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

No. 1146

The Secretary of State refers to the Embassy’s airgram No. A–1746 of October 7 and to the Embassy’s despatch No. 1771 of June 20, 1946 regarding the difficulties which have arisen in connection with the operation of the Seatrain Lines.74

The action taken by the Cuban Government in issuing Customs Order No. 1034 of June 8, 1946 constituted a definite threat to the continuance of service by the Seatrain Lines.75 The Department has reason to believe that any new and similar regulations will constitute a similar threat to the continued operation of not only the Seatrain Lines but also other similar services which may now exist or be contemplated. In this connection, the Department fully shares the views which the Cuban Government expressed when military needs made it appear that the Seatrain New Orleans would have to be removed from service76 and later when the same ship was not operating because of labor difficulties in the United States.77

It appears to the Department that the method followed by the Cuban Government, that is, the issuance of customs regulations to adjust difficulties not directly concerned with matters ordinarily dealt with in customs regulations, is most undesirable from the standpoint of the objective of relaxing barriers to world trade. The Department has not been informed that the customs order mentioned was necessary for purely customs purposes.

The Department also takes the view that any regulation which would unnecessarily hinder the efficient operation of the Seatrain Lines or similar enterprises would constitute a barrier to the full development [Page 755] of trade between the two countries. The existence of such transportation services has proved to be of mutual benefit to both countries. It has been stated that the withdrawal of such services might make the exchange of certain products virtually impossible.

It is the view of the Department that every effort should be made to convince the Cuban Government of the harmful effects on both Cuban and American interests, which would follow if substantial alteration is required in the nature of the service which has in the past been offered by the Seatrain Lines and other similar operations. To assist the Embassy in the matter, Mr. L. James Falck, Assistant Chief and Mr. Charles P. Nolan, Assistant Adviser of the Shipping Division are proceeding to Habana within the next few days.78 The Department is informed also that Mr. Graham M. Brush, President, and Mr. Joseph Hodgson, Vice-President, Seatrain Lines, Incorporated will arrive at Habana on Wednesday, November 20 to discuss this matter.79

  1. Neither printed. The Seatrain Lines, carrying freight cars in an ocean service, was one of the car ferry services operating between the United States and Cuba since 1914.
  2. This order, which required through freight upon arrival at Havana to be unloaded, warehoused, and reshipped, was suspended for 6 months but was to become effective again on January 2, 1947.
  3. Note of March 10, 1945, from the Cuban Under Secretary of State to Ambassador Braden, transmitted to the Department in despatch 1771, June 20, 1946, termed the retention of the Seatrain services “of outstanding importance for the normal conduct of Cuban economy” and “one more friendly gesture on the part of Your Excellency’s Government.” (800.8836/6–2046)
  4. In a note of April 26, 1946, Ambassador Belt requested the Department’s assistance in effectuating resumption of the Seatrain services between the ports of New Orleans and Havana. Pointing out that this interruption was unfavorably affecting the economy of Cuba, he further stated that the unavailability of the Seatrain’s service had aggravated the difficult situation already existing in the supply and distribution of such important commodities as lard and tallow which for reasons well known were generally imported into Cuba in tank cars. (800.8836/4–2646)
  5. A memorandum of December 10, 1946, by Messrs. Falck and Nolan, addressed to the Chief of the Shipping Division (Saugstad), stressed the fact that withdrawal of the Seatrain Line would not only he harmful to American interests but would result in damage to Cuban commerce and industry, and that the American Embassy and the Department had done everything possible to assist Seatrain. The Embassy had presented the case to the Cuban Government as well and forcefully as it could under the circumstances, but inasmuch as this Government had no treaty basis for protests and could not threaten retaliatory action, hence its only hope of success lay in persuading the Cuban Government that it was acting not only against American interests and trade but also against its own best interests. From observation and conversations, however, they concluded that apparently dock labor was able to get anything it wanted with the complete support of the Government, while the terminal operators and the shipping companies received little or no consideration. (800.8836/12–1046)
  6. In a letter of December 21, 1946, to the United States Maritime Commission, Mr. Brush reported that Seatrain service between the United States and Cuba had been suspended for the third time within 9 months due to Cuban regulations, and enclosed an announcement of the final suspension of service stating that these regulations appeared to be in conflict with various Cuban laws and were highly discriminatory and prejudicial against American ships and commerce. (800.-8836/12–2346)

    Ambassador Norweb reported in airgram 2148, December 30, concerning a Habana press account for December 28 that the Cuban Cabinet had approved on December 27 draft decrees relative to labor conditions and to cargo-handling provisions affecting the operations of Seatrain and car ferry and that Seatrain would probably be dissatisfied with the new legislation to the point of maintaining its decision to suspend the service (800.8836/12–3046).