397. Memorandum of a Conversation, Department of State, Washington, November 24, 19591
- Luncheon Meeting Between Mr. Dillon and Representatives of U.S. Cattle and Sugar Enterprises in Cuba
- Mr. Robert Kleberg, King Ranch; Mr. Lawrence Crosby, Chairman, U.S.-Cuban Sugar Council; Mr. William Oliver, President, American Sugar Refining Company; Mr. George Braga, President, Francisco Sugar Company and partner in Kleberg’s Cuban ranch; Mr. Malone, General Manager, American Sugar Refining Company
- Mr. Roy R. Rubottom, Jr., Assistant Secretary for Inter-American Affairs; Mr. Eric H. Hager, Legal Adviser; Mr. Thomas Mann, Assistant Secretary for Economic Affairs; Mr. William Wieland, Director, Office of Caribbean and Mexican Affairs; Mr. Harry Turkel, Director, Office of Inter-American Regional Economic Affairs
At the luncheon by Mr. Dillon for the representatives of large U.S. cattle and sugar enterprises in Cuba, Mr. Kleberg started by saying there was scarcely a day when he was not called by a member of Congress to give his views on Castro. In general, the Congress is angry at Castro’s action. Mr. Kleberg had a letter read from the local representative of a U.S. cattle ranch in Camaguey describing the arbitrary [Page 678] action of the Cuban Agrarian Reform Institute, and the rapidly deteriorating situation. Mr. Kleberg then stated that the cattle and sugar enterprises had a plan to assure prompt compensation for the impending expropriations and asked Mr. Crosby to explain it.2
In brief, it provided:
- Extension of Sugar Act for one year only. (Wait until the dust settles philosophy.)
- Granting President right to change country quotas only for supply reasons. (In contrast to domestic interests who would grant President power to change for any reason.)
- If any foreign country expropriates property without prompt compensation, levy 1–1/4 cent per pound penalty on importation of its sugar to create a fund which a U.S. Commission will use to make compensation. (This takes from Castro only ½ of the premium on Cuba’s sugar exports to the U.S.)
Mr. Rubottom said that he dissented from any punitive philosophy in our policy toward Castro since this would solidify all Cuban elements behind Castro.
Mr. Mann explained the steps being taken to obtain an Administration position in the near future.
Mr. Dillon stated that the proposal read by Mr. Crosby would be given very careful consideration by the Department.
Ater the meeting broke up, Mr. Turkel handed Mr. Crosby a personal note saying that he felt a penalty on importation of Cuban sugar would be contrary to GATT 3 and possibly also to the Charter of the OAS.
Mr. Hager, Mr. Turkel and the sugar companies’ lawyers will meet on this aspect in the near future.4
- Source: Department of State, Secretary’s Memoranda of Conversation: Lot 64 D 199, November 1959. Official Use Only. Drafted by Turkel and approved by Rubottom.↩
- Having already been apprised of the plan advocated by the American property owners in Cuba, Rubottom, in a November 23 memorandum to Dillon, and Mann, in a November 24 memorandum to Dillon, explained in detail their reasons for opposing the plan. Both memoranda are in Department of State, Central Files, 811.05137/11–2359.↩
In a November 24 memorandum to Rubottom, Turkel presented arguments to support his view that GATT prohibited the imposition of penalties on the import of Cuban sugar. Turkel then noted:
“After the luncheon meeting today between Mr. Dillon, Mr. Kleberg and the U.S. sugar producers of Cuba, I informed Mr. Larry Crosby of these objections. I did not add what I recommended to you, that is, to let the measure be introduced. Then the Department can oppose it and say that it would like to have an opportunity to let Castro put a 1-¼ cent export tax on sugar destined for the U.S. with the proceeds committed to U.S. owners of lands to be expropriated.
“This method gets away from the penalty concept to which you objected at the luncheon.” (Ibid., 837.235/11–2459)↩
- No record of this meeting has been found.↩