837.61351/10–3144: Telegram
The Ambassador in Cuba (Braden) to the Secretary of State
[Received 9:15 p.m.]
957. I cannot too strongly urge that price stabilization be continued to support Cuba’s new administration and to prevent adverse political repercussions. Proximity of Cuba and large trade with United States increases importance of controlling inflation here. Moreover, inflation control was emphasized in all Washington discussions with President Grau and our wholehearted aid was offered. Cuba is now making intensive and honest efforts to reduce food prices and for United States to abandon aid now, as suggested in RD memorandum48 attached to Department’s instruction 4606 of October 27, might seriously embarrass Grau. (See Embassy’s report 1410 of October 30, 194448).
Wheat flour subsidy now particularly important in view of recent Cuban bread price reduction to 10 cents at bakeries. Additional subsidy to maintain this price apparently equals $2.75 million a year and without it bread price rise to 11 cents would be necessary. No rice subsidy required if Cuba raises short-grain ceiling price to 11 cents as we earlier agreed and if supplementary South American imports are necessary at higher prices, Cuba could subsidize. There is no problem of lard price or subsidy; quantity commitment should be global depending on possible imports from other sources. I note no reference to proposed cotton subsidy. Any stabilization agreement should cover Cuban domestic products as well. Further details by air mail.