811.5017/5–2346

Memorandum by the Assistant Secretary of State for the American Republics ( Braden ) and the Ambassador to Brazil ( Pawley ) to President Truman 6

Coffee is the main cash crop of a number of the American republics, including Brazil and Colombia, and the key to their economy. Coffee ceilings in the United States have been frozen since the beginning of the war. A three-cent subsidy was established last November and will expire June 30.

Costs of living and of coffee production have greatly increased in the producing countries, and these countries have repeatedly appealed to the United States Government for relief, asking that their product be treated on terms no less favorable than those accorded to domestic agricultural products. Prices of the latter have advanced an average of 40 percent since December 1941.

The coffee ceiling prices have become the greatest single irritant in our relations with the coffee producing countries. A way should be found of relieving the situation. The three-cent subsidy has not been sufficient, nor would a three-cent increase in the ceiling. A further increase is believed to be necessary in the interest of our foreign relations, unless the supply situation is found, on study by the Office of Price Administration, the Department of Agriculture, and the Department of State to justify a removal or suspension of the coffee ceilings entirely.

  1. Delivered undated to the President by Assistant Secretary Braden and Ambassador Pawley on May 23, 1946.