256. Memorandum of a Conversation, Department of State, Washington, January 28, 19551

SUBJECT

  • Prospective U.S. Sugar Legislation.

PARTICIPANTS

  • ARA—Mr. Holland, Mr. Randall
  • Amedeo Lopez Castro, Pres. Natl. Development Commission of Cuba
  • Arturo Mañas, Secretary of Cuban Sugar Stabilization Institute
  • Amb. Aurelio F. Concheso, Embassy of Cuba

Ambassador Concheso expressed Cuban concern regarding current efforts in certain quarters in the U.S. to amend U.S. sugar legislation. Specifically he mentioned the visit Thursday of domestic sugar producers to President Eisenhower.

Mr. Lopez Castro outlined briefly the problems faced by Cuba, giving particular emphasis to the decrease over the three year period from December 31, 1951 to December 31, 1954 of some 170 million pesos in Cuban monetary reserves. He likewise stated that the loss of these reserves had been accelerated each of the last two years of the period, thus following closely the downward trend of Cuban production and sales. He stated that should this continue, as could hardly be avoided, should Cuban participation in the world or the U.S. sugar market continue downward, results could not be but disastrous to Cuba, both economically and politically.

Mr. Lopez Castro and Dr. Mañas reviewed the efforts of Cuba to meet the sugar problem through reduction of the crop from 7 million Spanish long tons in 1952 to 5 million in 1953 and 4,750,000 in 1954. Now, they explained, Cuban labor has accepted for the present sugar grinding season a 7½ per cent reduction in wages, which, with the additional reduction of the crop to 4,400,000 Spanish [Page 784]long tons, means a total reduction in income for the workers of approximately 15%.

Dr. Mañas further stated that the present outlook is of such seriousness that the Cuban Sugar Stabilization Institute has prepared two reports on its recommendations regarding this year’s crop. The basic recommendation justified a production for 1955 of no more than 3,770,000 Spanish long tons. Dr. Mañas pointed out that this report is confidential and remained in the Institute, one copy having been given to Mr. Lopez Castro as the official representative of the Cuban Government on sugar matters. The public report of the Institute recommended 4,400,000 Spanish long tons, using as a basis the total that could be justified for Cuban production under the London agreement. He stated that from the present outlook, with no change in U.S. sugar legislation, a production of 4.4 million tons would require financing of an additional reserve tonnage of at least 350,000 tons and possibly more. This extra reserve would need be financed at 2.77 cents per pound rather than at 3.08 cents as was done with the 1952 reserve.

Mr. Holland reviewed efforts of interested groups last year to amend U.S. sugar legislation. He referred to conversations with Amb. Concheso over the past year during which he had pointed out that the sugar question could only be one of constant struggle. He stated that he knew that Cuba had been well aware of this and had prepared for that struggle. He mentioned the need of recognizing the importance of related factors, since to ignore them might alienate support of the Cuban position. Specifically he mentioned the present situation with regard to Cuban rice import quotas.

Mr. Lopez Castro repeated the Cuban rice position as presented in Washington, making particular mention of the Cuban policy, there stated, to purchase all of its rice imports from the U.S. It was pointed out to Mr. Lopez Castro that announcement had been anticipated by February 1 of a deficit rice quota by Cuba and that word had been received that Cuba would be announcing that it needed no more imported rice during the remainder of the so-called rice year which would end July 1, 1955. It was mentioned that such an announcement would probably bring strong criticism from certain sections and would make more difficult the position of others in the U.S. generally sympathetic with the Cuban rice policy. Mr. Lopez Castro stated that there had apparently been some confusion as regards the date of February 1. In proposing it he had thought in terms of February 1 as the date which would be considered for announcement of future deficit quotas after amendment of the [Page 785]present rice agreement2 had been negotiated. Unavoidable delay has occurred in the initiation of these negotiations which will now begin in Habana on February 9. He feels that until discussion of changes in the present rice agreement have been held, Cuba will not be able to announce with assurance, either that any more rice is needed during the remainder of the present rice year, or to specify the amount that she might need. Cuba feels that it would be first necessary to know the date to be selected for the opening of the new “so-called” rice year.

Mr. Holland stated that rice was mentioned only as a question in point of the importance that must be given to each factor that would eventually affect the decision of the Congress regarding sugar legislation. He told Amb. Concheso that Cuba need not be preoccupied by the outcome of the meeting of domestic representatives with President Eisenhower. The President, he stated, had informed the representatives that the entire question of sugar and the advisability of undertaking new legislation would be given careful and full study before any definite position would be taken by the Executive. In such study, the President, of course, had assured the domestic sugar representatives that their point of view would be given appropriate consideration.

  1. Source: Department of State, Central Files, 811.235/1–2855. Official Use Only. Drafted by Randall on January 31. Initialed by Holland.
  2. Reference is to the joint agreement on rice between the Governments of the United States and Cuba which entered into force on December 17, 1952, establishing a method for determining Cuba’s annual rice import quota in connection with a General Agreement on Tariffs and Trade (GATT) concession on rice.