313. Memorandum of a Conversation, Washington, June 1, 19591
- Sugar Legislation
- Donald Paarlberg, White House Staff
- Phillip Areeda, White House Staff
- True Morse, Assistant Secretary of Agriculture
- Marvin McLain, Assistant Secretary of Agriculture
- Lawrence Myers, Chief, Sugar Division, Department of Agriculture
- Roy Rubottom, Jr., Assistant Secretary for Inter-American Affairs
- Thomas Mann, Department of State
- Harry Turkel, Director, Regional Economic Affairs, Department of State
- Jean Mulliken, Office of Regional Economic Affairs, Department of State
- Jack Button, Commodities Division, Department of State
- Colonel Paul Cullen, Secretary, Committee [Council] on Foreign Economic Policy
Agriculture officials took the position that the Administration should support extension of the Sugar Act during the current session of Congress, in accordance with the President’s recommended legislative program, despite recent developments in Cuba. They had learned with surprise that the State Department favored deferral of action until next year since, in their opinion, Cuban developments strengthened the case for prompt action. Cuba’s land reform law, if placed in effect, they said, might reduce sugar production to such an extent that Cuba will be unable to meet its quota for the U.S. market after 1960. Plans should therefore be made now to meet such a contingency by amending the Sugar Act to give the Administrator discretionary authority to adjust quotas when necessary to assure an adequate supply for the U.S. market.
There is little flexibility in the present law. Although sugar legislation does not expire until January 1, 1961 it has been customary to extend the law with a year’s lead time, since the production cycle for sugar cane is 18 months at a minimum. Another consideration is Agriculture’s desire to avoid Congressional debate on the Sugar Act in [Page 518] a presidential election year. They expressed doubt that the Cuban situation would be any clearer next year than now, and therefore doubt that benefits from the standpoint of foreign policy would counterbalance the disadvantages from the standpoint of domestic agricultural policy of deferring action.
Mr. Rubottom took the reverse position, stating that little would be lost by waiting until next year and much might be gained. He did not wish to see the Act extended without change at the present time since it would be interpreted by Castro as vindication of his statement that the U.S. would never reduce Cuba’s sugar quota in retaliation for expropriation of U.S. properties under the Land Reform Law. Mr. Rubottom said he wished to keep the question open in order to provide leverage in obtaining amendments to the land reform proposals. He was well aware of the need for protecting U.S. sugar consumers and had called in the Cuban Ambassador2 and informed him that if the land reform measures impaired Cuba’s ability to fill its quota this Government would be obliged to obtain sugar elsewhere. He had also called Ambassador Bonsal up from Cuba to meet with representatives of American sugar interests facing expropriation in Cuba, who were urging the Government to take a public stand on the issue.3 After careful consideration of all aspects of the problem, State could not recommend action this year on the Sugar Act.
There is strong anti-Castro sentiment on the part of some members of Congress. If the question were debated now, with expropriation of American property threatened, it might lead to unwarranted reductions in the Cuban quota and antagonize moderate forces in Cuba which are supporting U.S. efforts to obtain amelioration of provisions of the land reform bill which are detrimental to U.S. interests. He commented that public criticism of Castro is likely to be counter-productive, and urged that any implication that the U.S. will take punitive action against Cuba be avoided until all other remedies have been exhausted.
Mr. Morse said Agriculture, and the domestic industry as well, favored extension of the bill without change in quotas and had usually been able to obtain passage of legislation in the form they recommended. Only the provision for added authority to adjust quotas to meet a prospective shortage of sugar would be new, and he thought such an amendment would not be controversial.
Mr. Rubottom and Mr. Paarlberg considered it unlikely that the bill could clear Congress at this time without debate, even if the domestic sugar industry is in complete accord on the bill. Mr. Rubottom [Page 519] also foresaw problems in the future with many countries which have requested an increase in their sugar quotas if quotas are subject to adjustment by the Administration instead of being fixed by legislative action.
Mr. Mann said he could not support a bill which would assure Cuba 70% of all U.S. sugar imports for a period of years at a time when $800 million of U.S. investments in Cuba are threatened. The Administration would lay itself open to charges that it is “soft on communism” and is not adequately protecting American interests abroad. The U.S. has investments totaling $9 billion in Latin America, and every country in the hemisphere is watching to see what U.S. reaction to Cuba’s expropriation will be. The Administration needs to maintain a strong bargaining position vis-à-vis Cuba and sugar is the point at which Cuba is most vulnerable. He saw little merit in the argument that the Sugar Act would become a partisan issue if put forward to next year. Political lines are as sharply drawn in this Congress as they are likely to be in the next. He strongly opposed any action at the present time.
Mr. Morse said Agriculture merely wanted the question faced realistically, and if action were to be deferred he wanted it recognized that the decision rested on foreign policy considerations.
Mr. Paarlberg said he found the State Department’s arguments persuasive but thought the issue should be brought before the Committee [Council] on Foreign Economic Policy, where Treasury and other agencies which have an interest are represented and can express their views. Mr. Morse questioned whether the CFEP was the proper forum, since domestic as well as foreign policy issues are at stake. Mr. Paarlberg said he had raised the question informally at a meeting of White House staff and the initial reaction was to wait. Any recommendation of the CFEP would be reviewed by the White House from the standpoint of overall policy. He asked Mr. Cullen to place the item on the agenda for the CFEP meeting on Thursday, June 4,4 and asked State to report at that time on the outcome of Ambassador Bonsal’s discussions with Castro (an appointment had presumably been arranged for June 1), regarding the status of the land reform law and the reported one year deferral of expropriation of sugar lands.
- Source: Department of State, Central Files, 737.00/6–159. Official Use Only. Drafted by Mulliken. The place and time of the meeting are not indicated.↩
- See Document 310.↩
- The memorandum of this conversation is not printed. (Department of State, Central Files, 837.16/5–2559)↩
- The meeting was postponed to June 5. See infra. ↩