File No. 837.61351/59
The Cuban Minister ( De Céspedes) to the Secretary of State
My Dear Mr. Secretary: In reply to your excellency’s note in date of November 8, I have the honor to say that my Government coincides with the Government of the United States in believing that the price of sugar should be decided entirely on its own merits; but it is in so far as these can be determined without failing to bear in mind that the question exceeds, at present, the proportions of a mere mercantile proposition.
It was not my purpose, however, when speaking for my Government, to ask the Government of the United States to take any specific action in the fixing of the price of sugar. I only desired to beg your excellency to have the views expressed in my note, No. 129 of October 26, 1917, brought before the United States Food Commission, in order that the opinion of my Government, on so vital a subject for Cuba, should be made known to them with the recommendations that the State Department might see fit to express, in view of the great and friendly interest it has always shown in Cuba and in the Cuban sugar industry, or as the result of the data it may have in its possession as a consequence of its recent investigations.
Precisely the fact that the price of Cuban sugar was no longer to be discussed in open market, but fixed by a committee of government officials, in which the Royal Commission of His Britannic Majesty, who also represent Belgium, Italy, and France, are seated under the chairmanship of a distinguished delegate of the United States Food Board, and of which two representatives of the refining interests are members, counselled the Cuban planters to have their views expressed also through government channels, and eventually conveyed to the International Sugar Committee.
Under the circumstances, it would appear that the Allied nations of the Entente and the United States having united, in order to suppress all competition among themselves in the purchase of sugar by making their purchases and the purchases of their refiners through an international and official organization, the sales made through or to them could not be the most properly qualified as taking place “under the auspices” of said committee, but rather that the committee would have assumed the supreme control of the purchases as the sole buyer for the Allies throughout the world.
[Page 348]However this may be, the buying end of the business presents so much of a centralized and official aspect that it has not only eliminated free competition between Cuban sugars and the other sugars to which your excellency’s note refers, but would invite the same unification, under official auspices, of the Cuban producers, the mill owners, and colonos of Cuba.
That my Government fully appreciates the risks of every nature that the Cuban sugar industry is about to face, and could not leave them unexposed to the United States Government, is now made more evident by the announcement contained in your excellency’s note of “the intention on the part of all the Allied buyers to limit the consumption of this commodity in order to reduce national expenditure,” and is further enhanced by the other statement of the same note, that there may be a shortage of shipping so that the entire production can not be moved. I could also add that many other circumstances with which the planters are confronted are already obliging them to make new sacrifices and expenses of every kind in order to meet the demands of the abnormal situation.
That considerable quantities of Cuban sugar could be contracted for from certain producers at the present time may be exact; but I have had information to the effect that the price offered, and which they were willing to accept, was that of 4.60 which is very near the price of 4.75 suggested by my Government, and that these producers are precisely the ones who have attained the highest perfection and lowest cost of production in Cuba to which my previous note had reference. The contracting for their sugar at a lower price than the other mill owners and colonos could create a situation most hurtful to the great majority of the planters and favor vast speculations, if my Government were not ready to oppose, in every legal manner consistent with good policy an unfair disposal of the Cuban crop.
All these circumstances not only justify the price of 4.75 f. o. b., recommended by my Government, but would counsel a much larger margin to the planters than ever was requested; and the Cuban Government is fearful-that if the price, of at least 4 cents 75 is not reached, the Cuban sellers will either have to accept the price dictated by the International Committee or hold back—two extreme situations that would work alternatively against the interests of the sellers and the buyers, even if the consumption of sugar is eventually limited.
Without any intention of discussing this policy, it would seem, however, that the availability of sugar to the Allies as a product endowed with high nourishing qualities, should be especially appreciated at a time in which food shortage is, throughout the world, the distressing topic of the day. This circumstance also enhances the merits of Cuban sugar and would appear to advise encouragement to those who have it in their power to maintain the Cuban production at its present degree as a positive asset on the side of the Allied nations for which the resources of Cuba should be justly credited and counted upon.
The time for preparing new areas for planting now being near at hand, it would be most important to know more positively whether the requirements of the Allies are to be reduced in order that a corresponding reduction may be provided for by the Cuban planters.
[Page 349]All these grave uncertainties and others of a financial character that cannot escape the investigation and calculations of the international commission, indorse the price of 4 cents 75 free on board in Cuban ports which the Cuban Government suggests as a fair minimum.
May I also state that under prevailing conditions it is unfortunately impossible to reduce the price of Cuban sugar further than the minimum which my Government is willing to recommend because they consider it both equitable and just, for, should we examine as a basis for calculation the price of 7 cents 25 given to the beet-sugar producers, we would immediately find that the very small difference in our favor is more than compensated by a corresponding difference of risks, delay in transportation and other burdens that bear heavily upon the Cuban sugar industry, among which loss of weight, loss in test, interest for delay in receiving the product, the customs and higher rates of interest for the capital demanded.
The Cuban commission who came to the United States to confer with the International Committee has amply informed them of the situation as set forth in this note and my previous correspondence, without, however, obtaining, as yet, any comfort to announce to Cuba.
I have the honor to add most respectfully that all these facts are laid before your excellency due to the certainly unusual conditions that have been created in the process for the sale of Cuban sugar and to establish that my Government does not recommend an unjustified price, but a fair treatment of the only great industry we possess and on which the Cuban people and their entire economic life are so completely dependent.
With the assurances [etc.]