Office of the Historian

837.61351/10–1745

Memorandum of Conversation, by the First Secretary of Embassy in the Dominican Republic (Scherer), Temporarily in Washington90

[Washington,] October 17, 1945.
  • [Participants:]
    • Cuban Delegation
      • Dr. Oscar Seiglie, Chairman
      • Senator José M. Casanova, Hacendados
      • Dr. Arturo Mañas, Hacendados
      • Sr. Gaston Godoy, Colonas
      • Dr. Teodoro Santiesteban
      • Dr. Oscar Albertini, Cuban Embassy
      • Sr. Manuel Rasco, Cuban Sugar Institute
    • American Delegation
      • Earl Wilson, CCC
      • James Marshall, CCC
      • Richard Burchard, Solicitor’s Office [Agriculture]
      • Mr. [Horace] Ritchie, Solicitor’s Office
      • Francis Linville, State
      • G. F. Scherer, State
      • Dr. Joshua Bernhardt, Agriculture
      • Gustave Burmeister
      • Mr. Fowler91

In reopening the Cuban sugar negotiations begun in Cuba during the summer, Mr. Earl Wilson welcomed the Cuban Commission briefly and got down to business at once.

He stated that the announcement of the finding of sugar in Java was not timed to influence the negotiations for the 1946 Cuban sugar crop. As a matter of fact, while the sugar is certainly on hand in Java, there are many complicating factors that will delay its availability.

[Page 944]

1946 Crop Only

As he had stated during previous negotiations, Mr. Wilson mentioned that the United States Government is anxious to get out of the sugar business as soon as possible without permitting recurrence of the wild speculation following World War I. Consequently, it is this Government’s wish to buy only the 1946 Cuban crop, but conditions might possibly work out so that the 1947 crop is needed, and in that case negotiations could be started early in 1946.

Mr. Wilson commented favorably on the 1947 crop prospects for Cuba indicating that there may be a demand in the United States for 2½ to 3 million more tons needed than the amount of 1945 consumption, which came to 6.1 million short tons.

Escalator Clause

Mr. Wilson stated that the customary escalator clause for an increase in the ceiling price would be included in a new contract.

Price

The price to Cuba would be based on equal treatment with Puerto Rico, less tariff preferences and the payments stipulated in the Sugar Act of 1937. Hence, the price would be 3.675 cents per pound, a total 102.5 points1 over the price of 2.65, which includes payments of 87.5 cents to Puerto Rican growers and labor and 15 cents to Puerto Rican mills.

Sr. Godoy asked if this price were final. Mr. Wilson replied that, while no final contract had been signed, several large Puerto Rican producers had indicated acceptance and CCC will not make any further increase to Puerto Rico.

Local Consumption of Sugar

Mr. Wilson stated that we are very disconcerted about the excessive use of Cuban sugar for local consumption. During the negotiations for the 1945 crop we received assurances (not legally binding, of course) that we could expect Cuba to return some of the 250 thousand long tons which had been earmarked for local Cuban use.

In spite of these assurances we have been asked to provide 50 thousand tons extra which request was disapproved. In spite of disapproval it now appears that 27 thousand tons have been over-drawn. It may be, according to Mr. Wilson, that this sugar has moved into [Page 945] black market hands and there ensued a discussion of 100 thousand bags of refined sugar belonging to Pedro Rodriquez.

Dr. Seiglie, Dr. Mañas and Sr. Rasco commented on various aspects of this sugar with the apparent conclusion that Sr. Rodriquez had produced it on a speculative basis. In general, Dr. Seiglie said that the Cuban Government had found it difficult to start controlling local consumption sugar in the middle of the year but that procedures had been developed which should eliminate almost every misuse of this domestic quota.

Free Export Sugar

Disappointment was expressed by Mr. Wilson at apparent infractions by other governments of agreements involving Cuban free export sugar. It was recalled that in granting Cuba a quantity of sugar for export to other countries, CCC requested arrangements be made so that other countries could not re-export the Cuban sugar or permit it to replace sugar sent to third countries.

Mr. Wilson showed two candy-mint wrappers stated to have been picked up in Washington which indicated Mexican and Argentine origins. Imports of sugar bearing products are now under control by the United States Government and it may no longer be possible for either Cubans or Americans to ship to this country products such as “honey marmalade” with allegedly 60 per cent honey and 40 per cent sugar when the 450 thousand gallon order made it perfectly apparent that there are not enough bees in Cuba to produce even a part of the honey needed for the shipment.

Reply Requested From Cubans

Since this Government has received no indication from Cuba concerning its position on Mr. Wilson’s June offer made in Habana, he asked that the Cuban Commission be prepared to reply at the next meeting. It was understood that the only change in the offer would be an increased price, resulting from increased subsidies proposed for Puerto Rico.

It was decided, in connection with statements to the press, that the Cubans might reply to press inquiries mentioning the general discussions and a price of 3.675 cents per pound, equivalent to the Puerto Rican basis. Future meetings would be held after the Cubans have a chance to consider the proposal.

The next meeting was scheduled for 10:30 a.m., October 19, 1945.

  1. George F. Scherer was in Washington for the sugar discussions because of his experience as a Department representative in preceding negotiations for purchase of the 1945 Cuban sugar crop.↩
  2. William A. Fowler, Chief of the Division of Commercial Policy, Department of State.↩
  3. A point is the equivalent of one hundredth of a cent.↩