837.61351/4113
The Chief of the Division of the American Republics (Bonsal) to the Vice President of the Commodity Credit Corporation (Brown)
Dear Courtney: I was delighted to hear from George Scherer of the successful start of the sugar negotiations. My friend Dr. Guerra, with whom I talked on Monday afternoon, expressed greatest satisfaction with the way in which things were going.
Larry5 and I and the rest of us in the Department who have been concerned with sugar matters, together with the Embassy in Habana, would like to be of the greatest possible assistance to you in your difficult and delicate task. I would suggest, therefore, that before written proposals or memoranda are handed to the Cuban Delegation the Department be given an opportunity to comment. With regard to the memorandum6 which I understand was handed to the Cuban Commission yesterday, I have the following observations:
- (1)
- “Bibijagua” Sugar. As you know, this is sugar produced by certain mills illegally. Generally the producing mills are near centers of consumption to which the sugar is rapidly and clandestinely moved to avoid local taxes. This type of sugar cannot move outside of Cuba. It seems to me neither practical nor desirable for us to ask the Cuban Government and the Sugar Institute for any commitments in this matter. They are just as interested as we are in restricting its production. It will not be possible for anyone to establish in a legal manner the production of this illegal sugar. Therefore, I propose that this question be approached through (a) joint agreement as to the amount of sugar to be produced for local consumption and (b) a definite limitation on the amount of excess local consumption which we will buy for export. I feel strongly that the approach suggested in the memorandum which was handed to the Cubans could be considered as a reflection upon the industry and as an undue interference in domestic Cuban affairs.
- (2)
- The Side of the Crop. I feel strongly that an endeavor should be made to fix the size of the crop finally and definitively prior to the beginning of the grinding season. For a variety of practical reasons, it would be unfortunate for uncertainty as to the ultimate size of the crop to prevail during the grinding season itself. Certainly we are not going to be able to make any exact adjustment [Page 171] between production and shipping and I hope and believe that by January 1 you will be in a position to give a final figure confirming the preliminary figure at which I understand you now wish to arrive.
- (3)
- Storage. It is my own opinion, supported by the views of a number of sugar people with whom I have spoken, that storage facilities in Cuba can be adapted and additional facilities provided to take care of almost any foreseeable amount of sugar. Therefore, I suggest that in our discussions with the Cubans the size of the crop be related entirely to shipping facilities, with little or no emphasis on the question of storage except to establish appropriate responsibilities.
- (4)
- End of Grinding. I note that on page four of your memorandum you indicate the possibility that the grinding season may not have terminated by June 1. It is, in my judgment, highly unlikely that many mills, regardless of the size of the crop, will be able to grind after June 1.
- (5)
- Petroleum Requirements. I think it should be brought out to the Cubans as emphatically and clearly as possible that we expect and require their cooperation in the matter of conservation of petroleum products and the conversion of the industry as far as possible to other fuels, if we are to attain the relatively large sugar production which we are willing to underwrite.
Ambassador Braden feels strongly that it would be desirable to arrange for the 1944 sugar to be delivered f.o.b. the vessel instead of f.a.s., as has been the case, as I understand it, in 1942 and 1943. I think that this matter warrants a careful exploration with Ambassador Braden and I suggest that, unless you have already done so, you discuss this with Mr. Norregard.7 In other words, I do not feel we should take War Shipping’s mere say so on this without a careful investigation.
I was in the process of dictating the above when we had our telephone conversation this morning. I do hope that you will find it possible to emphasize to the Cubans that the memorandum handed to them yesterday is not a considered expression of the official views of this Government, but is rather to be considered, as you put it, an informal agenda to serve as a basis for further discussion. It might be desirable to ask the Cubans that, if they feel it necessary to send this memorandum to Habana, they stress its informal, tentative and preliminary character.
With cordial regards and best of luck to you,
Sincerely yours,