837.61351/6–2846
The Chargé in Cuba (Woodward) to the
Secretary of State
restricted
No. 1809
Habana, June 28, 1946.
[Received July
2.]
Sir: I have the honor to refer to the
Department’s restricted airmail instruction no. 826 of June 25, 1946,
enclosing for transmission to Mr. Evaristo Sotolongo, the Acting
President of the Cuban Sugar Stabilization Institute, a letter dated
June 25, 1946, from Mr. James [Page 790]
H. Marshall, Director, Sugar Branch, Production and Marketing
Administration, Department of Agriculture, together with a suggested modus vivendi for the purchase of the 1946 Cuban
sugar crop. The letter and modus vivendi are in
reply to a communication addressed to Mr. Marshall by Mr. Sotolongo on
June 13, 1946, with which he transmitted a copy of a modus vivendi drafted by the Sugar Institute.
Mr. Marshall’s letter and its enclosure were delivered to the Executive
Committee of the Sugar Institute yesterday by Mr. Nelson Norregaard,
representative here of the Commodity Credit Corporation, and the
Committee’s reactions thereto are set forth in Mr. Norregaard’s enclosed
memorandum of June 27. It will be noted that the possibility that Mr.
Marshall’s letter be withdrawn was suggested to Mr. Norregaard, who,
however, informed the Committee that he had no authority to do so. It
will also be noted that the Committee was of the opinion that it would
be extremely difficult to accede to the changes suggested by Mr.
Marshall and that in view thereof, Mr. Norregaard was informed that Cuba
would discontinue loading sugar for the United States after July 1,
except in the case of vessels already assigned.
The Committee indicated that it would recommend that additional sales of
sugar be made to other countries and that the difference in price
between the sugars thus sold and the United States price be used to
finance sugars remaining unshipped as a result of the suspension of
shipments to the United States. Whether the Cuban Government will
actually adopt so drastic a measure remains to be seen but the
possibility that this may be merely a threat designed to force our hand
cannot be entirely disregarded.
It is of interest in connection with the foregoing that 1946 crop sugar
shipments to the United States up to June 15 have, according to Mr.
Norregaard, totalled 1,507,000 short tons of raw and about 150,000 short
tons of direct consumption sugar. Additional quantities have, of course,
been shipped since that date and, as of today, there are 25 vessels
assigned to load sugar here after July 1. Of
these, 5 are scheduled to lift sugar for foreign claimants while 20 will
lift sugar for the United States. The total amount of sugar that these
vessels will load is estimated at 155,000 short tons.
The Sugar Institute, as mentioned in the last paragraph of Mr.
Norregaard’s memorandum, proposes to reply officially to Mr. Marshall’s
letter and a copy of that reply, when received, will be forwarded to the
Department immediately.
Respectfully yours,
For the Chargé d’Affaires,
a.i.:
Albert F.
Nufer
Counselor of Embassy for Economic Affairs
[Enclosure]
Memorandum by the Representative of the
Commodity Credit Corporation in Cuba (Norregaard)
The counter modus vivendi, and Mr. James H.
Marshall’s letter in reply to the Sugar Institute, was delivered
this morning to the Executive Committee of the Institute. Those
attending were Messrs. Casanova, Mañas, Puyans, and Rasco. After the
letter was read by the Executive Committee, Dr. Mafias stated that
he wished that the letter could be withdrawn. However, I told him
that I was sure that was the way our Committee felt about the
situation and I had no authority to withdraw it.
Dr. Mañas and Senator Casanova explained at length the difficulty
that had been experienced in obtaining the agreement of the Hacendados, Colonos, Labor and the Cuban
Government to the modus vivendi, suggested by
the Institute on June 13, 1946. They stated that it would be
virtually impossible to now obtain their agreement to any further
changes therein.
They pointed out that the Institute, in suggesting this modus vivendi, was a body entirely apart from
the Cuban Commission which was recently negotiating the sale of the
crop in Washington and that the Institute had no legal right to
compromise the Industry as a whole. They also pointed out that the
figure of 4% increase in the cost of living index, as suggested by
Mr. Marshall, would not be accepted by Cuban Labor inasmuch as this
particular question was one of the important points in obtaining the
approval of Cuban Labor to this modus vivendi
They stated that any increase would have to begin at 1½% in order to
reflect any increase in cost of living, and not at 4% which would be
a protection against a general inflation. The 4% figure was accepted
by them last year because they had protection on the cost of
commodities sold by the U.S. to Cuba, but inasmuch as they no longer
have such protection, this clause is definitely meant to reflect any
increase in the cost of living.
Concerning candy, the Institute claims to have no control as this is
purely a matter that would have to be decided between the two
Governments.
The question of molasses and alcohol, they claim, is one of most
importance and that they could not consider any contract that did
not provide for the U.S. buying Cuban alcohol. The fact that the
U.S. seemed to have little interest in further deliveries of
molasses appeared to disturb them greatly. They also stated that the
President of the Republic, in every conference concerning the sale
of the crop has repeatedly insisted on protection of the distillery
and candy industries.
[Page 792]
Senator Casanova explained the tremendous difficulties that they
faced in acting as leaders of the industry and it has only been with
the utmost effort that they have been able to propose their modus vivendi.
The result of the above conference was that Cuba would discontinue
loading sugar for the U.S. after July 1st, with the exception of
those vessels already assigned. They stated that they would have to
recommend to the Government that they make sales of sugar to other
countries in excess of the 250,000 tons and that the excess price
obtained from such sales would be ample to finance sugars remaining
in warehouse in Cuba.
Concerning the 47,500 ton loan of 1945 crop sugar, they also stated
that this matter as well as the candy and alcohol was one that would
have to be settled between the two Governments as the Institute had
already made definite recommendations for the return of this sugar
out of the local consumption quota and also for the Government to
provide the funds with which to repay the Commodity Credit
Corporation for the difference in price.
The Executive Committee advised that Mr. Marshall’s letter would be
officially answered; however, they felt that they could not deviate
from the position taken in their conversation as set forth
above.
