837.61351/2185

Memorandum of Telephone Conversation, by the Assistant Chief of the Division of the American Republics (Briggs)

Ambassador Wright dictated the following translation of a memorandum given him informally this morning by Ambassador Martínez Fraga, who called at the Embassy with the Cuban Secretary of Agriculture:

“The abolition of the quota system is very grave for Cuba for the following reasons:

1.
The basis (razon de ser) of the Treaty of 1934 is destroyed.
2.
The Cuban Government will not be able to justify the keeping in force of the Treaty of 1934.
3.
The sugar industry in Cuba will find itself obliged either to restrict (production), i.e., renounce the eventual advantages of the war, or to compete freely in open competition in the American sugar market.

“Both systems constitute a leap in the dark. The solution of such a dangerous situation could be the urgent modification of the Treaty of 1934 permitting the customs tariff of 90 cents and the application to this tariff of the presidential privilege of reducing it.

“I consider it indispensable that both Governments clarify the confusion which has been created, declaring the immediate intention of modifying the treaty in the manner indicated.”

Ambassador Wright observed that although the language used in the penultimate paragraph was obscure in Spanish, the meaning was obviously that Cuba desired to have the duty returned to 90 cents, notwithstanding the suspension of the quota.

He said he had telephoned the foregoing at the urgent request of Dr. Martínez Fraga, who was aware that Mr. Welles was about to leave Washington and desired Mr. Welles to receive it at once.

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Mr. Wright said that the impression seemed general in Cuba (notwithstanding the clear statements which he had made in accordance with the Department’s telegram of September 11) that our action constituted “retaliation” against Cuba for the continued failure of the Cuban Government to act on the various matters—especially the Public Works Debt—in which we were interested. For example, he said that the newspaper Avance had suddenly come out last night in favor of settlement of the obligaciones,—action on which had again been promised by the Cuban Ambassador, this time at tomorrow’s session of the Senate. From other sources, including Dr. Mañas, Ambassador Wright hears that the Cubans are “in a negotiating mood”, and believe that something must be done to get the duty back to 90 cents if economic disaster is to be averted. Mr. Wright expressed the further opinion that although the matter would have to be handled with great delicacy, he was not sure that something effective could not shortly be done if we were in a position to make a proposal.