324. Memorandum of a Conversation, Department of State, Washington, June 24, 1959, 2:40–3 p.m.1
SUBJECT
- Cuban Agrarian Reform Program
PARTICIPANTS
- The Secretary
- Mr. Robert Kleberg, Proprietor of the King Ranch in Texas
- Mr. Jack Malone, Manager of Mr. Kleberg’s Cuban Properties
- ARA—Mr. William P. Snow
Having recently spoken with the Secretary of the Treasury, Robert Anderson, about the agrarian reform law in Cuba and its probable effect on U.S. private investment in that country, Mr. Kleberg had asked to see Secretary Herter in order to present the subject to him and to offer certain suggestions with regard to U.S. policy toward Cuba. He [Page 540] introduced Mr. Malone as the manager of his Cuban properties, which involve an investment of some three million dollars in the cattle industry in Camaguey Province.
The agrarian reform program, unless very materially changed, he said, would not only cause him to lose virtually his entire investment but would fall with equal weight upon all other American landowners, including the large and well-known American-owned sugar companies. If this were not enough, there was also the clear indication that the Castro land reform movement was Communist-inspired, if not directed, and that its fulfillment could be expected not only to render normal relations impossible between our country and Cuba but might well bring about a Communist-controlled nation close to our shores.
Earlier in the week he had called upon Cardinal Spellman in New York to seek his advice. The Cardinal had expressed deep concern over the Communist trend in Cuba, which appeared to be associated with the rise of Fidel Castro to power. He had described Castro as being insane and therefore impossible to work with. Mr. Kleberg had prepared a memorandum of this conversation with the Cardinal, a copy of which he presented to the Secretary with the request that it be treated very confidentially (attachment No. 12).
He then described an interview on June 23 (the following day) with Herbert Matthews of the New York Times staff. He had first approached Arthur Hays Sulzberger, had been referred to the editorial page editor, Charles Merz, and had been introduced by the latter to Herbert Matthews. Mr. Merz sat through the entire conversation, a memorandum of which Mr. Kleberg also gave the Secretary (attachment No. 2). Matthews had acknowledged that Castro was immature and at times irrational. He was going to Cuba early in July to learn for himself in what direction the Government was now moving, and he characterized the agrarian law as being quite unsound as it stood, although not necessarily beyond repair.
A third paper handed to the Secretary (attachment No. 3) contained the text in translation of a statement made in Santiago, Cuba by Archbishop Pérez Serrente on June 17, 1959, bearing on the agrarian reform program and raising the question of possible Communist influence therein as well as of doubt as to the merits of the law in other respects.
Mr. Kleberg emphasized that under the terms of the law no person could own more than 3,300 acres under any conditions. All land expropriated was to be compensated for on the basis of the tax assessment value and in the form of “worthless” bonds. The taxable value would certainly not represent more than 20% of the true worth of the land even if the bonds were at all negotiable. Acreage transferred to [Page 541] the landless class would not be cultivated effectively because the new owners would lack capital, technical knowledge, equipment, marketing arrangements, etc. Some reform might be necessary in the Cuban system of land tenure; a certain degree could under proper conditions be achieved without reducing the country’s productivity too severely. The present program, however, would bring ruin upon the country.
Mr. Kleberg believed that it behooved the U.S. Government to take a very firm position forthwith against the law and its implementation. Moreover, he thought that the best way to achieve the necessary result was by economic pressure. In theory at least, this should not be difficult because of Cuba’s heavy dependence upon the export of sugar in general and its preferred status in the U.S. sugar market in particular. If Cuba were deprived of its quota privilege, the sugar industry would promptly suffer an abrupt decline, causing widespread further unemployment. The large numbers of people thus forced out of work would begin to go hungry. They would then readily perceive the catastrophic nature of Castro’s program, and that would mean the end of Castro politically.
The Secretary asked whether, in Mr. Kleberg’s opinion, such a sequence of events would in fact cause the new government to fall. Mr. Kleberg replied that he was convinced of it. The Secretary commented that measures of economic warfare during wartime were one thing, whereas in peacetime they were quite another. Mr. Kleberg acknowledged this to be so, stating that he was fully aware of the complexity of the problem facing our Government and that he was not the one to decide its policy.
He thanked the Secretary for having given him the opportunity to explain his predicament and that of the other Americans having a similar stake in the Cuban economy.