837.61351/211: Telegram

The Secretary of State to the Minister in Cuba ( Long )

36. For General Crowder.

Your February 9, 3 p.m.

In order to avoid a serious shortage in the supply of sugar, the Department appreciates the urgent necessity of taking steps to insure the grinding of the present crop in Cuba and to provide some means [Page 796] whereby the planters may be assured of necessary financial aid. The Department realizes that the maintenance of a fair price and orderly marketing of the crop will be the sole means of promoting the continued extension of credits by the bankers. It does not, however, appear from the proposed Executive Decree transmitted by you to the Department that the interests of the consumer, which in this case is the American consumer, are sufficiently safeguarded, and in view of the present state of public opinion in the United States the Department cannot approve the proposed Decree unless proper safeguards to the American consumer are provided, nor would it feel justified in so doing.

The Department believes, therefore, that the sugar commission should be appointed only upon the definite understanding that it shall be the aim of the commission to market the sugars in an orderly way in accord with natural laws and that it will not permit an artificial price to be created. For your information and for that of the commission, after careful consideration, the Government of the United States believes that in order to avoid abuse the maximum price at which the commission should dispose of the sugars under its control or permit their export is between 6 and 6½ cents. Furthermore, the proposed composition of the Sugar Finance Commission is open to grave objection. As proposed in Article 8 of the Decree, the Commission would contain five members representing the interests desirous of maintaining the price of sugar at the highest possible rate. The Department considers this preponderance indefensible. It is therefore believed that the Commission should be composed of two members representing the larger producer, one member representing the smaller producer, two members representing the banking interests and one member representing the public. The latter representative should be a member of the Cuban Government.

Upon the understanding that these amendments are incorporated in the proposed Executive Decree, the Department raises no objection to the immediate promulgation of the Decree. You should, however, make it clear to President Menocal and to the members of the Commission when appointed that the United States Government reserves the right to oppose a continuance of the plan should it be ascertained that the Commission is permitting the price of sugar to be maintained at an artificial figure.

Colby