740.00112A European War 1939/27764: Airgram

The Secretary of State to the Chargé in Guatemala (Drew)

A–386. Your A–172, March 2617 and previous communications with reference to the formulation of a plan for disposing of the current Proclaimed List coffee crop. Also your despatch 3562 of February 2, 1943.17

The Department has been informed that the War Department is now interested in purchasing through a single contract for use in the United States the entire 1942/43 Guatemalan Proclaimed List coffee crop. This suggestion rests upon the fact that such coffee could be shipped directly to the West Coast, thus obviating the necessity of shipping coffee needed in that area by rail from the East Coast. The War Department has also informed the Department that it is prepared to pay current prices, and that, because of the size of the contract, it would prefer the contract to be handled by a single importer in [Page 355] this country, probably the same person that handled the War Department’s contract last year.

The Department perceives no objection to the purchase of the entire crop through a single contract for Army needs, provided (a) the negotiations for and the execution of such a contract are not permitted to jeopardize the successful conclusion of the formulation of a plan for eliminating any Proclaimed List interest in the coffee along the lines outlined in previous communications and (b) the Proclaimed List is not used as a means of securing better terms for the coffee than would otherwise be obtainable or to force a sale to the Army should the Banco Central desire to sell to other purchasers. In the latter connection it is understood that the War Department has been purchasing its coffee requirements in the open market without preferential treatment.

[Here follow procedural details concerning negotiations for an entire-crop purchase contract, and a discussion of coffee exports to Switzerland.]

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