250. Memorandum From the Assistant Secretary of State for Economic Affairs (Waugh) to the Under Secretary of State (Hoover)2

SUBJECT:

  • Sugar Legislation

The marketing of sugar in the United States is controlled by quotas imposed on our domestic producers as well as foreign countries (primarily Cuba) by the Sugar Act of 1948,3 as amended. This Act expires December 31, 1956, however various segments of the domestic industry have been trying to reach agreement on a legislative proposal to amend the Sugar Act at this session of Congress. The beet sugar producers and the cane sugar producers have reached an agreement but so far a third important segment, the east coast refiners of foreign sugar, are unwilling to go along. The domestic sugar beet and sugar cane producers want increased quotas effective this year as their present productive capacity is in excess of the quantity they may legally market.4 Any increase in domestic quotas will of course reduce Cuba’s sales in this market. Cuba is already burdened with excess supplies and a shrinking world market.

Last week representatives of the beet and cane areas met with Secretary Benson and asked him to agree that (a) this session of Congress is the appropriate time for sugar legislation and (b) that he should take the lead in preparing legislation acceptable to the [Page 778]Executive Branch and the domestic industry. We are informed that Mr. Benson agreed subject to White House approval. On Friday of last week the same representatives of the industry met with Mr. Holland and me.5 They asked for our favorable consideration of the same two points they had raised with Mr. Benson. They were told that we would study the proposal.

  1. Source: Department of State, Central Files, 811.235/1–2555. Drafted by Callanan.
  2. P.L. 388, enacted August 8, 1947; for text, see 61 Stat. 922.
  3. The sugar industry’s proposals were discussed by Cale in a memorandum of January 13 to Holland. Cale wrote in part: “In summary, the current proposal is for an initial increase in the fixed domestic quota of only 75,000 tons and a 55% share of any increase in consumption above that level for domestic growers. This compares with a proposal last year for an increase of 115,000 in domestic quotas in 1955, a further increase of 110,000 tons in 1956, and a 55% share of all increases in consumption after 1956.” (Department of State, Central Files, 811.318/1–1355)
  4. Details of this meeting held on January 21, were described in a memorandum of conversation of the same date by Callanan, (Ibid., 811.235/1–2155)