File No. 837.61351/52

The Secretary of State to the Cuban Minister ( De Céspedes)

Sir: I have the honor to acknowledge the receipt of your note of October 26, in which you set forth the views of your Government respecting the price of Cuban sugar.

In reply, I have the honor to inform you that the contents of your note have been given the careful consideration of this Government and that it considers that the matter of price should be determined between the buyers and the sellers.

As you have been informed, the American refiners, together with the Allied buyers have now a commission in New York City, and it would appear that the question of price should be determined through negotiations between the sellers and the buyers, under the auspices of this commission.

The Government of the United States is not desirous of establishing a precedent for Government-fixation of prices for imports, as the producers of American foodstuffs may raise the same issue with regard to exports to Cuba.

It would seem to be desirable to point out that the matter treated of in your note is not only dependent on the questions raised by you, but also upon the competition of other sugars with Cuban sugar, and the intention on the part of all the Allied buyers to limit the consumption of this commodity in order to reduce national expenditures.

Furthermore it would appear that there may be a shortage of shipping, so that the entire production can not be moved, and the price might therefore be necessarily of such an attractive character as would induce buyers to hold over a long period.

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The Department has been informed that the price stated in your communication is higher than the prices agreed to by the producers of Hawaii, Porto Rico, and the beet-sugar industry, and it would appear to be a higher price than that at which considerable quantities of Cuban sugar can be contracted for from certain producers at the present time.

I also have the honor to add that all the points which have been mentioned above would seem to emphasize the importance of deciding the price for Cuban sugar entirely on its own merits and without Government intervention.

Accept [etc.]

Robert Lansing