837.61351/2–648
Memorandum of Telephone Conversation, by Mr. Leonard H. Price of the Division of Caribbean Affairs
Mr. Marshall telephoned this morning to relate recent developments in connection with the efforts of the Commodity Credit Corporation (Agriculture) to purchase sugar in Cuba. He said that the price of 4.5 cents per pound asked by the Cubans in Habana was so far out of line that it was not even worth considering and that he had, therefore, taken a plane immediately to return to his office in Washington.
Mr. Marshall said that yesterday afternoon at four o’clock Ambassador Belt paid an unexpected call on Secretary of Agriculture Anderson. He said that Belt expressed the opinion that he and Secretary [Page 548] Anderson could effect an early and mutually satisfactory arrangement for the purchase of Cuban sugar, if Mr. Anderson would accompany him to Habana by plane this morning. On the advice of Mr. Marshall, Mr. Anderson replied that in view of the price set by the Cubans in Habana during Mr. Marshall’s visit, it would serve no useful purpose for Mr. Anderson to go there at this particular time. Mr. Anderson suggested that if and when Ambassador Belt could make a definitive offer of Cuban sugar at a reasonable price, he take the matter up with Mr. Marshall directly. This concluded Ambassador Belt’s conference with Mr. Anderson.
Mr. Marshall said that later in the afternoon, at six o’clock, Ambassador Belt called at his office and immediately resumed his discussions regarding the possibility of an early sale of Cuban sugar to the CCC. Mr. Marshall said he told Ambassador Belt that the Department of Agriculture was not anxiously seeking sugar at this time but that if he could make a reasonable offer, Mr. Marshall would be glad to consider it. He said Ambassador Belt then suggested the price of 4.25. Upon Mr. Marshall’s refusal, Ambassador Belt suggested 4.10. When Mr. Marshall indicated that this price could not be considered, Ambassador Belt then indicated that if the Department of Agriculture would accept a price which did not include the figure “3” he would communicate such an offer directly to President Grau and felt that arrangements could be made for its immediate acceptance. This was, of course, an indirect suggestion that 4. be the agreed upon figure.
Mr. Marshall replied that he did not feel the Department of Agriculture would be justified in making such an offer, in view of declining prices in the sugar market. He referred in this connection to the quotation yesterday afternoon in the sugar market of 4.04. When Ambassador Belt said that this figure would be accepted, Mr. Marshall indicated that the Department of Agriculture had every reason to expect sugar prices to go even lower in the next few days. Mr. Marshall said he mentioned the possibility of 3.65 or 3.75.
In the course of the discussions, Mr. Marshall mentioned to Ambassador Belt that he had received two recent offers of sugar from Peru and Brazil respectively. He said that 55,000 short tons were offered by Peru at 4.10, but were not acceptable. He said that an even lower offer was made by Brazil on the basis of 35,000 tons. He pointed out to Ambassador Belt that these quantities would be sufficiently large to ease the pressure, if the Department of Agriculture chose to accept them.
Ambassador Belt suggested another meeting with Mr. Marshall today and the latter agreed. Mr. Marshall said that he then told [Page 549] Ambassador Belt that he was not trying to exert any pressure on him or on the Cuban Government in connection with the purchase of sugar, but that there were certain factors that had to be considered by the Department of Agriculture. Among these he said was the fact that a large delegation of beet sugar growers had recently visited the Department of Agriculture for the purpose of protesting the high level of sugar consumption which has been set as the basis for determining sugar import quotas. The beet sugar growers felt that the level was entirely too high and was having an undue influence on the domestic price of sugar. Mr. Marshall explained to Ambassador Belt that if it developed that the present level had to be lowered, this would, of course, result in a lowering of the quota of sugar imports from Cuba, with the consequence that Cuba would have more sugar to dispose of in markets other than the United States under its quota. Mr. Marshall went on to say that in connection with the efforts of this country to assist in the solution of the European food problem, pressure was being brought to bear on the Department of Agriculture by potato growing interests to effect arrangements for the dehydration of potatoes in large quantities for distribution in Europe. Mr. Marshall indicated that the Department of Agriculture would have to give in to this pressure unless more sugar became available for delivery to Europe.
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After relating the above Mr. Marshall inquired whether in the course of subsequent conversations which he had reason to expect would take place with Ambassador Belt, he should make any effort to tie in the purchase of sugar with the settlement of our outstanding problems with Cuba. I replied that present thinking in the Department was definitely against such a tie-in, on the ground that it might well give the impression of a “purchase” of the settlement of such problems.1 Mr. Marshall said he did not pretend to be an expert on such matters, but he could not help sharing the feeling that such an impression (i.e. of a “purchase”) was unavoidable if a tie-in were attempted. He said that on the basis of the information I had given him he would studiously avoid reference to outstanding problems in his discussions with Ambassador Belt.
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- In airgram 157, February 10, not printed, Ambassador Norweb suggested that before the United States accepted a Cuban price offer for sugar for occupied areas, “it would seem useful to inform them that in view of the stability afforded to Cuban sugar industry this year should price be accepted by us, Cuban Government in turn should cooperate with prompt settlement outstanding current problems that burden us” (837.61351/2–1048).↩