SUBJECT

Cuban Rebel Demands of Tribute on United Fruit Company [2]

PARTICIPANTS

Mr. Bump, Vice President, United Fruit Company, Boston

Mr. Baker, Vice President, United Fruit Company, Washington, D.C.

Mr. Raines, Vice President, United Fruit Company, Operations in Cuba

ARA-Mr. Rubottom

CMA-Mr. Leonhardy

Messrs. Bump, Baker and Raines visited Mr. Rubottom this afternoon by previous appointment. Mr. Bump referred to the request the Company had received in Cuba to pay tribute to the rebel movement. Tribute was being assessed on the basis of the Company's sugar production of last year and amounted to approximately $186,000. The rebels indicated that they wanted $10,000 paid immediately so they could buy some mobile equipment in possession of the United Fruit Company. The rebels under Raul Castro demanded that payment be made by October 1.

Mr. Raines who has just come up from Cuba explained briefly the Company's vulnerable situation there. They have lost to the rebels in the past year close to $50,000 worth of equipment and livestock. The people in the area are generally sympathetic with the rebels although they were, he said, a bit perturbed with Castro during the cane burning attempts of last year. He had received indications from these people that if the U.S. were to come out with a strong statement opposing tribute payments, the rebels would rescind their demand. Mr. Bump said the company was considerably concerned over the general lawlessness of some of the Castro elements in the area, communist infiltration into the Movement and lack of control by Fidel over his errant brother, Raul. Mr. Raines described the Cuban Army in the area as being completely ineffectual. He referred to his recent conversation with Ambassador Smith and the Company's hope that the Department or Embassy could come out with some statement in support of the Company's refusal to pay tribute to the rebels which had our Embassy's concurrence. [sic] Mr. Rubottom informed these officials that the Department had received a communication this morning from the Embassy on this subject [3] and that a reply was about to be forwarded in which the Department was suggesting a public announcement by the Embassy of the United States attitude toward forced contributions of this nature. He said that the Department looked upon the Company's problem with sympathetic concern and hoped that the Embassy's announcement would discourage the rebels from requesting tribute. He added, however, that the decision as to whether American companies operating in Cuba would pay tribute under these circumstances must in the final analysis be left to them.

In response to a query from Mr. Rubottom relative to the Company's views on the general unstable political situation, Mr. Raines said he could see no solution in the immediate future as the rebels controlled large areas in Eastern Cuba and the Army appears unwilling or unable to cope with the situation.

After discussing the Cuban matter, Mr. Bump left with Mr. Rubottom copies of pertinent correspondence with the company officials in Cuba relative to the rebels' demands for tribute. These documents included photostatic copies of letters from Raul Castro assessing taxes and his order Number 39 providing for such assessment. There was also amongst these documents a photostatic copy of a handwritten instruction from Fidel authorizing such collections.[4] Mr. Bump asked that Mr. Baker be kept informed of any developments in this matter, and Mr. Leonhardy said he would do so.

Mr. Bump then mentioned certain labor problems the Company was having in Guatemala, and read passages of a letter received from their manager in that country relative to this situation. He left a copy of the letter with Mr. Rubottom who expressed his interest in reviewing it personally. [5]

NOTES:

1. Department of State, Rubottom Files: Lot 60 D 553, Cuba. Confidential. Drafted by Leonhardy.

2. In telegram 303 from Havana, September 22, Smith reported that Raines and another United Fruit Company representative had informed him that day of Raul Castro's demand for tribute. Smith advised them to pay "not one cent of tribute" and recommended that the Embassy issue a statement indicating the U.S. Government's disapproval of any U.S. corporation paying tribute and of any such demands. (Ibid., Central Files, 737.00/9-2258)

3. In telegram 320 from Havana, September 25, Smith noted that he planned to issue a statement on September 29 unless otherwise instructed. (Ibid.)

4. None of these documents has been found.

5. Not found.