File No. 837.61351/60
The United States Food Administrator ( Hoover ) to President Wilson
Dear Mr. President: As you know, we have formed a joint committee with the Allies for the united purchase and division of Cuban and other foreign sugars. In the meantime, we had fixed a price agreement with our own sugar producers. On the basis of our domestic price the International Committee should pay approximately $4.80 per 100, delivered New York, for Cuban sugar. This is an increase of $1.30 per 100 pounds over 1913, the year before the war, and an increase of 25 cents over 1917, and in our view fully takes account of any increased production costs in Cuba and leaves a very wide margin of profit to the producers.
The English members of our committee contended for a price of about $4.30 New York, but, in an effort to conciliate, we offered and persuaded the English members to agree with us in offering the excessive amount of $4.90.
President Menocal has intervened and is endeavoring to force a price which works out from $5.05 to $5.25 New York and has dispatched a committee to New York to negotiate.
[Page 350]The President of Cuba, we understand, refuses to accede and claims he will force us to agree through the American Government. We have endeavoured to keep the entire matter simply a commercial transaction, but they insist on interjection of governmental pressure.
I feel that we can not, in justice to our consumers or to our own producers, accede to their demands. It means on maximum figures demanded, about $40,000,000 to our people, and likewise a large increase of similar amounts to our Allies, which we will probably have to finance. Cuba only obtains a minor part of this huge sum because an increased price to them automatically raises the price of all the sugar of the whole world.
I trust we will, if the matter arises, have your support in our views.
Faithfully yours,