837.5018/69
The American Ambassador in Cuba (Braden) to the Cuban Minister of State (Santovenia)35
Excellency: I have the honor to refer to a memorandum approved by representatives of Your Excellency’s Government and of my Government on August 20, 1943,36 during negotiations for the sale of Cuba’s 1944 sugar crop, which provided inter alia that in 1944 my [Page 218] Government would take measures designed to assist Your Excellency’s Government in stabilizing prices for rice, wheat flour and hog lard similar to the price stabilization measures taken in respect to these basic foodstuffs in 1943.
In recent conversations held in Washington by Ingeniero Amadeo Lόpez Castro,37 representing Your Excellency’s Government, and officials of my Government, a plan was agreed upon under which my Government would maintain the export prices to Cuba at levels which prevailed in 1943 for United States rice, until September 1, 1944; for United States wheat flour, until January 1, 1945; and for United States hog lard, until September 30, 1944.
In return, it was agreed that Your Excellency’s Government would undertake to maintain and effectively to enforce in Cuba the existing wholesale and retail ceiling prices not only for these three commodities, but also for edible oils, meat, milk, beans, charcoal and alcohol, and that if during 1944 the Cuban Sugar Stabilization Institute or its assignees should derive any benefit from increase in the price of raw sugar, as provided in Article 4 (b) of the 1944 Cuban Sugar Crop Purchase and Sale Contract,38 my Government would benefit to a proportionate extent in connection with prices of rice, wheat flour and hog lard.
Since the cost of living of the Cuban people is the basic question involved, Your Excellency’s Government will of course understand that the maintenance of prices at existing levels by the Government of Cuba implies effective enforcement of the legal Cuban ceiling prices, to the end that the Cuban consumers may receive the actual benefit of my Government’s price stabilization undertakings. It would not be consistent in principle for my Government to continue to maintain agreed levels of prices for rice, wheat flour and hog lard shipped from the United States to Cuba should it develop that Cuban consumers are not benefiting to the extent contemplated by these undertakings.
In accordance with the agreement reached, the United States Department of Agriculture and the War Food Administration will undertake the following:
Rice: Until September 1, 1944, the price of rice exported from the United States to Cuba, delivered Habana, Cuba, will not exceed a price of $6.96 c. i. f. Habana for 50 percent broken Prolific. Charges when sent through Tampa shall not exceed the following: [Page 219]
| OPA ceiling f. o. b. mill | $5.555 | |
| Export Premium—4 percent | .22 | |
| Rail freight mill to Tampa | .56 | |
| Wharfage | .04 | |
| Switching | .005 | |
| U.S. Certificate | .015 | |
| Forwarding | .015 | |
| Marine Insurance | .03 | |
| Ocean freight | .355 | |
| Ocean freight surcharge | .16 | |
| Landing charge | .01 | 1.19 |
| $6.96 |
The rate for war-risk insurance shall not exceed that in effect at present.
The prices of other varieties of rice shall be those established by the existing OPA regulation and the above charges except that charges for transportation will be those allowed by OPA regulations from the point of origin of the shipment. The regulations now in effect are the same as those existing when last year’s negotiations took place. No attempt is made to allocate the varieties of rice which will be imported since it is assumed that the Cuban importers will select those varieties which best suit their particular customers and best fit into the price schedule at the time of purchase.
It is understood that Cuba will not make purchases of rice in the United States at c. i. f. Habana prices higher than those provided for above without prior approval of the United States Department of Agriculture and the War Food Administration.
The Office of Economic Warfare will use its best efforts to secure maximum practical movement of rice through Gulf ports.
The quantities of rice involved in this undertaking shall be in accordance with the allocations made by the Combined Food Board to Cuba for the year beginning October 1, 1943. It is expected that the total allocation will be equal to the 375 million pounds allocated the preceding year. Part of the allocation will be from sources other than the United States, and the United States cannot undertake responsibility if the price at such foreign sources should exceed the agreed price at which United States rice is to be delivered c. i. f. Habana. There is, however, the possibility that the United States might own substantial quantities of rice in foreign countries. Should this be the case, the United States would agree to deliver the allocations made to Cuba from sources other than the United States at the same price as though the rice were being delivered from the United States for similar type and grade.
Wheat Flour: For the calendar year from January 1, 1944, through December 31, 1944, the United States will cause to be made available [Page 220] to Cuban importers bread wheat flour of a quality normally used by bakers in Cuba at a price of $6.90 per barrel, c. i. f. Habana, when made from United States wheat and delivered through New Orleans. The quantity involved shall not exceed 1,200,000 barrels. Any purchases made from Canada shall be deducted from the United States commitment. War-risk insurance charges shall not be higher than the present rates. The procedure for handling the above guarantee will be transmitted to Cuba at an early date.
Hog Lard: From October 1, 1943, until September 30, 1944, the price of refined lard exported from the United States to Cuba in carloads, tierces originating in Kansas City, shall not be higher than the following:
| OPA ceiling (carload tierces—Kansas City–per 100 pounds) | $14.30 |
| Export premium | 1.00 |
| OPA Price | 15.30 |
| Rail freight, Kansas City to Tampa | .90 |
| Switching | .045 |
| Forwarding | .34 |
| Ocean freight | .88 |
| Marine Insurance | .06 |
| $17.53 |
The prices of other types of lard shall be those established by the existing OPA regulations and the above charges, except that charges for transportation shall be those allowed by OPA regulations from the point of origin of the shipment.
The rate of war-risk insurance shall not exceed that in effect at present.
It is understood that Cuba will not make purchases of hog lard in the United States at c. i. f. Habana prices higher than those provided for above without prior approval of the United States War Food Administration.
The quantities of hog lard involved shall be the amount allocated to Cuba by the Combined Food Board, and it is expected that proportionately, this quantity will equal or exceed last year’s allocation which was 45 million pounds for the entire year. This allocation, however, will be firm only for one quarter at a time, it being understood that any lard secured by Cuba from other sources will be taken into account when the allocation is made for the subsequent quarter. It is further understood that Cuba may be requested to obtain more than a single quarter allocation of lard in one quarter and that should it fail to obtain the directed amount, there will be no obligation to make up the amount missed in subsequent quarters.
[Page 221]I am confident that the foregoing measures will prove a substantial contribution toward the prevention of further increases in the cost of living in Cuba, and that Your Excellency’s Government will in turn find it possible to provide assurances to my Government that effective enforcement of ceiling prices will permit the Cuban people to derive therefrom the fullest possible benefits.
Permit me to renew to Your Excellency the assurance of my highest consideration.
- Copy transmitted to the Department by the Ambassador in his despatch No. 5002, November 3; received November 8.↩
- Not printed.↩
- López Castro was Chairman of the Cuban Sugar Commission that had been negotiating in Washington a contract for the purchase of Cuban sugar and related products.↩
- Article 4 (b) described the manner in which increases in the ceiling price of sugar after its import into the United States would be reflected in increased prices for sugar above the contract rate of 2.65 cents per pound.↩