earliest possible moment, and referred to “possible political embarrassment” which the Government might suffer as a result of too great delay in having the water-works transferred to Cuban ownership and operation. He also said quite frankly that the first two clauses mentioned above were conceived to counter political apprehensions or attacks, a consideration likewise attaching to the last two which might, however, be more concerned with the application of fiscal and social legislative measures.

A copy of this despatch is being sent to the Commander of the United States Naval Operating Base at Guantánamo for his information.

Respectfully yours,

Robert E. Woodward
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