Political Stability, Investments,
and the First Loan Cycle
One of the primary goals of American policy toward Cuba was the maintenance of a stable Cuban Government. Such a government was expected to be friendly to the United States, and to preserve peace and order in the island. One of the principal motives behind this policy was the American investment stake. The Cuban Government was expected to protect this stake by the preservation of order and stability. With such protection, it was believed, American capital would continue to flow to Cuba, and this in turn would help provide an increasing market for American exports. The Commercial Attach` in Cuba, Chester Lloyd Jones, clearly pointed out this economic relationship in 1921 when he wrote:
In the case of Cuba, encouragement of capital investment should be a national policy to the extent by which it tends to strengthen the economic and political basis of the government of the island.
Capital investment should be encouraged when it will through the business connections established help to increase the market for American goods in Cuba.
Capital investment should be encouraged in Cuba to a greater extent than in other foreign countries, because of the political arrangements existing between the two republics and through the proximity of the island to the United States, it is easier to guarantee the protection of the rights of the investors than is the case in other countries. 1