The Secretary of State to the Chargé in Peru ( Dreyfus )

No. 919

Sir: Reference is made to the Embassy’s despatch No. 4624 of July 4 [1], 1936, reporting the observations of the Peruvian Foreign Minister with regard to points raised by the Embassy, in accordance with the Department’s telegram No. 28, of June 23, 1936, in connection with the pending Anglo-Peruvian Commercial Agreement. The despatch under reference cited four observations of the Foreign Minister with respect thereto.

You are authorized, in your discretion, to bring orally to the attention of the Foreign Minister the following observations of the Department relative to points two and three mentioned in the despatch under reference. You may state that the Ambassador (pursuant to the Department’s instruction No. 838 of November 21, 193539) had already explained to Dr. Concha in a clear and concise manner that existing legislation, particularly the Jones-Costigan Act governing the importation of sugar, rendered it impossible for this Government to give any assurances whatsoever, either in advance of or in connection with trade agreement negotiations, provided the present sugar legislation is in force at that time, that any quantity of sugar in excess of the quota already allotted to Peru would be permitted to enter the United States from that country. You may state further that the Ambassador directed the Foreign Minister’s attention to the fact that if the restrictions on sugar importations were removed there would be a return to a free market, and hence Peruvian sugar would have unrestricted quantitative entry into the United States.

In connection with the immediate foregoing you may wish to proffer the informal observation that recently drafted and projected legislation regarding sugar includes a section dealing with the matter of quota reallocations among the full-duty countries, which reads as follows:

“If, on the 1st day of August in any calendar year, the quota then in effect for any foreign country except Cuba has not been filled, the [Page 916] Secretary shall revise the quotas for all other foreign countries, except Cuba, by prorating the deficient quantity so determined to all other foreign countries, except Cuba, which have filled their quotas by such date, on the basis of the quotas then in effect, ability to supply additional sugar, and other pertinent factors.”

You may inform Dr. Ulloa y Sotomayer that, should this draft legislation become law and the quotas of the full-duty countries be not filled on the basis of the quotas in effect at the time, there might be a possibility of increasing the allotment to Peru, in accordance with the procedure provided for in the projected legislation. You may point out also that although the legislation in question did not pass the recent Congress, nevertheless it may be considered to be indicative of the liberal policy of this Government. Further, as evidencing the liberal administration of existing legislation, you may inform the Foreign Minister that on July 2, 1936, the Secretary of Agriculture authorized from the unallocated reserve the entry of 600,000 pounds of Peruvian sugar, over and above the quota allotted that country.

With further reference to point three of the Embassy’s despatch, it is desired that you again make it quite clear to the Foreign Minister that it is the Department’s considered opinion that the Jones-Costigan law is in no sense discriminatory, the sugar quotas established therein having been based upon the most representative three years of the period 1925–1933. You may recall that during two years of the base period (1925–1933) no Peruvian sugar was marketed in the United States and that in four other years less than two tons of Peruvian sugar were marketed annually.

In so far as the Foreign Minister’s objection to the quotas allotted Cuban sugar is concerned, you may point out that this quota allotment was made in the same manner as that to Peru. If he should mention the preferential tariff rate accorded sugar from Cuba, you may, if you deem it advisable, review in a very discreet and informal manner the circumstances out of which the special tariff relationship between the United States and Cuba has grown and point out that this relationship existed over a period of more than thirty years.

After communicating the above orally to the Minister of Foreign Affairs you should reiterate to him the observations embodied in the Department’s telegram No. 28 of June 23, and inform him that the Department is communicating with the Peruvian Ambassador in this matter, to which it attaches so much importance.

The Department will await the result of your informal representations with interest.

Very truly yours,

For the Secretary of State:
Sumner Welles
  1. Not printed.