Foreign Relations of the United States Diplomatic Papers, 1934, General, the British Commonwealth, Volume I

561.35E1/73

The American Delegation to the Preliminary Conference on Sugar to the Secretary of State

London, March 12, 1934.
[Received March 22.]

Sir: I have the honor to refer to my despatches No. 551, March 6th, and No. 558, March 9th, 1934,²⁵ transmitting reports of the meetings of the preliminary and exploratory conference on sugar, held in London March 5th-10th, 1934, and to supplement these enclosures with the attached reports²⁶ of the proceedings through Saturday, March 10th, when the conference adjourned.

As reported in my telegram No. 113, March 12, 12 noon,²⁶ the American delegation were very much of the opinion that the representatives of the Chadbourne countries were pleasantly surprised at the statement made on behalf of the United States. These representatives were likewise relieved by the very modest production in the Philippines suggested in the Proclamation of the Governor-General of the Philippines dated February 17th last.²⁷ However, these countries wished an assurance that neither the preliminary surplus in the Philippine Islands, nor excess production at any time during the life of a proposed Convention, should be sold on the world market.

It was obvious that the necessity of disposing of any sugar produced in the Philippine Islands on the world market would arise only from the admission into the United States of increased quantities of sugar from Cuba, thus withdrawing from the world market an amount of sugar at least equal to the amount which would be rendered surplus in the Philippine Islands. The reduction in the production of sugar under the American flag lost much of its appeal to the Chadbourne countries other than Cuba because its principal benefits were to accrue to Cuba. Furthermore, Philippine sugar thrown on the world market would be more directly in competition with Javan than other sugars. The Cuban delegates were naturally most grateful to the United States, but their gratitude did not go to the extent of accepting a diminution of its quota on the world market by such amounts as the Philippines might be forced to sell on the world market.

Even had it been possible categorically to say that no Philippine sugar would be sold on the world market it would not have brought about a condition of complete agreement, whereas it would have weakened the position of the United States in any future Conference on this subject.

The Netherlands’ position that no beneficial agreement could be made unless it included reductions in tariffs and bounties was really the rock on which the meeting was wrecked. Practically all of the other delegates pointed out the impracticability of bringing about changes in the tariffs and bounties designed to insure home production of sugar in the European countries, and it was even pointed out that the Netherlands itself was under the apparent necessity of adopting such methods to protect its home beet industry, notwithstanding its large production of cane sugar in Java. The insistence of the Dutch delegates on the necessity of adjusting tariffs and bounties at the next meeting made it evident that a great deal of preliminary work must be done before a new meeting could be contemplated.

The final conclusions of the Meeting, as stated in the minutes²⁸ thereof, were obviously the only conclusions possible.

Respectfully yours,

• Ray Atherton, Chairman
• Frank McIntyre
• Edward A. Foley

[Enclosure—Extract]

Report on Preliminary Meeting on the Coordination of Production and Marketing Sugar, London, 5–10 March, 1934

. . . . . . . . . . . . . .

The Meeting was thus compelled regretfully to conclude that there was not at present sufficient prospect of agreement among the Chadbourne countries to justify them in recommending at the moment the summoning of a further meeting. At the same time, they urged most strongly that the situation should continue to be watched carefully by the Bureau of Monetary and Economic Conference and by Lord Plymouth, as chairman of this meeting. Lord Plymouth expressed himself willing at any time to consider communications which might be made to him and to recommend appropriate further action if at any time it appeared to him that the following two conditions were fulfilled:

1. That the pending legislation on sugar had been passed²⁹ by the United States Congress; and

2. That as a result of further negotiations or any new developments, there appeared to be a real prospect of agreement on the division of quotas among the Chadbourne countries after the coming into operation of a general world agreement.

25. Neither printed.
26. Not printed.
26. Not printed.
27. Philippine Islands, Official Gazette, March 20, 1934, p. 776.
28. Enclosure, infra.
29. Jones-Costigan Act, approved May 9, 1934; 48 Stat. 670.