837.5017/44
The Assistant Secretary of State ( Acheson ) to the Deputy War Shipping Administrator ( Douglas )
My Dear Mr. Douglas: This Government has committed itself to an effort to stabilize for the remainder of the current calendar year, the landed cost of certain commodities important to the cost of living in Cuba. Wheat flour is one of the commodities involved.
In order to make the commitment regarding wheat flour effective, an arrangement has been made whereby domestic mills will contract during a two-week period, ending April 29, to deliver not more than 700,000 barrels of flour, at a base price not to exceed $6.90 per barrel, c. i. f. Habana. This base price relates to a movement through Tampa, and differentials in cost due to revised routing are for the account of the Cuban buyer.
The freight differentials arising out of a change in marine rates are also, by the custom of the trade, for the account of the buyer. However, an increased cost resulting from a revision of marine rates would violate the spirit and the letter of the arrangement that has been entered with the Cuban Government. War risk insurance is also for the account of the buyer, according to the custom of the trade, and this Government has given the Cuban Government an assurance that the rate for war risk insurance shall not exceed that in effect at present. Should there be a modification in marine freight rates or war risk rates, it would thus be incumbent upon some agency of this Government to compensate the Cuban buyer.
The Department understands that there is no current intention to modify either the freight rate or the war risk rate from United States ports to Cuban ports. However, it has been felt that you should be advised of the arrangements that have been made so that you will have knowledge of the difficulties that would arise should the question of these rates be considered at any time during the current calendar year.
Sincerely yours,