298 FOREIGN RELATIONS, 1942, VOLUME VI

analysis and report on this underlying situation has not been made.
Therefore, it would seem logical for a meticulous study of all the
facts to be concluded first so that, based thereon, the best possible solu-
tions could be explored and then adopted.

(2) President Batista’s statement that the present is the most
propitious time for the enactment of this legislation is perhaps exact
from the viewpoint that the financial and economic problems which
will arise during the next few years will be so difficult as to require
the best of talent and the most solid banking, credit and monetary
structures for their proper solution. I am not convinced, however,
that the present period, when the entire world is in a state of flux
and uncertainty and so many unknown factors are appearing daily, is
propitious for the inauguration of a new banking and monetary
system. On the contrary, it might be preferable during the next
few years to continue with the existing media rather than to attempt
to change systems in midstream.

(3) Unless consummated with “superior skill”, the elimination of
the dollar as legal tender and the creation of the stabilization fund
might complicate the Cuban financial structure and prejudice trade
with the United States. Simplification in these matters would seem
preferable rather than the enactment of measures which will probably
involve the establishment of an exchange control, thus adding this
country to the long list of those which now have the freedom of their
international trade hampered by such measures. Finally, this would
appear to be another step away from the ideal of, if not a common
_ currency for the entire Hemisphere, at least complete stability of
currencies between the American republics.

While the Prime Minister, in a conversation with me, stated that
it was intended to tie the peso irrevocably to the dollar, it would not
appear from the draft law that this has been accomplished. Pending
the development of more definite plans to reach this very desirable
end, it might be preferable to carry on under the existing media which
at least in this particular have worked reasonably well until now. In
fact, the outstanding weakness which appears to exist in Cuban cur-
rency is the extraction therefrom of large seigniorage profits during
the last several years. In any case, to force such a momentous change
within a 180-day period or less does seem precipitous.

(4) President Batista’s message to Congress points out that the
draft legislation is largely based on the report of the White Mission.
Therefore, if, in the future, difficulties are encountered, irrespective
of what may be their cause, the United States Government will in all
probability be blamed.

(5) That Government should control banking and currency is a
sound postulate providing it can furnish competent and honest man-