File No. 837.51/291
The Acting Secretary of State to the Food Administrator ( Hoover)
Sir: The Department is in receipt of your letter of February 191 in which you state that owing to the general financial stringency in commodity loans and to the reactive effect of the stoppage of credits to German banking institutions in Cuba, to the higher price of Cuban sugar than normal, and to the slower movement of the sugar from Cuba to consumption, there has been imposed the necessity of organized finance for the Cuban sugar crop, and that the Cuban banks have already extended loans to their complete limit, and that unless some relief can be gotten within the next several days there will be a stoppage in the grinding of sugar, which will result not only in the destruction of large quantities of sugar but will bring about another sugar famine in the United States. You further state that this matter has been taken up with American financiers with a view to organizing a loan of $100,000,000 for this purpose, and that the Secretary of the Treasury has instructed the Federal Reserve Banks to lend every possible assistance in consummating the underwriting, and the Shipping Board has agreed to provide a minimum of 2,000,000 tons of shipping to move the sugar from Cuba to the United States. You further state that the banking interests which are ready to undertake this loan desire to be informed whether the matter is one which is in accord with the policy of the Department of State.
[Page 320]In reply, the Department desires to call your attention to a letter which was directed by the Secretary of State to the Secretary of the Treasury on February 12 in this connection, a copy of which is herewith enclosed,1 and wishes to reiterate the statement which was made in this letter to the effect that it trusts that the necessary credit to meet the present situation in regard to the Cuban sugar crop may be consummated at an early moment.
I have [etc.]