837.61351/11–1444: Telegram
The Acting Secretary of State to the Ambassador in Cuba (Braden)
884. At meeting November 13 with Cuban Commission FEA representatives outlined following molasses and alcohol proposal which paralleled closely August offer: United States purchase of 80 million gallons blackstrap molasses at 13.6 cents per gallon and 12.5 million gallons of industrial alcohol at 50 cents per gallon leaving 85 million and 25 million gallons available for carburante, etc. and beverage use respectively. Offer is for 1945 production only.
FEA emphasized easing in molasses situation owing to heavy United States grain production and desirability, from Cuban economic viewpoint, of rapid adjustment of blackstrap price to position in postwar world in competition with grains and petroleum for alcohol production.
Cubans made no comment on molasses and alcohol proposal but reviewed informally (without submitting written memorandum) sugar proposal presented by CCC on November 11.52 Principal points of disagreement were: (1) Price of 3 cents not acceptable; (2) 1946 sale to be 5.25 million short tons, equalling CCC’s 1945 limit (instead of 3 million); (3) quantities for local consumption and export sugar to be in long tons instead of short tons; (4) Puerto Rican price (including subsidy) not accepted as ceiling on Cuban price; (5) CCC to continue paying for unusual movement of sugar within Cuba; and (6) Exchange of notes on maintenance of stevedoring wages requested as previously.
Members of the United States delegation then reviewed course of negotiations mentioning the substantial concessions made by United States such as 35 point price increase, use of cost of living index, increase in local consumption quantity, stabilization at present prices, and free or export sugar. The only Cuban concession appeared to be a price reduction from 3.40 to 3.25 and the Cuban attitude on the Resolution made negotiating extremely difficult. In the absence of any indication of compromises by the Cubans, Mr. Wilson stated there seems to be no need for further discussions.
Dr. Mañas stated that the commission is not bound by the Hacendados Resolution and indeed that the Hacendado members of the Cuban Commission had authorized Dr. Seiglie to offer a price of 3.15 if it were certain to be accepted by the United States, and this had been mentioned to Mr. Wilson.
Dr. Seiglie indicated he plans to have the Commission return at once to Habana for a brief recess, since they have got out of touch [Page 952] with Cuba. The recess should not by any means be considered a breaking of negotiations, said Seiglie. He is positive an agreement will be reached, but his group must return to Cuba for consultation and consideration of the United States proposal.
Mr. Wilson pointed out that it might be possible to compromise in a few minor points but that our proposed price, our views on Puerto Rico as a ceiling, and our inability to assume increased stevedoring costs are final.
Señor Santiesteban, on behalf of the Colonos, suggested the possibility of a purchase of an overall total of sugar from both the 1945 and 1946 crops.
On November 14 the Cuban Commission proposed that an overall total of 9,250,000 short tons of sugar be sold from both crops (total 1945 crop is estimated at 4.4 million short tons).
The United States Commission viewpoint of using Caribbean possession (Puerto Rican) price as a limit on the Cuban price was accepted by the Cubans.
Further discussion ensued concerning the cost of moving sugar within Cuba and of a possible increase on stevedoring wages.
Although the United States Commission reiterated flatly that this Government could accept no price over 3.00 cents, Dr. Mañas stated, on behalf of the Hacendado delegates, that they can accept nothing below 3.15 cents. Señor Santiesteban also stated, for the Colonos, that certain factors in the proposal would require him to recommend its rejection to the Colonos Assembly on November 21, no matter what the price may be.
Members of the Cuban Commission plan to leave on November 14 and 15. Dr. Seiglie will present his views to his Government. Meanwhile United States Commission will discuss overall purchase of both crops and other points in dispute.
- The proposal referred to is a memorandum, submitted by the American Commission to the Cuban Commission on November 11, 1944. which included certain compromises worked out by the two Commissions (837.61351/11–2544).↩