Memorandum by Mr. George F. Scherer of the Division of the American Republics to the Assistant Chief of the Division (Walmsley)

Mr. Walmsley: Under date of May 25 the Embassy at Havana submitted report no. 698 on the price stabilization situation in Cuba;31 [Page 217] Special emphasis is laid on the prices of wheat, flour, hog lard and rice, which were guaranteed by this Government as far as its exports to Cuba are concerned.

After special arrangements for an increased subsidy were made by CCC,32 Cuba was able to contract for a sufficient amount of wheat flour to reach the end of the year without an increase in ceiling prices. The ceiling will be maintained although bakers are protesting the narrow margin between the cost of flour and the price of bread.

No trouble appears to lie ahead with regard to hog lard prices and supplies.

Rice has presented a real problem especially from the supply point of view. The freezing of sixty percent of stocks in the United States gulf area has removed Cuba’s normal supply of cheap rice. CCC and BEW33 prodded by State, have made successful efforts by supplying California rice at an apparently reasonable price and more California rice is to be made available. WSA34 has cooperated in giving a reduced freight rate to California rice and is making available transportation for the movement of certain Ecuadoran rice to Cuba.

It now appears that Cuba will reach the new Gulf shipping season of early October with satisfactory, though curtailed, rice stocks on hand.

Prices of other articles of Cuban production are being maintained within the Cuban ceilings with few exceptions, the most notable of which is beef, reported to be selling from ten to forty percent above ceiling. Since the date of the Embassy’s Attachéd report, a modest upward adjustment in the ceiling on beef products has been put into effect by ORPA.

  1. Not printed.
  2. Commodity Credit Corporation.
  3. Board of Economic Warfare.
  4. War Shipping Administration.