272. Memorandum of Understanding Between the Department of State and the Department of Agriculture1


The following general propositions are agreed to with respect to the pending problem of sugar legislation: [Page 817]

The Administration should proceed to carry out the President’s intent as stated to the Senators and Congressmen from the sugar States some weeks back that sugar legislation should be enacted this year.
Hearings should be started in the House in time to provide adequate consideration there and in the Senate before the end of July.
There should be an Administration position, not separate State and Agriculture departmental positions.
The operation of the formula in the present law should not be disturbed during 1955.
Means should be found to provide some relief to domestic producers in 1955 from burdensome inventories.
New legislation to be passed this year should become effective in 1956.

With respect to more detailed considerations, these conclusions have been agreed to:

The Administration can support the principle of permitting the domestic industry to share in providing the increase in domestic consumption.
The Administration can support, effective next year, a position of sharing on a basis of fifty-five percent for the domestic suppliers and forty-five percent for foreign suppliers above an 8,350,000 ton level of prospective requirements.
A purchase program of 100,000 tons to help meet FOA requirements can be undertaken for the fiscal year beginning July 1, 1955 in such a way as to assist the domestic industry in dealing with its inventory problems.2

  1. Source: Eisenhower Library, White House Central Files. Secret. Sent to Under Secretary Hoover under cover of a memorandum of June 13 from Hauge to Hoover. The source text has signature lines for the Department of State and the Department of Agriculture but no signatures.
  2. An attached background paper on sugar legislation, which discusses the nature of the domestic surplus problem and the purchase program, is not printed.