811.516 Export-Import Bank/943
Memorandum of Conversation, by Mr. George F. Scherer of the Division of Caribbean and Central American Affairs
| Participants: | Dr. Aurelio F. Concheso, Cuban Ambassador |
| Mr. Warren S. Pierson, President, Export-Import Bank | |
| Mr. Eugene LeBaron, Attorney, Export-Import Bank | |
| Mr. John Fitch, Engineer, Export-Import Bank | |
| Mr. John Cabot, CCA87 | |
| Mr. Willard Barber, CCA–FMA88 | |
| Mr. George Scherer, CCA |
At the suggestion of Mr. Pierson, Ambassador Concheso appeared on March 28, 1944, at the former’s office to discuss the present situation of the Bank’s $25,000,000 credit for Cuba.
Representatives of the Bank explained in some detail the present paralyzed state of project activities. The most important project, the Central Highway, has progressed very little in the past few months, with inferior work being done in Pinar del Río and one of the contractors threatening the inspectors of the Snare Corporation.89 No orders have been placed for necessary equipment and certain asphalt supplies. No progress is being realized on the refrigerated warehouses.
It was indicated in addition that, owing to satisfactory economic conditions in Cuba and to the excellent fiscal position of the Cuban Government, there appears to be no further need for the credit in Cuba. Indeed, taxes established to service the credit have resulted in revenues far greater than the interest requirements.
Accordingly, in view of changed conditions, it would appear desirable to reexamine the credit under Section 9 of the agreement90 and perhaps to withhold further loans. (The Bank indicated that certain minor applications for funds are now being held in abeyance). [Page 973] It was proposed to Ambassador Concheso that he request his Government to have an official proceed to Washington to discuss the situation thoroughly.
Ambassador Concheso made the following points in his reply:
- (1)
- President Batista had expressed the view, when the credit was originally established in 1942, that it was actually not needed by Cuba, but that he would go through with it as a “Good Neighbor” gesture.
- (2)
- Shutting off further credits might involve unfortunate political implications, especially in view of the presidential campaign which will terminate in elections on June 1. Ambassador Concheso said he would have to give some thought to this matter and discuss it with President Batista.
- (3)
- If further credits are withdrawn, Ambassador Concheso wished to receive assurances that priority arrangements for material needed in this country would not be affected, fie referred especially to the sanitation projects at Guantanamo and Santiago de Cuba as having received White House approval. Mr. Pierson stated that there is no connection between the loan and priority matters, and the Ambassador was given the preliminary view that withdrawal of credit would not affect the priority situation. He was informed that this phase would be more fully investigated and that he would be kept advised.
The Ambassador stated that he plans to leave for Habana this week to discuss the situation personally with President Batista.
- Division of Caribbean and Central American Affairs.↩
- Division of Financial and Monetary Affairs.↩
- Frederick Snare Corporation, an engineering and construction company with central offices in New York City and wide business interests in Latin America.↩
- The Export-Import Bank loan agreement between the Bank and Cuba’s Comisión de Fomento Nacional (subsequently referred to as the Comisión, the Commission, or the National Development Commission of Cuba) was signed in Washington on April 8, 1942. It provided for a line of credit of $25,000,000 repayable in 30 installments semi-annually with interest at 4 percent. The loan was to be used for public works and agricultural projects. (837.51/2869) For previous correspondence on the agreement, see Foreign Relations, 1942, vol. vi, pp. 290–294, and ibid, 1943, vol. vi, pp. 240 ff.↩