The Chargé in Cuba ( Briggs ) to the Secretary of State
[Received 5:56 p.m.]
102. My telegram No. 98, March 3, 6 p.m.79 In reply to López Castro’s80 inquiry this morning whether I had received any news concerning the views of our Government on the sugar problem, I told him that although definite word had not thus far been forthcoming I know the matter is under very serious study by the various agencies of our Government now concerned and that he will find an understanding attitude when he reaches Washington.
Commenting on the general sugar situation here López Castro said that although the grinding of the crop is proceeding satisfactorily hacendados are beginning to complain that payment by the Defense Supplies Corporation81 is not forthcoming which in turn results from the fact that relatively little sugar is being transported and hence little paid for. He said this has already begun to create an unfavorable atmosphere among mill owners whose problem is complicated because of the increase in wages and colono payments which cannot be deferred. Many hacendados are accordingly having to obtain advances from the banks which are charging from 6 to 8 percent “against the certainty of Defense Supplies Corporation payments” which rates López Castro considers indefensible. He added that the matter had been taken up with the Habana clearing house with no success whatever and that he proposed to bring it to the attention of the Acting Secretary.
He went on to say that the Cuban Government and the hacendados sold the crop at a reasonable price to our Government not in the expectation of large profits to producers but in furtherance of the war effort; that being the case he fails to see why the banks should be demanding “inordinate profits” from a situation resulting from the shipping problem, over which Cuba has no control.