Foreign Relations of the United States: Diplomatic Papers, 1943, The American Republics, Volume VI

837.61351/4207

Memorandum of Conversation, by George F. Scherer of the Division of the American Republics

[Washington,] September 8, 1943.

Participants:
	Cuban Delegation	United States Delegation
	Dr. Arturo Mañas	Mr. Earl Wilson,16 CCC
	Señor Manuel Rasco13	Mr. James C. Marshall, CCC
	Dr. Oscar Albertini14	Mr. Russell Burchard, CCC
	Dr. Felipe Pazos15	Mr. Frederick Horne, OEW17
		Mr. Willard Barber, EA18
		Mr. G. F. Scherer, RA

The United States and Cuban groups resumed discussions of the 1944 Cuban sugar purchase on September 6 in Mr. Wilson’s office. Mr. Wilson presented a draft Purchase Contract¹⁹ which the Cuban Delegation read, indicating that it would have comments to make on the following points:

(1) The Cuban group does not wish to be placed in the position of prohibiting Cuban syrup producers from making the 8,000,000 gallons per year called for under the Sugar Act of 1937.²⁰ Mr. Wilson stated that we would have to maintain a firm position in connection with syrups, for the reasons which had been made clear during earlier discussions.

(2) The Cubans indicated they wish to have the contract signed in Washington.

(3) As drafted, the contract mentions that, if invert molasses is needed in the war effort, the appropriate amount of raw sugar will be taken out of the terms of the contract. The Cuban group stated that it would have some suggestions to make on molasses.

(4) The draft contract stated that no insurance company would be entitled to underwrite more than 8% of the total coverage. While stating that he wishes to avoid a repetition of last year’s situation with respect to insurance, Dr. Mañas expressed the fear that an 8% limit would be too strict and too stiff and might defeat the purpose which the CCC has in mind.²¹

(5) Dr. Mañas called attention, on behalf of the Cuban group, to the fuel oil situation for the 1944 crop. Although not mentioned in the draft contract, Dr. Mañas stated that the amount of fuel oil to be allocated by the Petroleum Supply Committee would, in the view of the Cuban Delegation, be entirely inadequate for the crop needed by CCC. He stated that it is not feasible to grind a crop ⅓ larger with a fuel oil supply ¼ smaller. It was suggested that he have submitted to the Embassy at Habana and to Washington a report in this connection for consideration of United States authorities.

[On September 22, 1943, the 1944 Cuban Sugar Crop Purchase Contract was signed in Washington, by Commodity Credit Corporation and the Cuban Sugar Stabilization Institute. By the terms of this agreement, Commodity Credit Corporation contracted to purchase a minimum of 4,000,000 English short tons of raw sugar outright at 2.65 cents, United States currency, per pound free alongside vessel at the customary port of loading for each mill in Cuba. Unless altered by further agreements, the total 1944 sugar crop was to be limited to 4,200,000 short tons, 200,000 of which would be available for Cuban consumption or, if not needed, included in the Commodity Credit Corporation purchase.]

16. Chief of the Sugar Section of the Commodity Credit Corporation.
13. Administrator General of the Cuban Sugar Stabilization Institute.
14. Secretary General of the Cuban Sugar Stabilization Institute.
15. Felipe Pazos y Roque, Commercial Attaché in the Cuban Embassy in Washington.
17. Office of Economic Warfare, which succeeded the Board of Economic Warfare on July 15, 1943.
18. Division of the American Republics.
19. Not printed.
20. Approved September 1, 1937; 50 Stat. 903.
21. For details of the sugar insurance negotiations, see pp. 185 ff.