837.516/887
     The Secretary of State to the Ambassador in Cuba (Braden)

No. 499                            WASHINGTON, August 15, 1942.
  SIR: Reference is made to your despatch No. 513, dated July 20,
1942, concerning the establishment of a central bank and stabilization
fund in Cuba.
  As you are aware the Cuban Government has long been interested
in terminating the dependence of Cuba on dollar currency and in
establishing in Cuba an independent monetary system and appropriate
institutions for the control of money and credit. The Department has
recognized not only the need for such institutions in Cuba but also
that the wishes of the Cuban Government with respect to these matters
represented the legitimate aspirations of an independent country. In
response to the request of the Cuban Government, the Department was
accordingly glad to use its good offices in obtaining for Cuba the serv-
ices of highly competent experts of the Treasury Department and the
Federal Reserve System to study Cuba's monetary and credit needs
and to make appropriate recommendations to the Cuban Government.
  The report of the American Technical Mission to Cuba has been
carefully studied in the Department and the Department was given
an opportunity to express its views to the members of the Technical
Mission before the report was submitted in final form to the Cuban
Government. As the Embassy knows the report was transmitted
through this Department to the Cuban Government and presumably
therefore had the general approval of the Department.
  The basic policy of this Government toward the establishment of
the Cuban central bank and stabilization fund has thus already been
determined; namely, to assist Cuba in every appropriate way, particu-
larly by the providing of technical advice and assistance. It would
not be in accordance with the fundamental policies of the Department
with respect to Cuba and to the other American republics in general
to attempt to delay the establishment of the Cuban central bank and
stabilization fund merely because of the possibility that such institu-
tions, however well designed, might not be properly managed. Were
this not the case it should be apparent that the Department would have
long since advanced its objections rather than wait to make such objec-
tions until a technical mission composed of officials of other agencies
of this Government had submitted their report through the Depart-
ment to the Cuban Government and that Government had prepared
draft legislation on the basis of the recommendations contained
therein.
  It is the view of the Department that the appropriate course for
the Embassy to follow with respect to the legislation under reference



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