611.236 Sugar/22

The Ambassador in Peru ( Dearing ) to the Secretary of State

No. 4865

Sir: I have the honor to refer to the Embassy’s despatch No. 4850 of December 12, 1936,15 regarding the sugar question and Peru’s desire for a larger import quota in the United States, and to inform the Department that the publication here of despatches from the [Page 906] United States regarding the fixing of import quotas for 1937, and the expenditure of some eighty million dollars or more for compensation to sugar planters, has galvanized this into new life. The Embassy feels that the preparation of a memorandum summarizing the situation in its various aspects by the Department of Agriculture and the Department of State would be of great benefit in clarifying the issue and in enabling the Embassy to meet the Peruvians’ initiatives, questions and objections.

A day or two ago the Counselor of the Embassy was asked by the Chief of the Diplomatic Division of the Foreign Office, during a call at that office, whether he had seen the article published in La Prensa of December 8, 1936—which forms the enclosure of the despatch under reference. Señor Bedoya informed Mr. Dreyfus that the Foreign Office was again being pressed by Peruvian sugar interests, and especially by the Gildemeisters, the Aspillagas and the Cohens, to take some active steps of a retaliatory nature against the United States. Their suggestion was, Señor Bedoya stated, that imports of American moving picture films or American automobiles be restricted to a certain quota, and their argument was that this would “wake up the United States”.

Mr. Dreyfus remarked to Señor Bedoya that he felt certain the Peruvian sugar planters would not be so insistent if they understood the situation better and if they would study and comprehend the difficulties of the sugar planters in the United States. Mr. Dreyfus called Señor Bedoya’s attention to the character of the Jones-Costigan bill; to the curtailed production of sugar in the United States required by this act; to the manner in which the quotas for various foreign countries were arrived at; and to the sums expended by the A. A. A.17 for sugar crop control in the Islands and on the Continent.

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

As the Department is aware, the Embassy—on the basis of such information as it has been able to collect—has made repeated representations, particularly to the President, and to Dr. Concha and Sr. Ulloa when they were in Lima, with regard to the factors controlling the action of our Government in this matter of the importation of foreign sugar.

The Embassy is aware of the bearing of the discriminatory clause in the Peruvian-British Trade Treaty18 upon American imports into Peru, and of the recently initiated efforts to bring about conversations at an early date between Cuban, Dominican and Peruvian representatives [Page 907] preliminary to a general conference of sugar interests to be held eventually in London to discuss the world sugar situation.

I may say, in passing, that Sr. Bedoya had not been informed of this phase of the matter, although the Peruvian Ambassador in Washington has been in correspondence with the Department on the subject. It would seem, therefore, that a careful exposition of the whole situation and of the chief factors controlling our policy, would be of great value in enabling the Embassy to inform interested Peruvians and in assisting it in keeping the atmosphere from becoming embittered. Some one will have to keep cool and deal with the facts if the question is to be properly worked out. Correct information and its friendly presentation seem most calculated to accomplish this purpose, and more than likely some resolution adopted at the Buenos Aires Conference having a bearing upon international trade and trade treaties will be of assistance.

The moment seems to have arrived, therefore, for the crystallization of the situation in a statement coming from the authoritative source, which can be used in the representations that will need to be made here in Peru. The Embassy trusts, therefore, that its suggestion will be adopted.

Two sidelights on the situation are:

1st. The statement by the German Chargé d’Affaires to Mr. Dreyfus that Germany is planning to take certain amounts of raw sugar from Peru for use in making Marzipan and candy. He conveyed the impression that Germany would be rewarded with something in return for doing so, and remarked that importations of German automobiles were beginning to increase.

The Embassy learns from the Commercial Attaché that German importations may amount to from thirty to fifty thousand tons, and that the Germans are counting rather confidently upon being able to get a good deal in return for the use of more Peruvian sugar.

The second development is the possibility that Mr. Sumner Welles19 will be able to return to the United States, after the Buenos Aires Conference, via the West Coast. Being fresh from the Conference, conscious of the results which might affect trade and sugar, having first-hand knowledge of our general problems, and having a thorough acquaintance with Cuban conditions, a meeting between Mr. Welles and President Benavides and possibly with the foremost sugar producers, might do more than almost anything else to clarify this troublesome issue and thus open the way not only for a solution of the sugar question, but for the negotiation of a general trade treaty and even for a better performance in taking care of service on Peruvian bonds held by American citizens.

[Page 908]

I have the honor to request the Department’s advice and instructions.

Respectfully yours,

Fred Morris Dearing
  1. Not printed.
  2. Agricultural Adjustment Administration.
  3. For correspondence on this subject see pp. 908 ff.
  4. Assistant Secretary of State.