837.61351/1–945: Telegram

The Secretary of State to the Ambassador in Cuba ( Braden )

24. The present impasse in negotiations for Cuban sugar has caused concern on the part of procurement agencies here concerning the need for 1945 Cuban sugar in the near future. There may be only 300,000 tons of 1944 sugar on hand in Cuba by the end of January, if contemplated WSA36 shipping schedules are realized. You have undoubtedly discussed these projects with Norregaard.37

Based on your complete reports and on Earl Wilson’s38 visit to New York it is generally believed here that two principal obstacles, both internal Cuban problems, are delaying an agreement: 1. Possible wage increases and 2. Distribution of molasses proceeds. The uncertainty now so evident in the Cuban sugar industry might well be diminished, thereby increasing materially the prospects of an agreement, if President Grau were to make a final determination one way or, another with regard to both these matters. It is becoming increasingly evident that the Grau administration and the Cuban industry should face these problems fairly, frankly and speedily in the interests of Cuban political and economic stability. Kindly inform the Department whether you consider it would be profitable to explain these views to President Grau expressing the hope that a definitive position on both points will be taken by his administration. If such an approach appears desirable in your opinion, the Department would likewise be ready to talk with Ambassador Belt in the same vein, and it would appreciate your recommendation as to timing.

(In addition you may wish to consider the desirability of approaching individually the various members of the Cuban negotiating commission,39 with whom you have not already discussed these matters. The Department is informed that certain members of the sugar industry have received the impression, whether correct or not, that some of the Cuban commission members are piqued because their importance [Page 918] is being minimized, owing allegedly to the fact that they have not been included in recent discussions with you.)

For your own strictly confidential information, the procurement agencies are now considering the advisability of offering to buy a full 1946 sugar crop and an amount of molasses corresponding to the proposed 1945 purchase, with no alcohol for 1946. These concessions have been approved by Byrnes40 and Vinson41 who strongly oppose higher price. A proposal along these lines would be ready for use at the appropriate moment, perhaps as soon as the Cuban negotiators indicate informal acceptance of the three cent price. Your comments in this connection would be appreciated.

Stettinius
  1. War Shipping Administration.
  2. Nelson Norregaard, representative at Habana of the Commodity Credit Corporation, an agency of the United States Government within the Department of Agriculture.
  3. Director of the Sugar Branch of the Commodity Credit Corporation.
  4. The commission negotiating with the United States on the latter’s purchase of the 1945 and 1946 Cuban sugar crops.
  5. James F. Byrnes, Director, Office of War Mobilization.
  6. Fred M. Vinson, Director of Economic Stabilization.