561.333D3/3–1347

Memoramdum of Conversation, by Mr. Albert H. Gerberich of the Division of North and West Coast Affairs

Participants: IR—Mr. Edward G. Cale2
Mr. William H. Bray
CPA—Mr. Fred G. Heins
BA—Mr. Harold N. Midkiff
NWC—Mr. Albert H. Gerberich

Summary

Mr. Cale gave a review of the coffee situation since 1939 and explained that the Inter-American Coffee Agreement (of Nov. 28, 1940)3 will come up for renewal again on Sept. 30, 1947, and he wanted to hear what the feeling is regarding it.

After Mr. Cale’s introductory remarks, Mr. Midkiff stated that he could see little purpose in continuing the agreement, as there are no serious problems affecting coffee at the moment.

Mr. Cale said that this is correct, that prices are now extremely high (26¢ per lb. for Santos as compared with 6.38¢ in 1940, for example), and there seems to be no likelihood of a coffee surplus for some time to come, especially since Brazilian exports are down from 22 million bags per year to between 12 and 14 million. Furthermore, there are no quotas to be adjusted, since all OPA controls are off.

He added confidentially that Paul Daniels4 favors permitting the Agreement to lapse, but Mr. Cale fears that there will be some objection to this from the smaller producing countries, especially Guatemala. Mr. Daniels will be in the Department toward the end of March. The Inter-American Coffee Board will meet again in April, [Page 156] and perhaps Mr. Daniels can be present for another discussion before then.

The report on the world coffee situation called for under Article 3 of the Extension of the Agreement (of Jan. 6, 1947), has been completed, but Mr. Cale expressed himself as somewhat disappointed with it despite its length and detail.

(With regard to the improved conditions in the Colombian coffee industry this recent statement of Roberto Marulanda, Minister of National Economy, is of interest: “In 1946 the campesinos had to pay 4 arrobas of coffee for one machete; today they can get four machetes for one arroba.”)

  1. Associate Chief of the International Resources Division, and Chairman of the Inter-American Coffee Board.
  2. For text, see Department of State Treaty Series No. 970, or 55 Stat. (pt. 2) 1143. For documentation on the Third Pan American Coffee Conference, see Foreign Relations, 1940, vol. v, pp. 380 ff.
  3. Counselor of Embassy in Brazil and former Chairman of the Inter-American Coffee Board.