Office of the Historian

304. Memorandum From the Deputy Assistant Secretary of State for Economic Affairs (Beale) to Secretary of State Herter0

January 15, 1960.

SUBJECT

  • Status of Sugar Legislation

The Sugar Act of 1948,1 as amended, expires December 31, 1960. As Cuba is our predominant foreign supplier, consideration of recommendations to the Congress has been more difficult than usual. Preliminary exchanges of views have occurred during the past month with the domestic sugar industry and with the Department of Agriculture. Following these meetings E and ARA made certain recommendations to the Under Secretary as to a State Department position.2 The key point is a recommendation that the President be given discretionary authority to adjust the quotas of foreign countries should he determine this is in the national interest. This would permit a reduction in [Page 626] the Cuban quota whenever the Executive believed such action was warranted. The recommendations approved by Mr. Dillon are attached.

In our inter-departmental discussions, the major difference that developed between State and Agriculture concerned the method to be used in obtaining sugar in an amount equivalent to any reduction in the Cuban quota. Agriculture wanted to purchase the sugar on the world market, and take the profit which would result. Mr. Dillon was opposed to government purchase of sugar, preferring that some other method be used. At a meeting today with Mr. Paarlberg on this subject it was decided:

1.
To ask the Congress for Presidential authority to adjust the quotas of foreign countries when in the national interest or to secure dependable sources of sugar for the United States. The authority should be flexible enough to permit the Executive to obtain sugar in any manner deemed most feasible at the time.
2.
To draft a sugar bill covering this request and other desirable amendments immediately.
3.
To discuss this bill with Congressional leaders and with the domestic industry early next week.

Attachment3

[undated]

It is recommended that this Department take the following positions with respect to the extension and amendment of the Sugar Act:4

1.
That the legislation be extended for four years.
2.
That the legislation be amended to give the President discretionary authority to adjust the quotas of foreign countries, effective upon enactment.
3.
That this authority permit the President to obtain an amount of sugar equivalent to any reduction in a quota by assigning the reduction to other foreign sources or by other means, such as through auction of import licenses.
4.
In presenting its position to Congress the Administration should make clear its intention to recommend that the President use his discretionary authority for economic reasons to assure the sugar supply of the United States. In executive session the Administration should indicate that the decision will be taken in connection with the Administration’s over-all plans for dealing with the situation in Cuba.
5.
That the timing, form and content of a Presidential announcement to this effect should be determined immediately after agreement has been reached on the Administration’s position on sugar legislation.
6.
That in lieu of their right to participate in future Puerto Rican deficits, the quotas of the mainland cane and beet areas may be increased by not more than a total of 200,000 tons, although an effort should be made to restrict the quantity to 170,000 tons.
7.
That no change be made in the present refined sugar quotas.
8.
That an amendment be included which would allow the Secretary of Agriculture to reduce the quota of a foreign country for the remainder of the quota year by any quantity he determined the country was unlikely to export to meet its quota.

  1. Source: Department of State, Central Files, 811.235/1–1560. Confidential. Drafted by Paul E. Callanan of the Commodities Division of the Office of International Resources, and concurred in by Edwin E. Vallon, Deputy Director of the Office of Caribbean and Mexican Affairs.↩
  2. 61 Stat. 922.↩
  3. See attachment below.↩
  4. Confidential.↩
  5. A note on the source text indicates that Dillon approved these recommendations on January 1, 1960.↩