837.61351/211: Telegram
The Representative on Special Mission in Cuba ( Crowder ) to the Secretary of State
[Received 8:28 p.m.]
25. Referring to my cable of February 7, 10 a.m. [1 p.m.]. Proposed Executive decree on stabilization of prices for Cuban sugar production for the year 1920–1921 referred to me by President Menocal for my approval provides as follows:
- 1st.
- For the creation of a sugar finance commission consisting of seven members, five to represent producers and two the bankers participating in loans on present crop.
- 2d.
- Commission to control all operations of sale and shipment of present crop sugar products and to apportion passage [tonnage?] among product owners sales made and proceeds thereof derived from foreign market transactions.
- 3d.
- From the taking effect of Executive decree vessels carrying sugar products may not be cleared without authorization by commission.
- 4th.
- The commission shall respect all contracts and commitments on foreign account made prior to this decree.
- 5th.
- The commission shall publish semi-monthly and monthly average sale sugar made by them and commercial brokers association shall base thereon the semi-monthly average price of sugar to establish semi-monthly liquidation basis between mill owners and growers.
- 6th.
- Commission to serve without compensation, but its disbursements to be apportioned among interested parties.
- 7th.
- Members of commission only responsible criminally, Government liability for their acts being expressly disclaimed.
- 8th.
- Decree provides following commission personnel: Manuel Rionda, Robert Hawley, Miguel Arango, representing larger producers already accepted; Tarafa and Aspuru representing smaller producers, Guma as alternate if either declines; and Porfirio Franca and Frank Beatty representing banking interests.
- 9th.
- Taking effect of decree made dependent on formal acquiescence of mill owners in the aggregate representing 75 percent of production of last year, such acquiescence to be evidenced by formal acceptance of provisions of decree executed on specially prepared form for such purpose. Secretary of Agriculture charged with execution of decree.
- 10th.
- Commission empowered to make its own rules, conduct, and regulations for administration of the decree and assist in every way the obtaining of credits necessary for the marketing of crop.
- Conclusion: In judging present situation the important ends to be achieved must be kept in mind. Primarily this is the making of the present crop and secondarily to that end planter and grower must be assured of fair price and of sufficient financial aid.
I am informed by banking interests that assurance of fair price and orderly marketing of crop will be the most powerful factor in promoting banking assistance. Decree safeguards American consumer by provision in preamble that its purpose is to assure a [ratio equal to or] slightly less than that which is obtained for the sugars of the same class from other countries. I have also assured myself in conference with five members of the commission that they desire only orderly marketing of the crop at reasonable prices and would regard high prices as detrimental to best interests of Cuba as tending to repeat present situation which grows out of exorbitant prices of last summer. Consumer being thus protected refiner needs no special protection as same conditions protect him.
Present situation very serious and immediate action vital. Present plan promises best solution both of price and finance difficulties and should therefore in my judgment be approved. Am satisfied that 75 percent of producers will speedily sign up and well-informed people are confident balance will be speedily secured.
Believe present plan offers best prospects of solution but present situation so complicated that no sure cure-all is possible.
My recommendations based on numerous conferences with mill owners, producers, colonos, bankers, export houses, brokers.
Albert Strauss, ex-vice governor Federal Reserve, and American merchants were present at my conference with five commission members yesterday. Mr. Strauss visited President with me this morning, and he, as well as American merchants, strongly join in my recommendation that Department approve this decree.
President expressed a wish that Department’s approval might be received in time to permit issue of decree tomorrow and business interests believe instant action to be vital.