The Acting Secretary of State to the Ambassador in Cuba ( Norweb )
Sir: Reference is made to your secret despatch no. 1888 of July 16, 1946 concerning certain conditions proposed by the Cuban Government for the sale to the Schueg Chassin Company of the second water supply system at the Guantánamo Naval Base.
Your despatch, together with enclosures, was referred to the Navy Department for its comments and recommendations. A reply communication [Page 714] dated September 17, 1946,30 has been received from the Navy Department stating that it agrees in principle to the four stipulations suggested by the Cuban Government as a condition precedent to its formal approval of further negotiations with the Schueg Chassin Company for the sale and operation of the water supply system at Guantánamo. Pertinent excerpts from this communication are quoted below:
“I have examined the terms of the proposed bases for the sale of the water works in question to the Henri Schueg Chassin Company and the operation thereof, under contract, by that company, and find that a satisfactory framework is presented for further detailed negotiation which presumably will be carried out by representatives of this Department and the Schueg interests.
“I agree also in principle to the four clausal conditions imposed by the Cuban Government as a condition precedent to formal approval by that government of further negotiation for sale to and operation by the Schueg Company of the United States owned water works.
“Condition (a) appears to be an affirmation that the government of the United States is not seeking by the proposed contract and sale to enlarge its rights or the extent of its territory in the Guantanamo Naval Base under Article III of the Treaty of 1934, with respect to that base. Since no such purpose is intended or expressed in the proposed bases there is no objection to this condition.
“Condition (b) confirms the full sovereignty of Cuba in the land area on which the new water works is situated and assigns to that government the obligation of protecting the area in peace and in case of war defending it ‘in consultation and cooperation with the government of the United States for tactical necessities’. It would be desirable in connection with this condition to seek assurances from the Cuban Government that in case of labor unrest or a threatened closing down of the water works for any other reason, it would use its good offices to insure the continued operation of the plant.
“Conditions (c) and (d) stipulate that the purchase-sale of the new water works system and all details in connection therewith will be worked out in conformity with the laws of the Republic, of the State, the Province and the Municipality and that the system will remain subject to those laws. There is, of course, no objection to working out the purchase-sale agreement in accordance with existing laws of the Republic, State, Province and municipality. Once again, however, I consider it desirable to seek assurances from the Cuban Government that it will use its good offices to prevent the passage of any local law which would in effect cause an abrogation of the terms of the proposed contract.”
You should inform the Cuban Government that while this Government agrees in principle to the Cuban proposal of four conditional clauses in a note seeking authorization for the sale and operation of the water system, it is considered desirable that there be included in [Page 715] such a note a statement that in the event of strikes or any other conditions which might affect the water system, the Cuban Government will endeavor to insure the continued operation of the plant. There should also be included a stipulation that the Cuban Government will oppose the enactment of any local law which would in effect cause an abrogation of the terms of the proposed contract with the Schueg Chassin Company. If the Cuban Government agrees to the inclusion of these additional statements and to the proposal submitted to the Ministry of State on May 7, 1946 by the Schueg Chassin Company, you are authorized to effect an exchange of notes along the lines suggested by the Cuban Government.
Very truly yours,
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