Memorandum by the Agricultural Attaché in the United Kingdom (Taylor) to the Chargé (Atherton)8

At the invitation and request of the Earl of Plymouth, Parliamentary Under-Secretary, Mr. Davis9 and I called on him at 10:45 o’clock this morning. Mr. S. Caine, adviser to the Earl of Plymouth on sugar affairs, sat in the interview.

The Earl of Plymouth was interested to learn the present status of sugar legislation in the United States and what changes, if any, are likely to be made in the plan under which the United States is now operating with respect to sugar.

Mr. Davis stated that the Jones-Costigan Sugar Act,10 under which we have been operating, was separate and distinct from the Agricultural Adjustment Act, and was not directly affected by the Supreme Court decision of January 6th; that the marketing quotas to domestic producers, to insular possessions and to other exporters of sugar to the United States are considered to be valid exercise of the Federal Government’s power over interstate and foreign commerce, hence were not covered by the Court’s adverse finding; and that the expectation when he left the States was that the sugar operations would be continued, with some modifications to avoid direct conflict with the rule of law laid down by the Supreme Court.

Mr. Davis explained that the administration has recommended to Congress, a continuation of the ½¢ per pound excise tax as a part of the General Trading Revenue Bill; that direct contracts between the Federal Government and individual producers under which the producers would agree to limitation of acreage would not be continued in order to avoid conflict with the Supreme Court, but that the same general result could be secured in one of three ways which might be [Page 525] applied to 1937 and following years. For the current year plans are being made to handle the sugar areas in connection with the Soil Conservation Act.

The three ways Mr. Davis mentioned were:

Additional payments to producers not based on contract, but made upon the application of the producer after he had proved compliance with conditions as to acreage and so forth, announced in advance.
By marketing agreements entered into with sugar refiners in the beet and cane areas, by which the majority would agree to quota restrictions, whereupon orders could be issued requiring the minority to comply, or
By grants to States in which sugar is produced, each State in turn agreeing to contract with individual producers to secure whatever limitation in acreage is decided upon.

Lord Plymouth then asked whether there is any bar to our participation in an international sugar conference. Mr. Davis stated that from the standpoint of agriculture he knew of none. He mentioned the possibility, which he considers to be remote, that Congress may enact a new sugar law aimed to safeguard the plan against future difficulty on constitutional grounds. Upon adjournment of Congress, presumably in May, there will be no chance for additional legislation until Congress meets again in January, 1937. Therefore, we are in as good a position to sit in an international sugar conference now as at any time before Congress meets again. Mr. Davis stated his belief that the domestic sugar producers and refiners and the insular interests all appear to be reasonably satisfied with the operation of our sugar plan and desirous of its continuation. In expressing an opinion as to the willingness of our Government to participate in a sugar conference, Mr. Davis expressly limited his statement to the situation in the Department of Agriculture, reserving the general question for reference to the State Department through you.

C. C. Taylor
  1. Copy transmitted to the Department by the Chargé in his despatch No. 2103, April 7; received April 17.
  2. Chester C. Davis, Administrator of the Agricultural Adjustment Administration, U. S. Department of Agriculture.
  3. Approved May 9, 1934; 48 Stat. 670.