837.61351/3536a: Telegram

The Secretary of State to the Ambassador in Cuba ( Braden )

50. Reference the Ambassador’s telephone conversation with Duggan and Walmsley. Our views may be summarized as follows:

On December 17 the United States Commission presented to the Cuban Commission a definite detailed proposal regarding the 1943 Cuban sugar crop. During the ensuing 2 weeks discussions occurred out of which emerged two modifications, which were communicated to the Cuban Commission on January 1. On the following day the Under Secretary reaffirmed the proposal as amended.
The Cuban Commission was clearly given to understand that this was the maximum arrangement that this Government was prepared to enter into.
The Cuban Commission returned to Habana after informing us that it was going to consult with its Government in order to obtain its Government’s decision concerning our final proposal.
Your conversations with the Prime Minister have been of the greatest help in the sense of bringing out the probable reaction of the Cuban Government to our proposal.
Consistent with our understandings with the other agencies, however, we do not feel that the provisions of our proposal are subject to continuing negotiation. It is believed that the Cuban Commission itself left Washington with the impression that our proposition was final after talking with the Under Secretary. What we now await, therefore, is the decision of the Cuban Government as to the acceptability of our final proposition. We are prepared to start the negotiation of the contract immediately upon advice by the Cuban Government that the proposal is accepted.
While the Department and the other cooperating agencies believe we have gone as far as we can to meet the undefined Cuban [Page 343] desires, and are not disposed to enter into negotiations for modification of the proposal as finally presented, they do not, of course, exclude the possibility of rectifying any points of minor detail which may come up in the course of the discussion of the terms of the contract.

In résumé, what we would like to have now from the Cuban Government is a clear decision whether the proposal as presented is accepted, so that the drafting of the contract can be started at once.

For your strictly confidential information and not to be communicated to the Prime Minister, the Department is prepared to recommend to the other agencies the following modifications in our proposal:

An agreement to carry warehousing costs and insurance costs of unshipped sugar after June 30, 1944. The other agencies will undoubtedly insist upon and the Department may feel obliged to agree to a date of December 31, 1944, since that date was in fact used in an earlier draft of the contract.
A modification of point (d) of the General Terms in our memorandum of December 8, 1942 in the sense that the two Governments will consult together along the lines suggested by you in your telephone conversation.

The other two suggestions of the Prime Minister are not of a character which we would like to take up with the other agencies. With regard to inland transportation it would not be proper for this Government to be a party to an arrangement of possible prejudice to the interests of a legitimate United States interest in Cuba, namely, the Consolidated Railroads. The Cuban Government has the jurisdiction and faculties to adjust railroad freight rates at all times and is at complete liberty to act in this regard.

With regard to the proposal on the stockpile, the BEW has clearly and definitely indicated its unwillingness to increase the contribution to the stockpile. The Department perceives no reason why the proceeds from the purchase of molasses could not be dedicated to the cost of the stockpile, particularly since the purchase of this molasses represents to Cuba totally unexpected income.