837.61351/4–2848
Memorandum by the Deputy Director of the Office of American Republic Affairs (Woodward) to the Assistant Secretary for Economic Affairs (Thorp)
During the past few days discussions have taken place in Washington with Ambassador Belt and in Habana with the Cuban Foreign Minister1 regarding a decision of the Cuban Cabinet to promulgate a decree authorizing the seizure of the American-owned Tanamo Sugar Mill. This decision was made with a view to settling a dispute between the mill and the cane growers over the interpretation of a contract governing the price of cane.
The Foreign Minister on Friday, April 23, informed Ambassador Norweb that he did not favor government intervention in this instance and that while something would have to be done to resolve the dispute, assurances were given that the intervention decree would not be signed until the interested parties had had an opportunity to resolve their differences. Moreover, Ambassador Belt on Monday, April 26, informed Mr. Walker of CRB that he had spoken by telephone with President Grau that morning and had received assurances that the parties to the dispute would be given an opportunity to settle the controversy. The Ambassador also stated that he had informed the President that he considered reasonable the mill’s position that it would be willing [Page 555] to deposit funds either with a bank or the court to cover any increase in the price of cane which might conceivably be ordered by the court.
Despite the foregoing assurances, the decree was signed and appeared in a special edition of the Official Gazette dated April 26, which was published yesterday. Representatives of the mill state that they have not been afforded an opportunity to confer with the cane growers and that they take a very dim view of this recent development which indicates that the executive branch of the Cuban Government intends to ignore completely the established judicial channels for settling contractual disputes and to take arbitrary action of a drastic nature.
Although the Foreign Minister informed Ambassador Norweb last evening that the decree would be held in suspense and that he would again confer with the President on the matter, the fact remains that the decree has been published and might be invoked at any time. The implementation of this decree would establish a most undesirable and dangerous precedent so far as American interests in Cuba are concerned. I would, therefore, suggest that you telephone Ambassador Belt, who is now in New York, and express to him the Department’s deepest concern over the matter, as well as the hope that the decree will be rescinded. I would further suggest that you may wish to point out to him that it seems most unfortunate that this serious problem has arisen at a time when the Senate Finance Committee has under consideration a bill for the repeal of Section 202(e) of the Sugar Act.
We have been asked by the Senate Finance Committee to express our views on this pending bill, and the general consensus of opinion in the Department prior to the Tanamo development was that we should inform the Committee that we have no objection to the repeal of 202(e), since circumstances under which it might be invoked now appear remote. It might, however, now be difficult for the Department to take such a position, in the light of the Cuban threat to seize the Tanamo mill.
- Rafael P. González Muñoz.↩