550.S1 Economic Commission/44: Telegram

The Acting Secretary of State to the Chairman of the American Delegation (Hull)

155. Your 130, July 13, 9 p.m. The President sympathizes with the efforts to stabilize the sugar market by limiting production and considers that the Cuban draft offers a satisfactory basis for discussion.

As stated in my telegram No. 125 of July 10 he feels, however, that regional treatment for world reduction is advisable. In view of the simultaneous discussions now in progress, here and in London, he believes that before accepting any proposal drawn up in London the outcome of the Washington conference should be awaited. The discussions here should reach some definite conclusion within the next few days.

It is noted that the Cuban draft leaves indefinite the extent of the limitation by the United Kingdom of homegrown sugar assisted by subsidies. I understand that the British subsidy agreement expires this year, and that the producers, out of a fear that the new subsidy agreements will abolish bounties for any expansion in the future, have made large plantings this year. Please inform the Department when quotas are proposed for this home-grown sugar.

There is a proposal for securing a voluntary limitation of production by the Philippines to their quota allotment in the American market and to the amount necessary to the home market. The Philippine delegates apparently have come to see the wisdom of selling a smaller amount at a higher price in the American market than by glutting the world market, which would probably cause a collapse in world prices, and now seem to be casting about for ways and means of effecting the necessary cuts.

Phillips