SUBJECT

Sabotage of American Properties and Threats and Rebel Demands for Tribute from American Companies and Sabotage against their properties

Mr. Leonhardy expressed to Mr. Betancourt the serious concern of the Department over the demands for tax payments which the Castro movement has made of American Sugar Companies operating in eastern Cuba and recent acts of sabotage, looting and killing carried out by Castro elements on the premises of American companies in that area including Nicaro. He mentioned in particular the incidents which occurred at the Chaparra sugar mill of the Cuban-American Sugar Company and at Nicaro. He warned Mr. Betancourt that such activities could have devastating effects on American public opinion toward the rebel movement which could be even more harmful to their cause than the effects of the kidnappings in July. He also mentioned that continued depredations on Nicaro could force the closing of the plant which would result in the dismissal of nearly 3,000 workers who could easily react against the Castro movement as a result. Mr. Leonhardy pointed to the efforts the Department had gone to in order to remain impartial in the present Cuban conflict and that it was our hope that after the reverberations which followed the kidnappings that the Castro movement would refrain from singling out Americans and American property for molestation and destruction. He showed Mr. Betancourt copies of Raul Castro's Order No. 39 [2] prescribing the collection of taxes from sugar companies in Cuba as well as other pertinent documents in the case.

Mr. Betancourt said that he was disturbed by this news and that subsequent to Mr. Leonhardy's telephone call to him of last Friday [3] about the rebel demand for tribute he had passed his concern on to the Castro leaders in Miami and said he would again reiterate his feelings to them. He then launched into an extensive apology for the actions of the Castro movement and said that while he could not defend its every act, the U.S. must realize that it controls vast areas of eastern Cuba and, in order to exist, must levy taxes on an indiscriminate basis as between Cuba and foreign firms. He believed that the individual American companies must realize this and certainly should be able to arrange some modus vivendi with the controlling rebel elements.

With respect to sabotage and loss of lives, Mr. Betancourt said he had no indication that American companies were being singled out for this purpose. The killing at Nicaro yesterday he explained could have been a matter of personal vengeance or a case of a "chivato" (informer). In response to a query from Mr. Leonhardy as to how the local commander could allow his men to take justice in their own hands while preaching against the atrocities of Batista, Mr. Betancourt explained that Fidel actually frowned on these actions and had had his own men shot for murder of this kind. However, the U.S. must remember, he said, that the Castro movement is not doctrinaire and encompasses people of all walks of society and convictions and certainly amongst them there are extreme nationalists and anti-U.S. elements.

Mr. Betancourt said that he considered he had failed in his efforts to bring about friendlier relations between the Castro movement and the U.S. Government. He said he recognized the difficulties raised by international law because of our recognition of the Batista Government but that we must understand sooner or later that the Castro Movement is the dominant force in the revolutionary opposition, that it will eventually prevail in Cuba and that the Cuban revolution will establish a pattern for revolutions in other countries of the hemisphere which have dictatorial governments. He said that within the Movement there is a distinct feeling that it is frowned upon by the Department of State, that the U.S. Government is hopeful that other revolutionary opposition groups will hold the balance of power in a new Government in Cuba and direct the fortunes of the revolutionary government. He emphasized the latter point by stating that we have spurned Dr. Urrutia who will without a doubt be the provisional president of Cuba while at the same time we have coddled such oppositionists as Dr. de Varona. He said that he thought the U.S. ought to make more effort to cultivate Dr. Urrutia who could be of immense assistance during these trying times as he has Castro's confidence. If for instance we were to discuss our present problems with Dr. Urrutia instead of with him (Mr. Betancourt), he felt we would have a much better chance of success. He described Dr. Urrutia in glowing terms and said that he would not be a lackey of Castro's but would conduct a respectable provisional government which would lead Cuba back to democracy.

Several times during the conversation when Mr. Betancourt referred to the respectability and democratic base of the Castro Movement, Mr. Leonhardy reminded him of the anti-American literature circulated by the Movement, the general lawlessness of many of the rebel elements associated with Castro including the kidnappings of last June and July, and the numerous dictatorial pronouncements made by Fidel such as his famous December 14 manifesto of last year. [4] He implied that if Castro is desirous of inspiring U.S. and free world public confidence in his Movement these actions would appear to be counterproductive. Mr. Betancourt attributed many of these acts to the open hostility exhibited by the U.S. Government toward the Castro Movement and particularly by our Ambassador in Habana who constantly refers to the rebels as "bandits".

NOTES:

1. Source: Department of State, Central Files, 737.00/9-3058. Confidential. Drafted and initialed by Leonhardy.

2. See footnote 4, Document 137.

3. September 26. No record of this telephone conversation has been found.

4. See footnote 4, Document 46