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

No. 3716

Sir: With reference to the pending request of Defense Supplies Corporation that the proportion of the sugar crop to be produced as invert be reduced from the equivalent of 1,200,000 tons to the equivalent of 700,000 tons, I have the honor to report that a number of mills have inquired whether there is any penalty involved at present for failing to produce the proportions indicated in the contract (two-thirds raw sugar, one-third invert). In this connection the Institute has informed the Hacendados Association as follows:

That there is no penalty against a mill which fails to make part of its crop in the form of invert molasses;

That the mill which makes more than the corresponding amount of invert “may be penalized or may encounter difficulties”;

That a company which controls two or more mills cannot produce a smaller proportion of invert in one mill in order to make a larger proportion in another. (This decision is of considerable importance to a number of companies, including Hershey and Compañía Azucarera Atlántica del Golfo, which assert that it would be more efficient and more economical for them to make their entire amount of invert in one mill and to devote the others exclusively to the production of raw sugar and blackstrap.)

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The question of reducing the proportion of invert is already becoming of urgent importance to many mills which are approaching the 67% mark, at which, under the original crop sale contract and under existing Cuban decrees promulgated pursuant thereto, they should switch to invert production. Although the request of Defense Supplies Corporation is of course now known by all producers, the delay in reaching final agreement as to the amendment of the contract has similarly delayed the issue of a new decree changing the proportions to 80%–20%. It is not improbable that some mills may switch to the production of invert, whereas others, taking it for granted that the contract will be amended as above, may continue with the production of raw sugar up to the anticipated 80% limit. Still others, such as Senator Casanova’s84 Central Orozco, are understood to have produced no raw sugar whatever thus far; should they continue with invert production, some adjustments will subsequently have to be made. There are of course certain unfortunate possibilities inherent in such a situation, and it is accordingly of the utmost importance that an agreement as to the amendment of the contract be reached at the earliest possible moment.

Respectfully yours,

Ellis O. Briggs
  1. José M. Casanova, president, Cuban Sugar Stabilization Institute.