837.61351/11–1744: Telegram
The Acting Secretary of State to the Ambassador in Cuba (Braden)
889. With reference to current negotiations for Cuban sugar, molasses and alcohol, which were recessed on November 14 in order to permit the Cuban Delegation to return to Habana and review with the Cuban Government and sugar industry the complete proposal of November 11 presented by the American Delegation, the Department [Page 953] wishes to make several observations for your information and such use as may be appropriate.
The industry members of the Cuban sugar group appeared to be absolutely firm in accepting no price less than 3.15 cents per pound (although this price was never formally proposed by the Cubans), whereas Dr. Seiglie, speaking personally and informally at lunch stated that he would recommend acceptance of the United States price to President Grau. How strong his recommendation may be is uncertain. Mañas stated informally that the Hacendados would accept a price under 3.15 only at the direction of the government. Although Seiglie said later that he was empowered to accept a lower price he hesitated taking arbitrary action without further consultation with Grau. It is possible that as a result of the President’s reaction to the apparently uncompromising attitude of the sugar industry on the non-grinding mill problem, Grau and private sugar interests may find themselves diametrically opposed in connection with the sale of the 1945–1946 crops. Whether Dr. Grau’s political future and perhaps the political stability of Cuba might be placed in danger by a conflict with the sugar industry at the present time is a factor concerning which the Department will largely rely on you for judgment.
As mentioned in the Department’s previous messages the procurement agencies of this Government have shown no inclination whatsoever to offer any higher price than 3.00 cents per pound. As a matter of fact War Food officials have advised us that they have reached their absolute limit. They feel that no justification for a higher price has been shown and that very important concessions have already been granted the Cubans with few concessions on their part. A factor which has caused concern in Government circles here is the possible difficulty in the future of favorably presenting the Cuban case before interested committees of Congress when sugar legislation or other similar topics am under consideration. Cuba’s record in previous contracts of this war needs no support from any agency of this Government. However, on the basis of the Cuban position in the present negotiation it would be most difficult for the Department or other agencies in Washington to present a convincing case of Cuba’s need for a higher price than 3.00 cents.
The Department will be glad to have your comments on the foregoing and it would also welcome complete reports of the publicity given the sugar negotiations by the Cuban press.