883.24/12–3044
The Acting Secretary of State to the Egyptian Minister (Hassan)
The Acting Secretary of State presents his compliments to the Honorable the Minister of Egypt and has the honor to refer again15 to the Minister’s communication of December 30, 1944 in which he refers to the Surplus Property Act of October 3, 1944 and expresses the apprehension of his Government with respect to possible reprecussions on Egyptian cotton prices as a result of exports of United States cotton at prices below those in the United States.
The cotton-export program of the United States is a corollary of the present domestic program of assistance to American cotton growers. The occasion for the export program arises from the fact that the United States maintains, through crop loans and other price supporting measures, domestic prices for cotton substantially higher than those prevailing in other producing countries. With a domestic cotton price above the general world level few, if any, exports could take place in the absence of an export program. This export program is intended only to permit United States cotton to maintain a reasonable share of the world cotton market.
It will be recalled that the War Food Administration in an announcement of November 11, 1944 (a copy of this announcement and a copy of a release of the War Food Administration on “Terms and Conditions of Cotton Sales for Export Program” are enclosed16) stated that it was not the intention of the Government of the United States to enter into a competitive price war. It is believed that the [Page 97] actual operation of the cotton program substantiates this statement, and it is expected that actual operations in the future will continue to bear it out.
The Government of the United States considers it highly desirable that the problems involved in the present cotton situation be dealt with on the basis of international cooperation. In this connection Mr. Acheson, Assistant Secretary of State, made the following statement on December 5 before a Special Subcommittee of the House of Representatives Committee on Agriculture meeting to consider and recommend future programs and policy with regard to cotton:
“Burdensome commodity surpluses should be dealt with on a basis of international cooperation in such a way as to avoid the development of unfair trade practices and unhealthy international rivalry. If provision is made for the orderly liquidation of world surplus stocks no one country will dispose of its surplus in a fashion detrimental to the interests of other countries who are also burdened with large accumulations. Furthermore the fear of disorderly world markets will be removed and trade will be carried on in an atmosphere of mutual respect for the rights of other exporting countries. In such an atmosphere there will be hope for the expanded world trade which is so necessary for the attainment of high levels of employment and income.”17
The forthcoming meeting of the International Cotton Advisory Committee is primarily for the purpose of drawing up a recommendation to governments in regard to possible international collaboration in respect of cotton.
For the further information of the Minister of Egypt there are enclosed copies of recent statements by The Honorable Claude R. Wickard, Secretary of Agriculture,18 and Mr. Acheson before the Special Subcommittee referred to above, which discuss the cotton problems, domestic and international, facing the United States.
The Department of State welcomes the sympathetic interest of the Government of Egypt in the liberal economic principles which the United States Government advocates, and wishes to assure the Government of Egypt that everything possible will be done to reach agreement with the other countries of the world on long-term policy for the elimination of burdensome agricultural surpluses and trade restrictions.
- There had been a note of acknowledgment dated January 13, 1945, not printed.↩
- Neither found attached to file copy.↩
- For full text of statement, see Cotton: Hearings before the Subcommittee of the House Committee on Agriculture, 78th Cong., 2d sess. (Washington, Government Printing Office, 1945), p. 211 or Department of State Bulletin, December 10, 1944, p. 700.↩
- See Cotton, p. 94.↩