837.61351/237: Telegram
The Minister in Cuba ( Long ) to the Secretary of State
[Received April 1—3:35 a.m.]
56. Requirement of the Sugar Sales Commission decree is that Cuban sugar shall be marketed in an orderly way to meet every demand of refiners and at the current market price. Mr. Rionda, president of the Commission and speaking for it, says that there has been a rigid compliance with this requirement and submits report to General Crowder, dated March 29th,96 which is being transmitted to Department in pouch leaving tomorrow instead of Saturday because of urgent nature of its contents. Actual sales by the Commission have not run as high as was hoped. Following seem to be at least some of the reasons therefor.
- [1.]
- Arbuckle has signified his intention not to buy from the Sugar Sales Commission but makes efforts through Diego and Munoz in Havana and one New York broker to purchase 200 tons of Cuban raw. The Commission feels that Arbuckle ought not to be entitled to any preferential treatment.
- 2.
- Dummies are buying in Cuban raw sugar notwithstanding the fact that they cannot get a permit to ship. While there is not at [Page 800] present sufficient evidence to prove it the indications are that these purchases are being made in the hope that Sales Commission decree will be revoked because of pressure Arbuckle and probably other refiners will be able to bring to bear. In this event it is feared that Cuban sugar will be dumped on the American market presumably at prices far below what it would command in today’s market unless indeed Arbuckle and associates supposed to be the Federal Sugar Refining Company could manipulate the price to suit their desires.
Request investigation from the standpoint of American refiners and particularly Arbuckle’s connection with any attempted boycott on Cuban sugars.
Sugar Sales Commission decree was a measure of relief for another acute industrial crisis. It was intended to bring about the orderly marketing of the Cuban sugar and by that means an inflow of money which would enable the banks to make the necessary advances to continue to grind throughout the present season. If the accomplishment of this great purpose is threatened we should know without delay where the responsibility lies. Since the formation of the Sugar Financial Commission grinding has been progressing favorably all conditions considered. Those who are unworthy of credit are said to be the only ones who have been unable to get the necessary financing with which to harvest their crop.
A wave of alarm has recently been produced by rumors to the effect that the life of the Commission might be terminated abruptly or the price of sugar be reduced suddenly. Such is their effect that Mr. Beatty of the Royal Bank and Mr. Farnham of the National City, leave today for New York. Pending conferences to be held there early next week, their branch banks here have seriously curtailed advances to sugar mills. As both of these gentlemen sat in on the original conferences and are fully aware of the reasons for creating the Sugar Finance Commission, it is respectfully suggested that the Department telegraph their New York offices inviting these men to be present at a conference to be held before officials of the Government in order that the latest available information from a banker’s standpoint may be before the Department.
Mr. Hawley should [also?] in my opinion be similarly invited to speak for the transactions of the New York office of the Sugar Finance Commission before which conference it is expected that Rionda’s report covering the Commission’s transactions in Havana will be in Department’s hands. General Crowder concurs. This telegram should be considered in connection with my despatch number 813.97