MID files, lot 56 D 569, “Sugar Act”

The Secretary of State to the Secretary of Agriculture ( Benson )1

confidential

Dear Mr. Secretary: I am seriously concerned to learn that [Page 901] United States sugar producers are advocating that the Sugar Act,2 which has run less than two years of its four-year extension be reopened to increase mainland cane and beet sugar quotas by 225,000 tons and to give domestic areas a 55 percent share in future increases in United States consumption requirements. These modifications would increase the participation of domestic areas almost entirely at the expense of Cuba. As you will recall, beginning only last year domestic quotas were increased by 176,000 tons and the percentage participation of full-duty countries was trebled, with a corresponding reduction of the participation of Cuba in this market.

The proposal of domestic sugar interests seems inconsistent with the understanding when the Sugar Act was last extended that quotas would not be changed during the four-year period of its extension in order to give foreign producers assurance of a stable United States market for a definite term and Cuba in particular the benefit of increases in United States consumption.

This loss was an attempt to compensate Cuba for the loss of approximately 240,000 tons of our market, and even this benefit would be lost if the Act is now further amended as proposed.

The proposal of the domestic sugar producers if adopted would seriously injure the Cuban economy, which is already suffering from severe curtailment of sugar production, greatly reduced exports and lower prices. It would inevitably be followed by decreased United States agricultural and industrial exports to this sixth best United States market and possibly by exchange controls and import restrictions. It would be inconsistent with our cooperation with Cuba to obtain an international sugar agreement, and bitter repayment for Cuba’s effective efforts, which United States producers have commended, to stabilize the sugar market. It would seem to ignore the fact that Cuba has been a reliable expansible source of sugar in both war and peace, a strategic concept which should not be jeopardized. Finally the proposed reduction of Cuban participation in our sugar market might easily tip the scales to cause revolution in Cuba, and would certainly increase instability and promote anti-American feeling and communist activity in an area of great strategic and economic importance to the United States.

The Department of State consequently opposes the proposed modification of the Sugar Act as prejudicial to our relations with the Republic of Cuba and inimical to the preservation of the important [Page 902] strategic and economic interest of the United States in Cuba and the entire Caribbean area.3

Sincerely yours,

[
John Foster Dulles
]
  1. The source text, which is neither initialed nor signed, was drafted by Paul E. Callahan of the Agricultural Products Staff, with the assistance of Mr. Wellman; the file copy, presumably a copy of the signed original, dated June 4, 1954, was not found in the Department of State files (811.235/6–154).
  2. Reference is to the Sugar Act of 1948 (Public Law 388), approved Aug. 8, 1947; for text, see 61 Stat. 922. The Sugar Act was extended and amended in Public Law 140, approved Sept.1, 1951; for text, see 65 Stat. 319.
  3. In a reply dated June 18, 1954, Secretary Benson stated that Secretary Dulles’ letter provided helpful guidance for the Department of Agriculture with respect to the conferences it was holding with representatives of the sugar industry. He further stated that it appeared that progress was being made toward achieving full consideration of the matter prior to any legislative action concerning sugar (811.235/6–1854).