257. Memorandum of a Conversation, Washington, February 2, 19551

SUBJECT

  • Revision of Sugar Act

PARTICIPANTS

  • Department of Agriculture
  • Under Secretary Morse
  • Assistant Secretary McConnell
  • Mr. Thomas Allen2
  • Department of State
  • Assistant Secretary Waugh
  • Assistant Secretary Holland
  • AR—Mr. Randall
  • IRD—Mr. Callanan

Mr. Morse opened the meeting by saying that he assumed everyone present was familiar with the recent developments on sugar. He then reviewed the sugar industry’s attempt last summer to secure Executive branch approval of legislation, and he mentioned the fact that several bills to increase domestic quotas had been introduced at the last session of Congress.

Mr. Morse said he wanted first to clean up a few points, one of which was State’s attitude toward dealing with sugar legislation in this session of Congress. Secondly, he wanted State’s view on what changes should be made in the legislation. Mr. Morse said that the various accounts of the White House discussion on sugar with several Senators and Congressmen had started a great deal of speculation over just what the President had said and whether or not there would be any change in present legislation during 1955 and 1956. Mr. McConnell added the comment that we were faced with a very powerful political bloc which was determined to deal with the Sugar Act this year. Mr. Morse added that the question seemed to be how fast we could put any changes in legislation into effect, and emphasized that there was very strong pressure to make such changes effective this year.

Mr. Waugh said that he understood the President told the Congressmen there was no objection to sugar legislation this year. He also understood that although the President had no objection to the enactment of legislation this year, the President was opposed to such legislation being effective before the end of the present Act. Mr. Waugh said that State wanted to make sure that Agriculture [Page 787]officials were clear on just what the President had said. Mr. Morse readily admitted that they were not clear on what decisions had been taken at the White House. He was, however, familiar with what Senator Millikin said to the press on leaving the White House. Mr. Waugh spoke of the desirability of clarifying the position toward sugar legislation. He said that State had heard from the White House with regard to the meeting, and he proceeded to read Secretary Dulles’s memorandum3 which he informed the group was based on a note in the President’s own handwriting. He also read the group excerpts from the memorandum of conversation which Mr. Kalijarvi had with Dr. Hauge.4

Mr. Morse immediately questioned the use of the word “contract” and “agreement” which appeared in the documents. He said that the industry maintained there was no contract with Cuba or anyone else and that the Legislative branch of the Government can amend any legislation at any time. He went on to admit the desirability of getting a clarification of the President’s position before any further action was taken by the two agencies. Mr. Morse noted there did not seem to be any disagreement on legislation this year, and that the difference between State and Agriculture had to do with the effective date of new legislation. Mr. Morse said that there was a need for some changes in the administrative and technical provisions of the Act but that there was no emergency about that. There was a need, however, to give the industry some immediate relief from their present difficult situation. Mr. Morse asked if there was any possibility that the President had taken a decision without having sufficient information before him. Mr. Waugh said he did not know, but that he did consider State had clear instructions as to what the President wanted done.

Mr. Holland said that with regard to there being a contract with the Cubans, he thought it perfectly obvious that no legally binding [Page 788]agreement or commitment was made. He did consider, however, that this Government had a moral obligation to allow the present Sugar Act to run its course. A discussion of the circumstances under which legislation was enacted in 1951 followed. Mr. Callanan said he understood the Cubans had been told they would be able, over the 4 year life of the new Act, to recoup the immediate loss they suffered by the increase in the Puerto Rican quota. He pointed out that this was a perfectly natural thing to say in answering protests of the Cuban government with regard to their reduced participation.

Mr. Morse said that the Department of Agriculture had to contend with criticism that they were not protecting the interest of the American farmer and had to be careful that they did not encourage this type of criticism by appearing to act only in the interest of foreign producers. Mr. Callanan pointed out that the domestic growers received subsidy payments each year to compensate them for the restriction placed on their production. They receive these payments whether or not restrictions were actually imposed. In fact, this year would be the first year since 1948 that acreage restrictions were imposed. Mr. Morse answered by saying that in newly reclaimed areas of the west there is constant demand for sugar beet acreage. He said he couldn’t tell GI’s that all increases in U.S. consumption had to go to the Cubans. Mr. Callanan pointed out that no one in the State Department had ever said they were opposed to the principle of sharing future increases in U.S. consumption.

Mr. Holland repeated that he felt there was no binding obligation to Cuba to allow the present Act to run its course but that he did feel there was a strong moral obligation. He said he could readily understand why Cuba had been told in 1951 when she lost 170 thousand tons to Puerto Rico that Cuba would have 4 years in which to “get well”. He said he agreed that 1955 was the right year for sugar legislation. It would allow the Cubans to be told they would have 2 more years in which to get their house in order. They would thus have no grounds for complaint when new legislation became effective in 1957. He suggested that Mr. Morse determine what the President did or did not say. Mr. Morse replied that Agriculture would be very much concerned and embarrassed if the President had taken a decision without sufficient information. Mr. Waugh suggested that he ask Dr. Hauge what had happened as Dr. Hauge had been the only one present except the President. Mr. Morse questioned whether anyone should put the President on the spot if he had acted without proper information. Mr. Morse then told Mr. Holland flatly that Agriculture would not recognize any moral commitment to do anything for Cuba and the meeting broke up on this note.

[Page 789]

From the foregoing conversation three things are clear:

1.
Although the point was made repeatedly that Agriculture should obtain clarification of the situation at the White House, and Agriculture concurred, no indication was given by Mr. Morse that he would take any positive action.
2.
From the very beginning of the meeting it was apparent that Agriculture had already decided that the domestic industry should have immediate relief this year. The only reasons they advanced were the pressure of a very powerful political bloc and the fear of possible accusation that Agriculture was unwilling to do anything for American farmers.
3.
Mr. Morse’s statement that Agriculture would not recognize any moral commitment to Cuba is indicative that foreign policy considerations will play no part in Agriculture’s thinking on legislation.

  1. Source: Department of State, Central Files, 811.235/2–255. Official Use Only. Drafted by Callanan.
  2. Deputy Director, Sugar Division, Department of Agriculture.
  3. Document 255.
  4. Kalijarvi called Hauge on January 27 to ask for clarification of the President’s statement to the Congressmen. In his memorandum of the telephone conversation, dated January 27, concerning major agency responsibility for sugar legislation, Kalijarvi wrote:

    “Dr. Hauge said that the President made it clear that the responsibility for it was with the two departments—State and Agriculture. Dr. Hauge said that the President got across the idea that this would start work on legislation for 1957. There was no talk of changing the contract. He said they brought up two things: (1) to get legislation this year; and (2) they wanted Benson to be charged with responsibility. He said he did not know what the working arrangements would be but that it was definitely a two-department proposition. Mr. Kalijarvi asked Dr. Hauge if it was his judgment if any legislation would be enacted this year. Dr. Hauge said the present contract would be adhered to but that the President would be glad to get legislation to go into effect when the present legislation expires.” (Department of State, Sugar Files: Lot 65 D 212, Revision of Sugar Act, 1955, Mem. Con. I.)