837.61351/211 supp.: Telegram
The Secretary of State to the Minister in Cuba ( Long )
38. For the Minister and General Crowder.
Refer our 36, February 10, 6 p.m.
The position of the Department regarding the proposed action of the President of Cuba regarding the exportation of sugar is based upon the assumption that the natural law of supply and demand has, on account of abnormal conditions in Cuba, been upset, and that the effort of the Cuban Government is through an orderly marketing of the sugars to restore confidence and the natural law of supply and demand. It is fully realized that if this is not done there would be a serious shortage of sugar in the world’s supply, which would increase most materially the price to the consumer. It must be [Page 798] made very plain, however, to the Cuban Government and to the Commission that if the Commission, through the powers conferred upon it, adopts measures which result in an artificial increase in price, and thus the cost to the American consumer, this Government must then interpose serious objections. Upon reflection, it may be inadvisable to indicate a maximum price, which might result also in the minimum price.
As you realize, there has been a demand in the United States for the Government to take measures to maintain the price of cotton, and other farm products, and Congress, as a measure of relief, passed a bill for continued operation of the War Finance Corporation, but the Government did not otherwise attempt to stabilize the price of those products. Any artificial and unjustifiable increase in the price of sugar would create a most serious adverse public opinion and it is most advisable that our position be made very clear to the President and to the Commission.
While we are opposed in principle to action for fixing or maintaining prices we do not feel justified in objecting to Cuba’s proposed policy within the limitations indicated in order to meet the present emergency we should not approve of such action as a continuous policy.