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\t/ i bl« J « i > elles • '.les: : rrency* 2 . | . . ! Ot only to but also to • . .. Governor <re ; August 12, 195b Governor Eccles Cuban currency Mr* Coldenweiser We have examined the revised "Project to Estal ish a Cuban Moneta Systea and to Stabilise Cuban tourmmf* which was transmitted by Mr. Stunner Welles, Assistant Secretary of State* The currency plan proposed for Cuba by Mr* Scnwuist appears to be similar to the plan that has been anopted and Is in operation successfully In Ireland. A hurried examination does not disclose any dangers In the proposal, as the plan seems to provide adequate safeguards against over-expansion of currency. The new currency notes can be issued only through the Currency Coaniasion. The Cownlssion, itself, can Issue them only in exchange fox (1) Cuban silver coin or silver certificates outstanding, or (2) United States currency and d«~ posits* The power of the Currency Cora&iasion to issue currency notes in exchange for Cuban silver coin and silver certificates is not explicitly stated, thous^i it is clearly implied in Article 2 which deals with legal tender. Nothing is said about this power In Article 4 which deals with tne powers and duties of the Coamiasion. Article 4 covers only the poner to exchange curr notes for Aaerican funds and to withdrawftrosjcirculation currency notes received in the process of exchange. It would seem aovisable either bo state specifically In Article < the Currency Com iasion Is empowered to issue currency notes In I iff for Cuban silver pesos or silver certificates, or better yet to bring together in Artielt 4, which io headed "Powers and Lvti.es of the Coaraiasion,11 all the major powers of tne Cornraission* Article 5, which deals with required reserves, and Article J, wi. with the disposition off surplus reserves^ appeal, when c ^e perhaps unnecessarily complicated. Different sets of figures are which do not re ovetail, and it is dii to ge* II I full bearing of provisions without rather close studyj but it m»j be that this l» the best way to deal with a somewhat complicated situation. 1 ADDRESS OFFICIAL CC MUNICATIONS TO THE SECRETARY OF STATE WASHINGTON, D. C. DEPARTMENT OF STATE WASHINGTON August 20, 1935 In reply refer to LA My dear Mr. Eccles: In the absence of Mr. Welles, who has left for Europe on a long deferred vacation, I wish to acknowledge your letter enclosing a copy of Mr. Goldenweiser1s memorandum commenting on the project to establish a new Cuban monetary system. I have forwarded a copy of Mr. Groldenweiser1 s memorandum to Mr. Schwulst of the ' 1 -. Reconstruction Finance Corporation, who drew up the project under consideration. I believe that Mr. Welles stated in a previous letter that Mr. Schwulst has now returned from Cuba and would be pleased to confer with officers of the Federal Reserve Board concerning the project. Sincerely yours, The Honorable Marriner S. Eccles, Governor of the Federal Reserve Board, Washington, D. C. fc'1
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