ment during recent years, aside from the disbursements made out of receipts which are to be pledged for the service of the proposed financing: In 1925-1926, $87,347,161.32 plus $51,000 extraordinary redemption of the bonds of the Interior Debt of 1905, made out of the surplus of the budget of that year. In 1926-1927, $81,698,105.89 there being a deficit of $1,354,774.78 caused by excesses in the budget assignments, specially in "Veterans' Pensions" which amounted to $682,242.19. In 1927-1928, 10 months $65,903,218.53. 8. All the other data which show whether or not, the use of the special sources of revenue which are to be pledged for the service of the new financing will leave sufficient ordinary revenue of the government for the meeting of its regular disbursements: The financing operation that is projected does not in any manner affect the regular revenue of the Cuban government sufficient to meet its ordinary disbursements inasmuch as said operation is secured solely and exclusively by 90% of the receipts corresponding to the years 1931 to 1934 (4 years of the Special Public Works Fund, Law of July 15, 1925 and in accordance with the Plan of November 10, 1926). Is it possible that in connection with the proposed new financing the Cuban government may have prepared connecting data which said government does not deem it proper to place at the disposal of the Government of the United States! Gazettes are attached which include the receipts of the budgets of the years 1925-1926 and 1926-1927 which correspond to questions 6 and 7 as well as of the movement of receipts and disbursements of the Special Public Works Fund corresponding to the years 1925–1926 and 1926-1927; there is also attached the data 21 which served as the basis for the requesting of the proposed financing. 837.51 Chase National Bank/7 The Secretary of State to the Chase National Bank WASHINGTON, June 20, 1928. SIRS: With reference to letters of Messrs. Rushmore, Bisbee and Stern 22 addressed to the Department under dates of May 22 and June 14, 1928,23 regarding your interest in negotiating a credit arrangement with the Cuban Government, I beg to inform you that, in the light of the information at hand, the Department desires to offer no objection to this proposed financing on the terms and conditions set forth in the Supplemental Agreement enclosed with the abovementioned letter of June 14. 24 You of course appreciate that, as pointed out in the Department's announcement of March 3, 1922, the Department of State does not pass upon the merits of foreign loans as business propositions nor assume any responsibility in connection with such transactions, also that no reference to the attitude of this Government should be made in any prospectus or otherwise. I am [etc.] For the Secretary of State: 837.51 Chase National Bank/8: Telegram FRANCIS WHITE The Secretary of State to the Ambassador in Cuba (Judah) WASHINGTON, June 20, 1928-5 p. m. 107. Your despatches Nos. 305 25 and 306, June 13 and 14, 1928. Department has informed Chase National Bank it will not object to its financing proposal. Bank presented the matter as urgent since agreement is not binding until ratified by Cuban Congress. Please present the following memorandum to the Secretary of State: "The Government of the United States, after careful consideration of the information regarding the Cuban financial situation transmitted to it through the American Embassy in Havana in response to the memorandum presented to the Acting Secretary of State of the Cuban Government, May 28, 1928, and of the draft 'Supplemental Agreement between the Republic of Cuba and Chase National Bank of the City of New York relating to Financing Payments to Contractors under Public Works Law does not desire to raise any objec tion to the increase in the public debt of Cuba involved in the execu tion of the latter contract." You may indicate orally to the Secretary of State and to the President that, inasmuch as the Cuban Government's memorandum of May 29, 1928, states that the purpose and reason for the proposed financing are to intensify the public works in accordance with Article 10 of the law of July 15, 1925, an unfortunate impression would be produced were the Special Public Works Fund drawn upon even temporarily to meet ordinary expenses of the Cuban Government during the time the latter is financing its public works program under its agreements with the Chase National Bank. KELLOGG 837.51 Chase National Bank/13 The Ambassador in Cuba (Judah) to the Secretary of State No. 320 HABANA, June 25, 1928. SIR: Referring to your telegraphic instruction No. 107 of June 20, 1928 in connection with the new Chase Bank financing, and after further consideration of the last paragraph thereof in regard to what I may communicate orally to the Secretary of State and to the PresiIdent, I have the honor to state that I have come to the conclusion that it is better not to make this oral communication at this time, unless you wire me to the contrary.20 In the first place, we have not sought to attach any conditions to our approval of the new loan, and we are now in the position of having supervised but not having interfered. In the second place, the budget as submitted to Congress by President Machado with permission to him to use general funds or funds from the Public Works taxes up to $7,000,000 for general budget expenses was approved by the Senate last week prior to the receipt of your telegraphic instruction No. 107. If the budget is amended as to this $7,000,000 in the House, it would give rise to considerable talk and our interference at least guessed at. There is no question in my mind but that the Cuban Government will be forced to use at least a large part of $7,000,000 of Public Works taxes to cover its $83,000,000 budget for the next fiscal year. It will have to do it either directly or indirectly because the general revenues will certainly not meet the budget. In such case our verbal objection made now would be tacitly ignored and Cuban finances would probably be in such shape that we would not want to make formal objection. It is true that the Cuban Government is going to start at once to finance its public works program under its agreement with the Chase National Bank but the Chase Bank has no lien upon the Public Works taxes until the fiscal year of 1930-1931. If prior to the making up of the budget for the next fiscal year you think the situation is such that there should be a strong objection made to the Cuban Government using Public Works taxes for its general expenses, we could make either a formal or an informal objection prior to the making up of the budget in April and May, 1929. I have [etc.] "No such instruction was sent. NOBLE BRANDON JUDAH SUGGESTION OF CUBA THAT A METEOROLOGICAL STATION BE ERECTED ON SWAN ISLANDS JOINTLY BY THE UNITED STATES, CUBA, GREAT BRITAIN, AND MEXICO "7 811.0141 Sw 2/100 The Secretary of State to the Ambassador in Cuba (Judah) No. 109 WASHINGTON, March 31, 1928. SIR: The Department has received your despatch No. 127 of March 21, 1928,28 with further reference to the proposal of the Cuban Government that the Governments of Cuba, Great Britain, Mexico and the United States jointly maintain a meteorological station at Swan Islands. The Department notes that the Government of Great Britain has informed the Cuban Government that it is not interested in the project, and that the Mexican Government has failed to respond to the Cuban overtures. It is further noted that the Cuban Government now proposes that Cuba and the United States jointly undertake the installation of the station, sharing equally in the expense thereof, provided that this Government has no objection. Should this plan be carried out the Cuban Government recommends that opportunity should not be closed for Mexico eventually to share in the expense of the undertaking. As an alternative the Cuban Government invites any other suggestions which this Department may care to make with regard to the financing of the installation and maintenance of the station. The original proposal of the Cuban Government to establish a meteorological station at Swan Islands was duly submitted to the appropriate Departments of this Government. While it appeared to be the consensus of opinion that the installation of the station is highly desirable, it was felt that the station, if installed, should be solely at the expense and under the control of the United States Government. No decision has as yet been reached, however, regarding the Department of this Government which should install the station and under which the station should function. Please informally advise the Cuban authorities that this Government is much interested in the Cuban proposal for the establishment of a meteorological station at Swan Islands and that the matter has been brought to the attention of the appropriate Departments of this Government in an effort to reach a decision as to the manner in which the installation and maintenance could be effected, and the necessary appropriations secured therefor. It is hoped that a definite reply can be made to the Cuban Government in the near future. I am [etc.] For the Secretary of State: Continued from Foreign Relations, 1927, vol. 11, pp. 530–538. 811.0141 Sw 2/103: Telegram The Secretary of State to the Ambassador in Cuba (Judah) WASHINGTON, April 19, 1928-6 p. m. 76. Department's instruction 109, March 31, and previous correspondence concerning the establishment of a meteorological station on Swan Island. You may inform the Minister for Foreign Affairs that the appropriate Department of this Government is giving active consideration to the establishment of a meteorological station and light at Swan Island in the near future. It may be difficult to obtain the consideration of Congress at this late date for the establishment of a permanent station during the coming summer, but it is still possible that arrangements may be made for a temporary station during the next cyclonic season. In any case, if such a station is established, the meteorological observations available will be freely supplied to Cuba, Mexico and other countries which might find them valuable. While the United States deeply appreciates the offer of the Cuban Government to share the expense of this station, it will not be necessary to ask the Cuban Government to do so. In the past this Government has consistently taken the position that the full expense for the maintenance of meteorological stations should devolve upon the Government having sovereignty over any particular location. KELLOGG 811.0141 Sw 2/109 The Cuban Ambassador (Ferrara) to the Secretary of State [Translation] WASHINGTON, June 4, 1928. EXCELLENCY: The cyclonic disturbances which generally occur around Swan Island, with effects which are felt in Cuba, constitute a serious danger to navigation in those regions, where the lack of radioelectric communications renders difficult the protection of shipping and human life. My Government desires to know whether that of Your Excellency would be inclined to grant permission for a Cuban concern, to be determined hereafter, temporarily to establish a radiotelegraphic station at Swan Island at its own expense as regards installation and maintenance, until the United States may decide to establish one there and as long as the United States may have no objection to its operation. This would largely improve the conditions of navigation referred to above, and the safeguarding of human life would be made much more effective. |