Office of the Historian

737.13/9–751

Memorandum from Mr. Harvey R. Wellman of the Office of Middle American Affairs to the Assistant Secretary of State for Inter-American Affairs (Miller)1

confidential
[Washington,] September 7, 1951.

Subject: Projected visit of Minister of State Gans2 to Department

The new Cuban Minister of State, Oscar Gans, has informed our Chargé in Habana that he expects to return from the San Francisco [Page 1360] Conference3 via Washington in order to have three or four days in Washington to consult Department officials.4 The Embassy speculates reasonably enough that the visit probably concerns the proposed exchange of notes on the new sugar legislation and states that this matter is becoming increasingly important to the Cuban Government.

Recommendation

It is recommended that after the New Foreign Minister has had ample opportunity to present the views of his Government and to consider what the United States Government is prepared to offer in the way of a note, the Department officers receiving him then inform the Foreign Minister that they would like to bring to his attention several situations which are unsatisfactory and the rectification of which is of great interest and importance to the United States Government. It is recommended that he be asked what measures the Cuban Government will commit itself to take to remedy the following situations:

1.
Uncollected American private claims
 
Foreign Minister Suarez Fernandez5 gave informal assurances that the adjudicated claims would be paid.6 Our position is that the Cuban Government should make a substantial payment on these long-standing obligations and should arrange for the orderly liquidation of all the claims, including those adjudicated by Cuban courts, those acknowledged by agencies of the Cuban Government and presumably not subject to question, and all other legitimate claims not evidenced by court decision or administrative acknowledgement.
2.
Discriminatory taxation of American imports
 
Cuba has been taxing, contrary to Article III of GATT, some imports at a higher rate than the same domestic products. American exporters and their Congressmen have been complaining most about the discriminatory gross sales tax on imported lumber. Minister Suarez Fernandez promised to have this discrimination removed, but the Ministry of Finance has informed the Embassy that it is no longer interested in this matter now that Suarez Fernandez has resigned.
3.
Foreign Accountants
 
The Cuban Government has not replied to our memorandum of March 8, 19517 setting forth a basis for settlement satisfactory to the American accountants involved. We supplied the Ministry of State in July at its request, information showing that Cubans are permitted to practice accounting in most American states and in all the important financial areas, thus giving the Cuban Government a basis in international reciprocity to rectify this situation. Criminal prosecutions for illegal practice are still pending against representatves in Cuba of American accounting firms.

It would seem plausible that the Cubans, having been disabused of their belief that they have a fixed position for all time in the United States sugar market, would clean up these situations as soon as possible and remove this source of ill will. It is more likely, however, now that the new sugar legislation is approved, that when they are able to obtain from us the most satisfactory note from their point of view that we are willing to give, they will give little attention to these situations on the ground that the question of sugar has been resolved until 1956. This is an opportunistic position but one characteristic of the Cuban Government in recent years.

Therefore if, as the Embassy states, the obtaining of a note regarding sugar legislation is becoming increasingly important to the Cuban Government, for internal political reasons, it behooves us to make use of every bit of leverage which the immediate situation provides.

  1. Addressed also to Mr. Mann and Mr. Bennett; the source text bears the initials of each of the recipients.↩
  2. Oscar Gans y Martinez assumed office as Cuban Minister of State on August 30, 1951; on October 1, he was appointed Prime Minister of Cuba.↩
  3. Reference is to the Conference for the Conclusion and Signature of the Treaty of Peace with Japan, held in San Francisco, September 4–8, 1951. For documentation on the conference, see vol. vi, Part 1, pp. 777 ff.↩
  4. Minister Gans visited the Department of State on September 11, accompanied by Ambassador Machado. In a memorandum of conversation between Mr. Miller, Minister Gans, and Ambassador Machado, dated September 11, 1951, Mr. Nufer stated that the participants discussed the exchange of notes concerning sugar recently proposed by the Cuban Government and the question of claims held by United States nationals against the Cuban Government, and that in reference to the latter Minister Gans made the statement that his government had set aside a sum of money which it intended to use to liquidate a portion of the claims (237.1141/9–1151).↩
  5. In despatch 2407, from Habana, June 5, 1951, Chargé Elbrick had reported that Minister Suarez Fernandez had stated that he would first try to obtain his government’s consent to the payment of the adjudicated claims, and then attempt to find a way to pay the remainder of the claims (611.37/6–551).↩
  6. The Cuban Government made no payments on outstanding claims owed to United States citizens during 1951.↩
  7. Not printed.↩