British diplomacy from WWII to Revolution

Chris Hull provides some original insights into Britain's post-war commercial interests in Cuba

Summary

Britain's man in Havana during the Second World War battled to defend his country's commercial interests in the island against US intrusion. After the conflict, Britain was keen to regain some of this lost commercial ground. But in the post-war period, British exporters also faced stiff competition from other western countries for new trade opportunities. These countries included Canada, once His Majesty's Government no longer represented her affairs. British diplomats in Havana struggled against a whole host of problems, including an anti-foreign labour movement and the turbulent politics of the island. They were witnesses to Cuba's social stratification and suffered difficulties in running a foreign mission amidst the extremes of opulence and privation. In 1952 the return to power of Fulgencio Batista led to resolution of many outstanding irritants to Anglo-Cuban relations, including the long-delayed nationalisation of the British-owned United Railways of Havana. Cuba's temporary seat on the United Nations Security Council also brought unexpected dividends for Britain, despite the island's entrenched anti-colonial outlook. By mid-1956, however, there were obvious signs that politics in Cuba were undergoing a radical shift. Despite this, however, the British government were loath to reject out of hand any new commercial openings in the island.

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From the point that US military intervention in 1898 ended the second Spanish-Cuban War of Independence and as Washington assumed full responsibility for security in the Caribbean, the pursuit of economic advantage became Britain's principal interest in Cuba. Britain's chief obstacle to economic success, however, throughout the period of Cuba's US-supervised republic from 1902 to 1958, was the preponderance of US interests in the island. An early manifestation of the domination of US over British interests, with the compliance of Cuba's political and economic elites, was the ultimately unsuccessful attempt by Britain to negotiate a commercial treaty with the island in the period from 1902 to 1906.

The First World War weakened Britain's commercial position in Cuba, as it did in most of Latin America. In the inter-war period Britain's main capital investment in the island was the British-owned United Railways of Havana company, serving the western half of the island. British and Canadian insurance companies also did profitable business in Cuba. In the 1930s a prosperous sugar refining industry in Britain depended on imports of cheap Cuban sugar to outstrip foreign competitors. For Cuba meanwhile, Britain represented an important second market for her sugar, the island's mainstay primary product. Britain was also the main market for the island's cigar exports. In 1938, after three years of negotiations, Cuba's Congress finally ratified a commercial treaty between the two countries, securing protection from harmful legislation for British insurance companies.

A reading of British diplomatic correspondence from Havana from the Second World War to the late 1950s reveals a trend of diminishing and finally resurgent returns for UK exporters. New economic opportunities arose but there was more competition for them from outside the United States. Importantly for Britain, no source of antagonism cropped up in the island to threaten Anglo-American harmony during the post-war years, an enduring concern for Britain's contacts with the island both before and following the period under study here.

Diplomatic reports sent from Cuba during the 1940s and 1950s detail strong denunciation of the venal nature of Cuba's politics and its politicians. British estimations of Fulgencio Batista, however, who returned to the political scene in 1952, were comparatively positive. During his final period of rule the general resolved several outstanding impediments to harmonious Anglo-Cuban relations, attracting the approbation of British diplomats. By 1958, the two countries were enjoying the mutual benefits of a growing economic relationship.

The Second World War

Before the war the United Kingdom maintained a distant but strong second position to the United States in terms of imports from the island, mainly due to her large purchases of Cuban sugar. With regard to exports, she held a much weaker second position, and was closely followed by European competitors such as Germany and Spain (Barnett and Bunbury 1937). By 1945 the United States had strengthened its dominance even further at British exporters' expense. Lend Lease scarcities and shipping disruption during the war caused Britain to lose nearly all of its visible exports, such as textiles, hardware, coal, whiskey and pharmaceutical products.

Tobacco, the island's second product, had suffered a Treasury restriction early in the war. Being a luxury item and not an essential staple, Britain prohibited imports of Cuban tobacco in January 1940 in order to conserve valuable dollar exchange. Despite the prodigious consumption of Prime Minister Winston Churchill - a walking advertisement for the world's finest cigars - this measure hit Cuba's second industry hard, as Britain had for decades represented the island's largest market for rolled tobacco.

In 1944 Britain's assets on the island consisted of the United Railways of Havana, three Canadian banks, Canadian and UK insurance interests, the Shell-Mex Oil Company, plus a number of other smaller businesses. Due in part to the nationalistic nature of Cuban Labour Law, the British 'colony' in the island - of whom about 40 per cent were Canadians - was steadily diminishing. Britain's prime responsibility was the large number of British West Indian seasonal workers, whose ill-treatment on sugar plantations and at the hands of rural guards had been a thorn in the side of harmonious Anglo-Cuban relations for much of the 1920s and 1930s.

His Majesty's man in Havana during most of the Second World War was Sir George Ogilvie-Forbes, a Scottish veteran of the First World War. In response to a continent-wide communication from the Foreign Office in 1943, the British minister in the island considered that there was no possibility of his country acting as an 'honest broker' between the United States and Cuba after the war, given US dominance there. He warned that the British might be played off against the Americans while the choice was limited to Fulgencio Batista or the alternative of chaos. The colonel had stepped out of uniform in 1940 to contest and triumph in presidential elections. With an eye to the war's end, and with an impressive prescience of sixteen years, the minister wrote:

He was in general pessimistic about the British position in Cuba, and made a point of denunciating the island's politics. In his 1940 annual report, Ogilvie-Forbes had written: "Conditions in this country will never be properly understood unless it is realised that Cuba is governed by a set of professional politicians whose sole aim and object are their own financial betterment.' He continued: 'The Government of the country is controlled by politicians, 90 per cent of whom are completely ignorant of the duties entrusted to them, and who have attained their positions by questionable means" (Ogilvie-Forbes 1941).

In 1943 Robin Humphreys, seconded from the Royal Institute of International Affairs to the Foreign Office during the war, viewed a country that since independence had not yet found "a stable balance between chaos and dictatorship in its internal affairs, which continued to be characterised by maladministration, corruption, extravagance and violent political feuds" (Humphreys, 1943). All these facets of Cuban political life would come to be described by Britain's four men in Havana in the 1940s and 1950s.

Cuba after the war

An important development for Anglo-Cuban relations in May 1945 was the separation of Canadian from British interests with the appointment of Canada's first minister to Cuba. On the one hand this was seen as potentially beneficial, given that many of the invisible earnings accrued by Canadian banks and insurance interests had been denoted as British interests. Negatively, however, among the other Western countries represented in Cuba, Canada soon came to represent Britain's biggest competitor after the United States in a whole range of products, competing directly with, and often outstripping, the United Kingdom. Positively, Britain had a newfound diplomatic ally in Havana, one occupying a similarly awkward triangular position vis-à-vis Washington i.e. mindful of troubled historical antecedents and weightier interests, but endeavouring to gain commercial advantage in the island.

There was restrained optimism in the British legation on the election of Ramón Grau San Martín to the presidency in 1944, just short of eleven years after his brief tenure from September 1933 to January 1934. Caution was justified, not least on account of the return of a virulent nationalism for which Grau had been known during his earlier leadership. British Minister James Dodds came to describe disillusionment and rampant corruption under his rule. By the end of Grau's presidency he could report that the country had 'relapsed into the condition of moral stagnation which appears to be the normal state of public life' (Dodds 1948).

In the light of its own compromised post-war economy and sterling problems, Britain's main ambition in Cuba was to make inroads into its dollar-rich market. The island continued to enjoy enduring prosperity due to prolonged demand and high prices for its principal commodity, sugar. British diplomats endeavoured to find a weapon with which to protect their railway and insurance interests, under constant threat of anti-foreign treatment and legislation. In their view, Cuba had for decades taken Britain for granted as its second best market for sugar. But it was difficult to gain any satisfactory outcome while the island's politicians were engaged in constant internal squabbles, looking to line their own pockets, and continuing to prioritise their country's relationship with the United States over any other.

"An equable climate and a warming sun"

Betty Holman, wife of Britain's new minister to Cuba in 1949, sent regular correspondence to a friend in Britain, giving us a rare female insight into life on the island and the domestic problems of running a diplomatic mission in the tropics. She was the daughter of a Liverpool sugar broker who had headed the Sugar Commission (responsible for coordination of sugar purchases and allocation between Europe and North America) after the First World War, when it visited both the United States and Cuba. Mentioning her background to the Cuban chief of protocol on their arrival gave the Holmans "the most wonderful entrée to all the sugar barons". However, their invitation to parties adorned with thousands of dollars worth of flowers and where paté de fois gras and caviar were flown in from the United States was to be contrasted with their own meagre Foreign Office allowance, which had not risen to take into account sterling's devaluation against the dollar. Such extravagance also stood out in comparison to their sprawling and dilapidated residence, a house formerly used as a brothel and located opposite the Biltmore Yacht and Country Club (see B Holman 1998: 142-45).

Betty Holman wrote that they suffered "the most awful servant troubles". A cook, for example, refused to share the servants' food allowance with colleagues, including a gardener with two famished children. With their own house falling down around them the Holmans sold their duty-free whisky and gin allowance to other diplomats to make ends meet, while being entertained by such luminaries as Mr du Pont at his Varadero estate, employing 200 gardeners and workmen. As opposed to du Pont's private 18-hole golf course, the diplomat and his wife played alone at their neighbouring Country Club course for fear of losing a round against friends and being unable to afford their clubhouse drinks. When His Majesty's Inspectors did eventually arrive they more than doubled their allowance from £3000 to £7000. At least then they could afford to entertain such friends as Ernest and Mary Hemingway, and an old acquaintance from diplomatic service in Paris - the Duke of Windsor (B Holman 1998: 147-51; 183).

Political graft and corruption continued under second Auténtico President Carlos Prío Socarrás, while 'gangsterism' produced another twenty political murders in 1949. By the following year Adrian Holman was writing of Prío's "spectacular canter" having slowed down to a "dull trot". He had lost initiative and his prestige and popularity had suffered. But still, he had managed to steer a "devious political course" through the year, holding the main body of his party together and keeping his opponents divided. Such, it seemed, was the archetypal Cuban politician of the period; poor at or reluctant to manage the affairs of the country, but adept at out-manoeuvring and appeasing his opponents and the US ambassador by the slimmest of margins. Corruption continued unabated, the shining example of immorality occurring in July during the court trial of former President Grau for his alleged embezzlement of $174 million, when all the prosecutor's documents were stolen from the courtroom (A Holman 1951).

The behaviour of Cuban labour and the manner in which successive governments cowed to their pressure aroused much comment from the British legation, especially because of its effects on the affairs of United Railways. From 1932 to 1942 the company had suffered continuing deficits on its current earnings. Increased demand for Cuban sugar during the war and hence additional freight traffic, combined with shortages of petrol and tyres to the detriment of road competition, stimulated a brief period of renewed prosperity for the railways. But by 1946 the Cuban government owed $2.5m to the company, and, with roads being driven through its property without compensation, the debt continued to increase. Buffeted by a combination of falling income, high wages and resurgent road competition, United Railways announced its intention of cutting expenses by dismissing staff and reducing wages. The government responded by assigning an 'interventor' to manage the company's affairs, which only resulted in increasing its debt by a further $2.8m, and an even more urgent search to sell and be rid of its interminable troubles.

Despite repeated warnings from His Majesty's men on the spot following the Second World War, a serious decline in world demand and prices for sugar did not materialise. The Korean War from 1950 actually increased prosperity on the island, leading to lavish expenditure on a scale that Adrian Holman compared to the 'Dance of the Millions' extravagance in the early 1920s. A rare success for a British exporter was realised in 1950 when Leyland Motors signed a $10m contract to supply 620 buses to the island, up to that time Britain's single largest dollar export deal. A British official from the Export Credits Guarantee Department visited Cuba in 1951 to renegotiate the overdue payment for the buses. He described the scene he found:

His droll description of the island during the Auténtico years is replete with both British condescension and derision of the island's political class, spiced with a tinge of anti-Americanism.

Batista's return to power

Batista's unexpected and unconstitutional return to power in 1952 came as a shock to Cubans and diplomats alike. Britain's ambassador along with his neighbour, the Canadian ambassador, ventured by car to the centre of Havana to get a firsthand view of the aftermath of the practically "bloodless revolution". With Cubans considering their country a "leader of progress and democracy" in the region, Holman (1952) wrote, the coup d'état "struck a rude blow at their amour-propre". The general's return to power prompted the retired former British minister in Havana, James Dodds (1944-49), to write to his old department: "I am most interested to see in today's press that Batista has done it again in Cuba. I was always attracted by Batista and it was possible to do business with him, which one could hardly say of either of his successors" (Dodds 1952).

This positive view of Batista's leadership qualities was indeed replicated by Dodds' successor. But Holman was critical of the general's ambivalent position, of having achieved power as a dictator and then behaving like a democrat. The general had difficulties imposing his will and fell - as Holman saw it - between these two stools (A Holman 1952). As US academic Jorge Domínguez has asserted, Batista was "an inefficient dictator", criticised by some of his supporters for not being "harsh enough" (Domínguez 1998: 127).

Despite his shortcomings, however, the ambassador generally viewed Batista in a favourable light, describing him as "a real man and born leader and a cut above ex-President Prío with his gang of predatory relations and hangers-on". Seven months ahead of the general's second general election victory (fourteen years after his first electoral triumph in 1940), Holman wrote: "I know him well and like him and I am sure that he would be a happier man and a better leader as a constitutional President. If I were a Cuban, I would vote for him without the slightest hesitation" (A Holman 1954). In the event, the main opposition party under ex-president Ramón Grau San Martín withdrew shortly ahead of the November 1954 elections, denying Batista the legitimacy he so craved. Indeed, political legitimacy proved elusive for the general throughout the 1952 to 1958 period.

British diplomats also viewed Batista positively because in his final incarnation as military dictator of Cuba he managed to resolve several important bones of contention in Anglo-Cuban relations. Unlike his predecessors, he got things done, and unlike British views on his political contemporaries, they had little reason to dislike him. In 1953 the end of the tunnel for United Railways was finally reached, with subsequent relief in the Foreign Office that this tiresome and prolonged irritant to Anglo-Cuban relations had at last been exorcised. Britain's main capital interest in Cuba had ceased to be profitable for most of the previous two decades, becoming instead a target for nationalist sentiment and labour agitation in the island. Formerly a source of prestige (and dividends for investors), United Railways had long since become a burden for Britain's men in Havana. After stalling for four years the Cuban government finally signed a preliminary agreement for the purchase of the railways for $13m cash.

As part of the process to end post-war rationing Britain made a special bulk purchase of one million tons of Cuban sugar in the same year, proving satisfactory to both parties; the price obtained was very advantageous to Britain, and Cuba was able to dispose of her entire yearly crop along with the surplus left unsold from the previous year. Britain had also re-opened her market to Cuban cigars a year earlier, to the obvious benefit of the island's second industry. A new period of harmony and reciprocal deals was proving economically beneficial to both countries.

In the late 1940s and beyond Cuba's temporary seat on the United Nations Security Council brought unexpected dividends for Britain. Support - or at least Cuba's restraint from opposition - in the United Nations, bolstered Britain's standing during a period of decline for the country, its empire and its prestige. Cuba served as an elected 'non-permanent member' of the UN Security Council from January 1949 to December 1950, and again from January 1956 to December 1957. In struggling to maintain a balance of power in the Middle East that protected British interests, support for London at the United Nations was seen as crucial. For this Britain coveted the Cuban government's support in crucial ballots, such as those concerning Cyprus and Suez. Due to Cuba's former centuries-long status as a Spanish colony and henceforward as a pseudo US protectorate, the British were wary of Cuban sensitivities over such colonial issues. As Holman put it, this was hardly surprising given that the island had only "just completed some fifty summers of independence and has barely overcome her own initial birth pains" (A Holman 1954).

But according to Britain's first secretary in Havana, Cuba's delegates at the United Nations could usually be relied on either to support or refrain from embarrassing Britain (Oliver 1956a). Britain lobbied the Cubans both in Havana and New York. On the issue of Cyprus the Cuban delegation moved from opposition to abstention and then - possibly because of US pressure - to support the British view. The Cuban government's helpful attitude was appreciated, replicated in the following year by Cuba's support for Britain in a Security Council debate over Yemen. During the epochal Suez Crisis, the biggest British foreign policy failure since the Second World War, Cuba was the only Latin American country not to oppose Britain in UN voting.

Batista's government, on the other hand, was taken aback that Britain should take such a strong line over the case of a British sailor who was shot and partially paralysed following a brawl in a Cuban bar. Delays in the case coming to court and the victim receiving compensation led to questions and even a debate in the House of Commons from 1956 onwards. A letter from the UK deputy representative in New York reported a meeting with his Cuban counterpart relating Havana's frustrations after they had "staunchly supported" Britain at the United Nations (Crosthwaite 1957). Batista's government viewed London's protestations over the case as unreasonably strong, but it was not a problem that went away. The Topham case was a persistent fly in the ointment for Anglo-Cuban relations, only resolved by a compensation payment in 1964.

For all the apparent gains for British trade with Cuba in the 1950s, positive benefits had to be measured against the impingement of competing western nations in Cuba's prosperous dollar-rich market. The fact that much of the competition in this decade came from recently defeated or occupied nations, made Britain's own lack of export penetration all the more galling. In 1954 Germany and France agreed sugar barter deals with the Cuban government. A Canadian firm, with no purchase of sugar, gained a contract for rails that British companies had hoped to win. An economic and commercial overview of Cuba in the same year reported mixed fortunes for British companies. Insurance firms continued to do well, despite the frequent occurrence of major and minor cyclones. But Japanese exporters offered goods at "very low prices" and Germans employed "painstaking attention to Cuban market requirements and aggressive salesmanship". Such minor items as chamois leathers, stout beer and linen were rare examples of British domination in Cuba's market (Stephens 1954). Britain did better in 1956, for example, by more than doubling its exports, selling Viscount aircraft to Cubana de Aviación and ships to the Cuban navy. But again, the threat of increased competition from Germany, Holland and Japan was a serious concern.

Granma and beyond

British Chargé d'Affaires Peter Oliver would prove justified in writing in May 1956 that "it would be rash to attempt to forecast what is likely to happen over the next two years" (Oliver 1956b). The arrest of twenty Cuban émigrés (including Fidel Castro) in Mexico City a month later, alleged to be plotting an assassination attempt against Batista, ruffled few feathers in the Foreign Office. An official in London played down the event's significance, commenting: "We have no information about any of the participants, who I suspect are just a bunch of rogues with too little to do" (Thomas 1956).

In the following month the British government was rocked by Gamal Abdel Nasser's nationalisation of Egypt's Suez Canal on 26 July 1956, three years to the day after Fidel Castro had revived Cuba's revolutionary tradition when rebels under his command mounted an unsuccessful attack on the Moncada barracks in Santiago de Cuba. Events in Egypt were almost a dress rehearsal for the US-supported invasion debacle at the Bay of Pigs five years later. Ignominy at Suez dealt a huge blow to Britain's international standing, as did the events in April 1961 to the prestige of JF Kennedy's administration.

Britain's foreign policy failure at Suez led to the physical breakdown of Prime Minister Anthony Eden and his enforced rehabilitation on the island of Jamaica. Part-time resident Noël Coward, the playwright and composer, later to play a starring role in the film version of Graham Greene's Our Man in Havana, felt the winds of change in Cuba's island neighbour. In the wake of the Suez crisis and Eden's arrival in Jamaica, he wrote a week before the Granma landing: "Apparent peace broods over the 'paradise of the Caribbean', but alas it is only apparent, for lurking behind the quiet trees and scampering through the banana plantations are rumours, tensions and wild surmises" (Coward 1956: 337-38).

Within weeks of assuming his new post as British ambassador to Cuba in November 1956, Stanley Fordham reported on the fresh revolutionary outbreak in the island's eastern city. An uprising in Santiago de Cuba that had been planned to coincide with the Granma landing had occurred two days too early, with the boat lost and delayed in stormy seas. Fordham described the events to London as 'the next episode, in what seems to have been a very amateur revolution' (Fordham 1956).

In early 1957 the British embassy in Havana described Cuba's "salient features":

Washington's support for Batista would not be undiluted, however, despite enormous US investments in the island. Dwight Eisenhower's administration imposed a ban on arms exports to his dictatorship in March 1958, further diminishing the legitimacy of Batista's rule. British diplomatic estimations of the two-year civil strife in Cuba from the end of 1956 would prove to be somewhat wide of the mark, evidenced by sales of British fighter aircraft and military tanks to Batista in the months leading up to the implosion of his rule at the very end of 1958. Britain was keen to pursue almost any commercial opening, including the conclusion of this lucrative but risky dollar-earning opportunity once Washington's acquiescence had been gained. A £10m contract for the construction of port facilities at Mariel, west of Havana, was also completed, and an order for two Bristol Britannia airliners from the previous year was doubled. Given Batista's support for Britain in the United Nations, his regime expressed its disappointment when Harold Macmillan's Conservative government restricted its arms sales to the dictator just two weeks before his demise (Hull 2007: 597-601).

Conclusion

During the Second World War, British exporters suffered declining fortunes in Cuba. Under Batista's final period of rule they did well. A series of agreements and export deals from 1952 onwards worked to the mutual satisfaction of both governments. Washington's embargo on arms sales to Cuba in early 1958 forced the dictator to look elsewhere for supplies. Britain was happy to satisfy his requirements, and enjoyed the benefits of other lucrative deals. Economic space left vacant by the US government was readily filled by British companies eager for new business.

How galling for UK exporters, then - once US economic interests withdrew or were expropriated in the wake of the Castro-led triumph on 1 January 1959 - that a US-imposed trade blockade and the closeness of Anglo-American relations should hinder their natural inclination to pursue new trade opportunities in Cuba. The wider and weightier interests of the Anglo-American relationship impeded Britain's exploitation of the opening. During the period studied here there had been little menace to relations between London and Washington over Cuba. But attempts by British companies post-Revolution to conclude new business in the United States' island neighbour would threaten harmony between the transatlantic allies.

Chris Hull recently completed his PhD thesis on 'Anglo-Cuban Relations and the US Dimension, 1898 to 1964' at the Department of Spanish, Portuguese and Latin American Studies, University of Nottingham, UK. Email asxch@nottingham.ac.uk