837.5017/10–1145: Airgram

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

A–1944. Embassy desires to submit following comments with respect to Cuban price stabilization activities, in case Cuban delegation in 1946–crop sugar negotiations asks for re-establishment of price stabilization concessions for shipments of United States rice wheat flour, and lard:

Cuban Office of Price Regulation and Supply at present is not enforcing effectively any ceiling prices for foodstuffs. Its activities have a restraining influence on inflationary price advances only insofar as a few large wholesalers, mainly affiliates of United States companies, observe ceiling prices because they would be vulnerable to discriminatory attack if they participated in the general noncompliance.
The ORPA because of internal dissension and public indifference is growing progressively weaker and prospects are negligible for its rehabilitation. Price ceilings for most foodstuffs probably [Page 941] will be continued in 1946 only as a matter of general policy with little actual enforcement if faced with inflationary pressure.
Any price concessions on our part, such as another special subsidy on wheat flour, will have negligible effect on the Cuban Government’s price policy or on the trend in cost of living.

It appears desirable therefore to omit price stabilization concessions in negotiating for the 1946 sugar crop. Presumably the above factors are supplemented also by changes in United States stabilization policies as a result of the war’s end.