637.116/123: Telegram

The Chargé in Cuba (White) to the Secretary of State

171. At meeting on 29th, rice exporters and importers came to agreement to ask Government to license importation of rice for six months. Permits would only be given to those able to show they have warehouses immediately available for storage of rice on arrival and recourse is not had to banks for financing shipment. This would be tantamount to prohibition of importation. Local dealers would be able to meet drafts and there would be little if any loss to either American exporters or Cuban importers and Americans claim price will be lowered to Cuban people.

This project was submitted to Secretary of Commerce and Labor on Saturday. I saw him today and he is not for it on the ground that it will create a monopoly in favor of those who now have rice here, that it will keep the price of rice higher for the consumer than if the matter were thrown out and that closing Cuba to rice importations will affect Cuba’s foreign relations with Great Britain, France, Japan and other rice exporting countries.

I told him that even if information circulating [circulated?] by rice exporters that price would be lowered by licensing importers were incorrect it would appear better to keep the price of rice temporarily at present level and save Cuba’s credit as prices would doubtless rise in the future through less favorable banking facilities should Cuba’s credit be impaired, that apparently the present project would preserve Cuba’s credit, would cause a loss to no one and would, according to my information, lower prices to the Cuban consumer. As to affecting Cuba’s formulations [foreign relations] I pointed out that Great Britain and France and Japan had apparently not consulted Cuba when they put an embargo on exports of rice from their territory and then suddenly opened the matter which was the cause of all the present trouble.

I understand that rice growers in Louisiana and other Southern States have regularly shipped their rice to Cuba and a prohibition of importation now might seriously affect their interests. Before pressing the matters with the President I beg to request the Department’s instructions as to whether it is in favor of asking the Cuban Government to prohibit the importation of rice under the conditions above mentioned. As the matter is urgent I have the honor to ask an early reply.