837.61351/2–2145: Telegram

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

117. Following is in reply to questions raised Deptel 118 of February 20, 8 p.m.

[Page 923]
Price control enforcement especially in Habana was very effective immediately after Grau’s inauguration62 and remained reasonably so until early February, but currently is deteriorating because of rising purchasing power during crop season and failure to provide ORPA63 with adequate personnel or organization to enforce price control measures throughout island (see also Embassy’s monthly reports on price stabilization). The Government, however, continues to display an active interest in price control and has demonstrated good faith not only by waiving duties on imported eggs and canned milk but also by establishing direct subsidy on wheat flour (see Embassy’s report No. 29 January 20, 194564). Principal danger is weak enforcement as ceiling price adjustments so far appeared justified by economic factors.
Future prospects without better organization are fair but not good. As we are committed to continue stabilization agreement in the event Cubans sign a sugar purchase contract at 3 cents with other terms satisfactory to United States, I suggest every effort be made to impress on Cuban Sugar Mission urgent need for effective price control organization to carry out a stabilization program. Meanwhile I will make a similar suggestion to Grau.
As participation in blackstrap proceeds was one of conditions made by Colonos meeting of November 28 (please see Embassy’s air-gram 2669, November 29, 10:30 a.m.64) for acceptance of proposed sugar contract, the satisfactory solution for them of this problem has doubtless made them more conciliatory. The negotiations should be further facilitated by our willingness to purchase 1946 molasses and a full 1946 crop. Colonos Association meeting scheduled for February 22 (see Embassy’s despatch No. 8835, February 2064) should furnish definite indication of their present views and will be reported by telegram.
Despite untimely press reports with Washington dateline (see despatch 8835) that a higher price may be possible, all interested parties here, including President, Hacendados, and Colonos, are now convinced that 3 cents is tops.
  1. Grau San Martín was inaugurated on October 10, 1944.
  2. Oficina de Regulación de Precios y Abastaeimientos (Cuba’s Office of Price Regulation and Supply).
  3. Not printed.
  4. Not printed.
  5. Not printed.