The Ambassador in Colombia ( Braden ) to the Secretary of State
[Received 11:20 p.m.]
313. Department’s 215, October 5. Excepting for those closely connected with the Coffee Federation and Government itself Colombians are uninformed on proposed Quota Convention. They only believe they will suffer from any limitations. They will resist and resent every sacrifice and under all circumstances will be critical of the Government.
Since Government is keeping details of these negotiations secret it would be unwise for us to discuss them with private persons closely associated with coffee trade. If we were to do so and it became known disagreeable repercussions might ensue.
In conversation I was able to have with leading American coffee trader in Medellin, October 6, he saw viewpoint of Colombians further complicated by: (1) Question as to whether Government would continue; (2) peso subsidy; (2)  fear that quotas would be made retroactive to July 1, 1940; (3)  hope situation would be further ameliorated by Export-Import Bank loan to carry stocks.
In conversations with Minister for Foreign Affairs this morning he considered last two points of minor importance. He reiterated statements reported in Wright’s telegram No. 303, October 1, emphasizing that unless Colombian Government could convince congressional [omission?] this country was receiving full cooperation from the United States by getting a quota equivalent to 20 percent of total quota for our market he would be blocked not alone on coffee but on entire foreign policy program including defense and Act of Habana.
I pointed to insignificant difference between 19.81 percent and 20 percent; to fact Colombia’s proposed quota had only been exceeded in United States purchases during 1938 and 1939, in the latter case by only 2,374 sacks; that it exceeded any 5-year average and was therefore at a peak; and if quota convention failed of accomplishment resulting conditions including dumping could be disastrous.
The Minister frankly recognized validity of all my arguments but declared “it was a matter of principle not to go below 20 percent”; indicated it was perhaps unfair to give “colonies” 300,000 sacks; and he could not justify Brazil with its large production on being reduced 20,000 sacks compared with 50,000 for Colombia.
I said perhaps Brazil had already taken substantial cut at New York whereas I had heard from purely private sources that certain other countries had objected that Colombia then obtained unduly large allotment. I repeated my previous arguments on economic fallacy of destroying [Page 405] accomplishment of convention for a difference of only 0.19 percent.
The conversation finally boiled down to the Minister’s declaration that the only defense of any quota which his Government could successfully make would be that Colombia would retain 20 percent of the total United States market.
When I pressed him he admitted that 300,150,000 or even less could be justified and would be accepted if that figure represented 20% of a given total.
The administration’s weakness and timidity may induce it arbitrarily to continue adamant on the “principle of 20%” even though it entail a breakdown of negotiations regardless of resulting disaster. While I presently can offer no encouragement I suggest I be kept as fully informed as possible on details of negotiations and particularly concerning manner in which figures were arrived at, quotas given to other countries, why Brazil received smaller reduction than Colombia, and reasons for increases to such countries as Peru which the Minister alleges are ridiculous since they are in excess of their production capacity. This type of information might be helpful.
[For the text of the Inter-American Coffee Agreement, signed at Washington, November 28, 1940, see Treaty Series No. 970, or 55 Stat. 1143. The Agreement was signed by the United States of America, Brazil, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Peru, and Venezuela; ratification of the United States deposited with the Pan American Union April 14, 1941; Agreement and Protocol proclaimed by the President of the United States April 15, 1941; Agreement effective April 16, 1941, by terms of the Protocol signed April 15, 1941.]