Foreign Relations of the United States: Diplomatic Papers, 1942, General; the British Commonwealth; the Far East, Volume I

561.321D1 Advisory Committee/109

The Secretary of Agriculture ( Wickard ) to the Secretary of State

Washington , April 17, 1942.

Dear Mr. Secretary: Reference is made to Mr. Acheson’s letter of March 5,¹⁶ with which was enclosed a copy of a proposed agreement between Brazil, Canada, and the United States in respect to the marketing of Brazilian and American cotton in Canada. You asked whether your Department is correct in understanding that this Department will be able, under existing legislation, to carry out the provisions of the proposed agreement and will have funds for meeting expenses, if any, which may be incurred by this Government under the agreement. You also asked whether the agreement as it now stands has the approval of this Department.

Since the date of the letter under reference, further discussions have been carried on with representatives of the Canadian and Brazilian Governments in which representatives of your Department participated. As a result of these discussions, it appears that the Brazilian and Canadian Governments are prepared to accept, with minor verbal modifications, the text as submitted with Mr. Acheson’s letter of March 5.

This Department found it necessary to indicate at the last meeting on this subject with the Canadians and Brazilians that it was not in a position to go ahead at that moment with the agreement for the reason that the House of Representatives had just included in the Department of Agriculture Appropriation Bill an amendment which has the effect of prohibiting this Department from releasing Commodity Credit Corporation cotton for export at a price lower than parity. This would mean, in effect, a difference of around eight cents per pound between the price of Brazilian cotton and the price of United States cotton in that country, a gap which we feel is too large to be bridged by direct subsidy payments to exporters. The Department of Agriculture Appropriation Bill is now pending in the Senate Appropriations Committee. It may be that the Senate will reverse the House action in this respect and that such change would be agreed to by the House in conference. In the meantime, it is our feeling that the question of going forward with the agreement should be left in abeyance.¹⁷

Sincerely yours,

Claude R. Wickard

16. Not printed.
17. There were no further negotiations. For text of the Department of Agriculture Appropriation Act of 1943, approved July 22, 1942, see 56 Stat. 664.