837.61351/2830: Telegram

The Secretary of State to the Chargé in Cuba (Briggs)

80. The question you raise in your 54, February 13, midnight, appears to the Department to be an internal one stemming from the sale of Cuban molasses at the price of the sugar content.

Nevertheless the Department is referring the question to the appropriate agencies, including the Treasury, the Defense Supplies Corporation and the War Production Board.

You may however be interested to know that the question of imported foreign alcohol has recently been examined by the Department at the instance of the Dominican Minister, under instructions, and of persons describing themselves as representing Cuban distilling interests. The Department has in the face of these approaches stated that the problem is within the jurisdiction of the Treasury which has informed the Department that foreign alcohol may not be withdrawn from bond for denaturing without payment of the internal revenue tax.

It has been learned furthermore that persons allegedly speaking for Cuban distillers who have discussed the possibility of selling Cuban alcohol in the United States with other Government agencies have been informed that the United States distilling industry is capable of manufacturing our total requirements of alcohol provided raw materials are available in a regular and adequate flow. In this connection you are informed that distillers of beverage alcohol employing [Page 317] domestic grains as raw material are beginning to convert to industrial alcohol production. (Can you obtain an accurate indication of Cuban alcohol capacity without new equipment?)