[News] The Cuban Nationalization of US Property in 1960: the Historical and Global Context

[Anti-Imperialist News]

https://www.counterpunch.org/2019/03/29/the-cuban-nationalization-of-us-property-in-1960-the-historical-and-global-context/ 



  The Cuban Nationalization of US Property in 1960: the Historical and
  Global Context

by Charles McKelvey 
<https://www.counterpunch.org/author/charles-mckelvey/> - March 29, 2019
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/*(Keep in mind - the US still illegally occupies a base in Guantanamo, 
Cuba - site of a US prison/torture center*//*and a constant reminder of 
US imperialism in the Caribbean - ed) */

In moving toward at least partial implementation of Title III of the 
1996 Helms-Burton Act, the Trump administration has resurrected the 
issue of Cuban nationalization of U.S. properties in Cuba in 1960.

The conflict between the United States and Cuba over the nationalized 
U.S. properties is a particular case in a historic and still unfolding 
global conflict between the global powers and the Third World.  The 
conflict became manifest in 1955, when leaders of twenty-three newly 
independent Asian and African nations met in Bandung, Indonesia.  They 
sought to restructure the global economic patterns established during 
European colonial domination, and to this end, they advocated unity and 
economic cooperation among the newly independent nations, among other 
strategies.

The leaders of the emerging Third World project met in 1961 in Belgrade, 
Yugoslavia, where they founded the Non-Aligned Movement. Among the 
founders were the giants of the era: Tito, Sukarno, Nasser, Zhou En-lai, 
Nkrumah, and Ben Youssef.  Cuba was among the founders, represented by 
the President of the Revolutionary Government, Osvaldo 
Dorticós. Revolutionary Cuba and Latin American movements, reflecting on 
their historical semi-colonial and contemporary neocolonial situation, 
were forging a perspective similar to the newly independent nations of 
Africa and Asia.

The Non-Aligned Movement drew from the principals of the UN Charter, 
including the “equal rights and self-determination of peoples” and “the 
sovereign equality of all” nations.  And the Third Word project took 
seriously the Charter declaration that “the United Nations shall promote 
higher standards of living . . . and conditions of economic and social 
progress and development.”

At the same time, the Third World project discerned the need to 
formulate principles from the perspective of the neocolonized peoples, 
and accordingly, it developed a proposal for an alternative world-system 
not built on a colonial foundation.  The “Declaration on the 
Establishment of a New International Economic Order,” adopted by the UN 
General Assembly on May 1, 1974, expressed twenty principles on which 
the new international economic order should be founded.

The principles affirmed by the “New International Economic Order” 
included the right of states to nationalize properties, necessary for 
newly independent nations, if they are to exercise sovereignty over 
their natural resources and to promote economic and social development.  
The document further maintained that no nation should be subjected to 
coercion in order to prevent it from exercising this right.

The political, economic, and social situation in Cuba in 1959 demanded 
that the Revolutionary Government exercise its right to nationalize.  
More than half of agricultural land was in foreign hands, and 
eighty-five percent of peasants worked land they did not own. Agrarian 
Reform had been an article of the 1940 Cuban Constitution, but it was 
not implemented by subsequent governments.  In his October 16, 1953 
self-defense, known as “History Will Absolve Me,” Fidel Castro revealed 
a revolutionary program that included an initial redistribution of land 
to tenant farmers and sharecroppers, with compensation to the owners; 
and a subsequent agrarian reform law, based on further study. On October 
10, 1958, the Rebel Army in the /Sierra Maestra/emitted a law giving 
ownership to small peasants of the land on which they worked.  When the 
Revolution came to power, the revolutionary leadership considered 
agrarian reform an essential economic measure, necessary for the social 
and economic development of the nation; and it found overwhelming 
support for it among the people.

The Agrarian Reform Law was emitted by the Revolutionary Government on 
May 17, 1959.  The Law set the maximum quantity of land per proprietor 
at 406 hectares.  It recognized the constitutional right of the 
proprietors to compensation, and it put the value of the compensation at 
what owners had declared in tax reports.  It established payment in the 
form of “Agrarian Reform Bonds,” which were to accumulate at an annual 
interest of no more than 4.5%, and they would be redeemable in twenty years.

The Agrarian Reform Law struck at the heart of the economic relation 
between Cuba and the United States, and it defined the anti-neocolonial 
character of the Revolution.  The U.S. government immediately launched 
an ideological campaign against the Cuban Revolutionary Government, 
invoking the phantom of communism.  On March 17, 1960, the Eisenhower 
Administrated initiated the planning of a U.S.-backed military invasion 
carried out by Cuban counterrevolutionaries based in Miami.  On July 2, 
1960, the U.S. Congress authorized the President to amend the U.S.-Cuba 
sugar quota; and on July 6, President Dwight Eisenhower reduced the U.S. 
sugar purchase to 23% below the quota, seeking to provoke economic 
difficulties in Cuba.  Following the failure of the Bay of Pigs invasion 
of April 17, 1961, the U.S. government turned to an embargo on trade 
with Cuba and to support of terrorist activities on the island, 
supporting counterrevolutionary terrorist organizations based in Miami.  
The goal of U.S. policy was what we today call regime change, seeking to 
reestablish a government subordinate to U.S. interests, in accordance 
with the requirements of the neocolonial world order.

The Cuban Revolution did not want conflict with the United States; it 
wanted cooperation on a foundation of respect for its sovereignty. The 
Cuban perspective is evident in Law 851, emitted by the Revolutionary 
Government on July 6, 1960. The Law authorized the President and the 
Prime Minister of Cuba to nationalize U.S. properties by means of a 
Joint Resolution.  It established compensation for the nationalized 
properties through government bonds at 2% annual interest, with payment 
to begin in a period of no less than thirty years.  The Law mandated the 
National Bank of Cuba to create a fund that would be fed by Cuban 
government deposits in an amount equal to 25% of the value of the U.S. 
purchase of Cuban sugar in excess of the sugar quota.  The Law, 
therefore, proposed a mutually beneficial resolution, linking 
compensation for nationalized properties to the U.S.-Cuban sugar 
trade. By means of a higher U.S. sugar purchase and Cuban use of the 
additional income to finance compensation and invest in industrial 
development, Law 851 pointed to the transformation of core-peripheral 
exploitation into North-South cooperation.  The Cuban proposal, however, 
was rendered impractical by the simultaneous reduction of U.S. purchases 
below the sugar quota (announced on the same day, July 6), and by its 
subsequent policy of regime change.  Nevertheless, thirty days later, in 
the announcement of Joint Resolution #1, Fidel appears to remain hopeful 
that the U.S. government will accept the proposal of compensation 
through U.S. purchase above the sugar quota.

Joint Resolution #1 was announced on August 6, 1960. The Resolution 
declared the compulsory purchase of twenty-six U.S. companies, including 
twenty-one sugar companies.  The Resolution explained the historical 
context and the necessity of the expropriation of U.S. owned sugar 
lands, noting that “the Sugar Companies seized the best lands of our 
country” in the first decades of the twentieth century, during an 
invasion of “insatiable and unscrupulous” foreign capitalists, who “have 
recuperated many times the value of what they invested;” and noting that 
“it is the duty of the peoples of Latin America to be inclined toward 
the recuperation of its national riches, taking them away from the 
control of the monopolies and foreign interests that impede the progress 
of the peoples, promote political interference, and infringe upon the 
sovereignty of the underdeveloped peoples of America.” In accordance 
with the Agrarian Reform Law of 1959, the expropriated land was used to 
develop state-managed agricultural enterprises; or it was distributed 
without charge to peasants who worked on land they did not own, each 
receiving a “vital minimum” of 26.85 hectares, and all encouraged to 
form voluntary agricultural cooperatives.

Joint Resolution #1 also nationalized a U.S.-owned electricity company 
and a U.S.-owned telephone company, both of which charged notoriously 
high rates, the reduction of which had been a popular demand prior to 
the triumph of the revolution.  In addition, the Joint Resolution 
nationalized three oil refineries, which historically had set a higher 
price for Cuban distributors; and which recently had refused to process 
Soviet crude that had been purchased at a favorable price by the Cuban 
government, compelling the government to invoke a 1938 agreement and 
order the refining of the oil.   Under state ownership, electricity and 
telephone rates and gasoline prices were significantly reduced.

Joint Resolution #2 of September 17, 1960 nationalized the three U.S. 
banks in Cuba.  Historically, the crediting policies of the U.S. banks 
had favored Cuban exportation of raw materials and importation of U.S. 
manufactured goods, thus restricting Cuban industrial development.  
Since the triumph of the Revolution, the banks had adopted policies 
designed to reduce U.S.-Cuban commerce, supporting the efforts of the 
U.S. government to suffocate the Cuban economy.

Joint Resolution #3, issued by the Revolutionary Government on October 
24, 1960, authorized the nationalization of the remaining 166 U.S. 
properties in Cuba. They included 28 insurance companies, 18 chemical 
companies, 18 mining companies, 15 machines importing companies, 11 
hotels and bars, and 7 metallurgical companies.  These nationalizations 
were a response to the continuing aggressiveness of the U.S. government 
toward the Cuban Revolution, including its October 19 prohibition of the 
export of U.S. merchandise to Cuba.

The government of Cuba repeatedly declared its disposition to negotiate 
with the government of the United States any demands that might emerge 
from U.S. proprietors adversely affected by the nationalizations. 
Consistent with this disposition, the government of Cuba negotiated 
agreements with five nations, settling the demands of their citizens 
resulting from the Cuban nationalizations: France (agreement of March 
16, 1967); Switzerland (March 2, 1967); United Kingdom (October 18, 
1978); Canada (November 7, 1980); and Spain (January 26, 1988).

Lacking support from the U.S. side for cooperation, revolutionary Cuba 
continued on its sovereign road, which included the proclamation of the 
socialist character of its revolution; and the development of popular 
democracy, with mass organizations, mass assemblies, neighborhood 
nomination assemblies, and assemblies of popular power, alternatives to 
the structures of representative democracy.  The United States, 
meanwhile, continued with its policy of regime change, maintaining a 
prohibition of economic, commercial, and financial transactions with 
Cuba.  The Helms-Burton Act of 1996 grants the U.S. government the right 
to continue with coercive economic measures until Cuba replaces its 
structures of popular democracy with those of representative democracy.

The Cuba-USA conflict continues unresolved because the North-South 
global conflict, to which it pertains, also remains unresolved. The 
neocolonial global powers ignored the adoption by the UN General 
Assembly of the New International Economic Order.  Moving in the 
opposite direction, they imposed neoliberal economic policies on the 
neocolonies of the world; and subsequently, with the expansion of a new 
form of terrorism as a pretext, they launched wars of aggression in the 
Middle East.

Just as revolutionary Cuba persisted in its sovereign road, the 
governments of the Third World have persisted in their proposal for a 
new international economic order.  The persistence of the Third World 
project is evident in the evolution of the Non-Aligned Movement, which 
has grown to 120 member-nations today. The Movement was highjacked by 
accommodationists to neoliberalism from 1982 to 2006, but since 2006, 
when Cuba assumed the presidency for the second time, the Movement has 
retaken the principles of the period 1955 to 1982.  At the same time, 
during the last twenty years, Latin America and the Caribbean have 
developed regional associations, putting into practice the Bandung call 
for unity and economic cooperation.  These regional associations and the 
progressive governments of the region have been developing economic 
cooperation and political alliances with China, Russia, Vietnam, and 
Iran, whose leaders invoke the discourse and the spirit of Bandung.

In the context of the sustained structural crisis of the world-system 
and the relative economic decline of the United States, U.S. imperialist 
policies toward Latin America are no longer viable.  The Trump policy of 
aggression toward Venezuela, Cuba, and Nicaragua has even less 
possibilities, inasmuch as greater militarism and economic 
aggressiveness accelerate the U.S. economic and commercial decline, and 
they exacerbate the structural contradictions of the world-system. A 
world-system founded on cooperation and mutually beneficial trade, 
persistently proposed by the neocolonized peoples, is the necessary road 
for humanity.

-- 
Freedom Archives 522 Valencia Street San Francisco, CA 94110 415 
863.9977 https://freedomarchives.org/
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