NAVY Budget increased by reason of reorganization under decree No. 1427 of 1917_--_. Repairs to schoolship Patria and gunboat Baire to date-- Cost of war supplies requested by Secretary of War and Navy, including radiotelegraph apparatus__. Sixteen submarine chasers___ Personnel and supplies for submarine chasers--. Installation for radiotelegraph stations, buildings, etc_‒‒‒‒ Total_-- $337, 644. 00 183, 639, 62 469, 679.96 1, 600, 000. 00 316, 160.00 227, 618. 45 ADDITIONAL COST $3, 134, 742. 03 $730, 325.92 Increased police force--- Cost of increased harbor police_. 24, 500.00 One million dollars has already been advanced to the Cuba Railroad, and an additional $2,000,000 will be loaned to that Company, making a total of $3,000,000. An advance has been made to the Cuban Eastern Railway Company of $93,000. The Acting Secretary of State to the Food Administrator (Hoover) WASHINGTON, February 19, 1918. SIR: The Department is in receipt of your letter of February 191 in which you state that owing to the general financial stringency in commodity loans and to the reactive effect of the stoppage of credits to German banking institutions in Cuba, to the higher price of Cuban sugar than normal, and to the slower movement of the sugar from Cuba to consumption, there has been imposed the necessity of organized finance for the Cuban sugar crop, and that the Cuban banks have already extended loans to their complete limit, and that unless some relief can be gotten within the next several days there will be a stoppage in the grinding of sugar, which will result not only in the destruction of large quantities of sugar but will bring about another sugar famine in the United States. You further state that this matter has been taken up with American financiers with a view to organizing a loan of $100,000,000 for this purpose, and that the Secretary of the Treasury has instructed the Federal Reserve Banks to lend every possible assistance in consummating the underwriting, and the Shipping Board has agreed to provide a minimum of 2,000,000 tons of shipping to move the sugar from Cuba to the United States. You further state that the banking interests which are ready to undertake this loan desire to be informed whether the matter is one which is in accord with the policy of the Department of State. 'Not printed. In reply, the Department desires to call your attention to a letter which was directed by the Secretary of State to the Secretary of the Treasury on February 12 in this connection, a copy of which is herewith enclosed, and wishes to reiterate the statement which was made in this letter to the effect that it trusts that the necessary credit to meet the present situation in regard to the Cuban sugar crop may be consummated at an early moment. I have [etc.] File No. 837.51/294 FRANK L. POLK The Cuban Minister (De Céspedes) to the Secretary of State No. 55 [Translation] WASHINGTON, March 6, 1918. MR. SECRETARY: I have the honor to deliver to your excellency the letter which accredits me as having been vested by the honorable President of the Republic of Cuba with full and general power and authority to negotiate and conclude with your excellency's Government and in the name and as representative of the Republic of Cuba the loan of 15,000,000 pesos in bonds of the Treasury of Cuba authorized by the law of July 30 of last year, and to deliver the bonds and receive the proceeds thereof. I beg your excellency to be pleased to advise the Treasury Department that I have presented the said credentials to the Department of State in order to perfect the loan of fifteen millions to my Government by the sale or on the security of the said bonds under the instructions I have received from the President and the Secretary of State of Cuba. I reiterate [etc.] File No. 837.51/295 CARLOS MANUEL DE CÉSPEDES The Assistant Secretary of the Treasury (Leffingwell) to the Counselor for the Department of State (Polk) WASHINGTON, March 7, 1918. DEAR MR. POLK: The Secretary of the Treasury is intending to establish a credit of $15,000,000 in favor of the Republic of Cuba and I will be obliged if you will advise this department whether the Republic of Cuba has power to incur this indebtedness and whether the Cuban Minister has authority to sign obligations for the amounts advanced. It is intended to take Cuban demand obligations for the amounts advanced, secured by the pledge of bonds of the Republic of Cuba authorized by the act of the Congress of Cuba of July 31, 1917. Very truly yours, 'Not printed. R. C. LEFFINGWELL File No. 837.51/319 The Assistant Secretary of the Treasury (Leffingwell) to the Counselor for the Department of State (Polk) 1 WASHINGTON, March 9, 1918. DEAR MR. POLK: Your letter of the 7th instant addressed to the Secretary of the Treasury has been duly received together with the enclosures: viz., copy of the letter of March 6 from the Cuban Minister to the Secretary of State and translation of the authority given the Cuban Minister by the Republic of Cuba. This authority is apparently limited to negotiations for a sale to the United States Government of certain bonds and the receipt of the proceeds resulting from such sale. The contemplated transaction with the Republic of Cuba is quite different. A credit in the amount of $15,000,000 has been established in favor of the Republic of Cuba and it is intended that cash advances be made therefrom upon the receipt of demand obligations of the Republic of Cuba secured by the hypothecation and pledge of the Cuban bonds authorized by the act of the Cuban Congress of July 31, 1917. The authority of the Cuban Minister above mentioned appears to be insufficient to give such obligations or to receive the proceeds thereof. In explaining the situation to the Cuban Minister I suggested either that he obtain a new authority in the same form as the old authority (with appropriate change in dates), except that there be added an additional power in substantially the following words: or in his discretion to negotiate and conclude a loan from the Government of the United States of America for not exceeding $15,000,000, to receive the sums from time to time advanced on such loan, to execute obligations therefor in such form as he shall approve and to hypothecate and pledge as security for such loan all or any of said 15,000,000 pesos of bonds of the Treasury of the Republic of Cuba, or that he obtain a new authority from his Government to execute the obligations in the form proposed by this Department (of which a copy is enclosed), to receive the advances and to pledge the Cuban bonds as security therefor. The form of obligation to be taken from the Republic of Cuba was handed the Cuban Minister. The Cuban Minister stated that he would advise with the State Department in regard to communicating with his Government in relation to the matter. I understand that the Cuban Minister is anxious to have some portion of the proposed credit made available in cash to the Republic of Cuba as soon as practicable and the Treasury Department is prepared to act when advised by the State Department that the Republic of Cuba has power to incur the indebtedness and the Cuban Minister is duly authorized to execute the obligations and to receive the advances. File No. 837.51/298 The Cuban Minister (De Céspedes) to the Secretary of State No. 61 [Translation] WASHINGTON, March 18, 1918. MR. SECRETARY OF STATE: I have the honor to deliver to your excellency, with a request that it be returned, the credentials which set forth the new powers that have been conferred upon me by the Honorable the President of the Republic, to conclude with the Government of the United States the loan of 15,000,000 pesos to my Government, secured by the bonds of the Treasury of Cuba, issued in accordance with the law of July 31, 1917.1 I beg your excellency to make my new credentials known to the Treasury Department. I reiterate [etc.] CARLOS MANUEL DE CÉSPEDES [Enclosure-Translation] MARIO G. MENOCAL PRESIDENT OF THE REPUBLIC OF CUBA TO ALL WHO THESE PRESENTS MAY SEE, GREETING: Know ye, that reposing special certainty and confidence in the integrity, tact, and ability of Señor Carlos Manuel de Céspedes y Quesada, Envoy Extraordinary and Minister Plenipotentiary of the Republic of Cuba to the United States of America, 1 have vested him in the full power and authority, of every description, to interview and confer, in the name and as representative of the Republic, with any person or persons authorized in good form by the Government of the United States of America who may appear vested with equal power and representative character, and with the said attorney or attorneys; in fact, to negotiate at will and conclude a loan from the Government of the United States of America in an amount that may not exceed 15,000,000 pesos, to receive at set periods the sums that may be delivered chargeable to the said loan, executing the corresponding obligations in the form that may be deemed expedient, and to pledge and be able to give as security all or part of the 15,000,000 pesos of bonds of Series A of the Treasury of Cuba authorized by the law of July 31, of the year 1917 last. In testimony whereof I issue the present full power signed with my hand, authenticated with the seal of the Nation and countersigned by the Secretary of State. Given at the City of Habana, at the Palace of the Presidency, on this 15th day of the month of March, one thousand and nine hundred and eighteen. M. G. MENOCAL Seal of the Republic of Cuba PABLO DESVERNINE File No. 837.51/295 The Secretary of State to the Secretary of the Treasury (McAdoo) [Extract] WASHINGTON, March 26, 1918. MY DEAR MR. SECRETARY: I have received your letter of March 7, wherein you inquire, first, whether the Republic of Cuba has the power to incur the indebtedness of fifteen millions of dollars, which is the amount of the loan proposed to be made to that country; and, 'Ante, p. 295. second, whether the Cuban Minister has the authority to sign obligations for the amounts advanced on the proposed loan. In reply, I beg to say that when the granting of a loan to Cuba by this Government was in contemplation during last summer, the Department took under advisement the political questions which it seemed pertinent to consider in connection with this matter, and in the Department's letter of September 15, to you, indicated its views that there appeared to be no objection to the proposed loan. In this letter reference was made to a note addressed to the Cuban Minister of the same date, a copy of which I enclose for your information. Your special attention is directed to the proviso expressed in this note, namely, that "the current expenditures of the Government of Cuba are not increased beyond the amount stipulated in the budget for the year 1917-18." This Department is not informed as to whether, since the date of this note, the current expenses of Cuba have been increased beyond the budget of 1917-18. It is presumed that your Department may have definite information on this point. Further consideration of the power of the Cuban Government to increase the proposed indebtedness, and the authority of the Cuban officials to act in the matter, would appear to involve a construction of the Cuban law of July 31, 1917, which presumably is still in effect. This is a matter which your Department has doubtless examined into thoroughly, but to which this Department has given little consideration. The Department's letter to you of March 23 commented upon the official construction of this act in the full powers of the President of Cuba transmitted to you in that letter. It is believed that that letter will also be found to cover the second inquiry in your letter under acknowledgment. ROBERT LANSING File No. 837.51/302 The Secretary of the Treasury (McAdoo) to the Secretary of State [Extract] WASHINGTON, March 29, 1918. DEAR MR. SECRETARY: The receipt is acknowledged of your letter of the 26th of March 1918. Before the receipt of this letter and, relying upon a letter from the Third Assistant Secretary of State dated March 23, 1918, an advance was made on the morning of March 27, 1918, to the Cuban Government of $5,000,000 on its demand obligation secured by the pledge of $5,000,000 of the Series A Treasury Bonds of Cuba, authorized by the law of July 31, 1917. The Cuban Minister states that he expects during April 1918 to ask for a further advance of $5,000,000 on account of the credit established earlier in the month in favor of the Cuban Government, and I will be obliged, if, in the meantime, you will inform me whether because of any increase beyond the 'Ante, p. 309. 'Not printed. |