561.35E1A/116: Telegram

The Chargé in the United Kingdom ( Johnson ) to the Secretary of State

636. From American representatives at Sugar Council. Department’s 412, October 5, 7 p.m. When presenting report of Statistical Committee to the Council the Chairman of the Committee made remarks in the following tenor with respect to the Committee’s estimate that the United States would require 64,000 tons from the free market quotas. He referred to the fact that about 91,000 metric tons Philippine sugar had been recently reallotted to full duty countries of which the Dominican Republic received 23,000 and Peru 38,000 tons. This, he said, raised the question whether the whole or only a part of those amounts were being allotted in addition to their world quotas. He referred to private conversations at the time the International Agreement was drawn up where it was alleged the American representatives had said the United States only intended to allocate 10 to 20,000 tons to each country under article 9 (c). Therefore, according to the Committee’s estimate, only 40,000 tons fell under article 9 (c) and the remaining (39,000?) of the Philippine sugar had been added in the Committee’s report to the previous figure of 25,000.

The United States representatives stated the view that no authority existed for putting the 40,000 figures in a technical and official report.

The Peruvian delegate stated the opinion that the position should be taken as set out in the Agreement and that the 39,000 should not be included inasmuch as the matter was one between governments and not under the authority of the Council.

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The Dominican delegate expressed the view that the 40,000 ton calculation was arbitrary and should be omitted from the Committee’s report. Legally, he said, the decision rested with the United States and the other interested countries.

The United Kingdom delegate stated that Mr. Norman Davis, in private conversation, had talked of relatively “small” quantities under article 9 (c) and mentioned the figures of 10 or 20,000 tons. The 40,000 ton estimate in the Statistical Committee’s report therefore seemed reasonable but it mattered little as a practical question whether the United States free market requirements were increased or the free market supplies from Peru or the Dominican Republic reduced by the amount concerned.

United States representatives expressed their view that the wording of the official report should be consistent with the terms of the Agreement.

The Netherlands delegate recalled that his Government and many others had accepted article 9 (c) with great reluctance, which was not dissipated even after Mr. Norman Davis had declared privately that the quantities involved would be very small. The Netherlands delegate thought that the present discrimination raised a new anxiety. He hoped very much that the United States representatives might shortly give the Council information to confirm the reassurances that various delegations had from Mr. Norman Davis as to allotments under article 9 (c). He thought it would be useful if the various delegations could have all necessary information at hand when the Council meets since lack of such information impeded business by depriving the Council of information needed for making decisions.

The Peruvian delegate, speaking again, referred to his own numerous conversations with Mr. Norman Davis and other delegates of the United States, the Dominican Republic and Peru. The point of view of the American countries was that they should be quite free as regards their internal arrangements in view of the importance between those countries of economic and political relations.

The Chairman pointed out that the Council had been assured that of [the?] Statistical Committee did not pretend to prejudge anything within the jurisdiction of any country but that he felt some figure had to be assumed.

The Secretary of the Council proposed the following as a substitution in the Statistical Committee’s report for the explanation there given of the statistical item under discussion “Plus an estimated increase in the outlook on the American market of 39,000 tons.” The section to be deleted reads as follows: “Plus the amount allotted under section 204 (a) of the act in respect of the Philippine deficit to foreign [Page 962] countries paying full duty less an amount of 40,000 tons which it is understood the United States may allot to Peru and Santo Domingo under article 9 (c) of the International Sugar Agreement”.

The Peruvian delegate regretted that he could not accept this suggestion and repeated his desire that the calculation in the Committee’s report be made exactly as set out in article 9 (c).

The Dominican delegate agreed with the Peruvian and would not contemplate any solution other than strict application of article 9 (c).

The Polish delegate speaking as such and not as Chairman of the Statistical Committee said that in his opinion the Committee had the right and duty to submit to the Council the most accurate figures possible.

The United States representatives expressed no objection to any estimate that seemed wise but to expedite business pending official advice as to what the United States Government would do with reference to article 9 (c) suggested retaining preliminary estimate [of?] 25,000 with explanation that definite advice was still awaited.

Netherlands delegate objected on grounds that it would suggest that all of the additional allotments might be lost to the free market.

United States representatives offered reassurance that the suggestion did not imply that 25,000 was the final figure. Netherlands delegate agreed after suggesting the use of both figures alternatively.

Chairman stated that use of 25,000 figure resulted in excess quota figure of 100,000 tons.

Subsequently Peruvian delegate submitted to Council prepared statement:

“Last evening Dr. Hart17 stated that in conversation with Mr. Norman Davis during the Sugar Conference the latter had said it was only intended that small quantities—10 or 20 thousand tons—should be granted by the United States under article 9 (c) of the Convention.

Without doubting, of course, for one moment, Dr. Hart’s good faith I wish to state that there is no record of such limitation in the minutes of the proceedings of the Conference of [or?] its committees, nor was it mentioned to our delegation. On the contrary Peru only adhered to the Convention on the basis of the text of article 9 without any private or unofficial reservation of any kind whatsoever.”

The Netherlands delegate stated that while he did not wish to prolong the discussion he felt compelled to take exception to the Peruvian statement.

The Committee’s report was adopted in the form recommended by the Secretary of the Council as noted above. [Johnson and Taylor.]

  1. G. H. C. Hart, Netherland delegate on the International Sugar Council.