594. Memorandum From the Assistant Secretary of State for Inter-American Affairs (Mann) to the Secretary of State1

SUBJECT

  • Export Controls and Other Cuban Matters

We have no thought that export controls alone will “bring the Cuban economy to a grinding halt” to use the words of a radio news commentator, but we do estimate that this action will exert a serious pressure on the Cuban economy and contribute to the growing dissatisfaction and unrest in the country. It will also bolster the morale of the opposition groups now active in Cuba and elsewhere. As of now we have not learned the official reaction to this step from the more important countries of Latin America. We do have indications of approval and support from Honduras, Guatemala, Nicaragua, Peru and El Salvador. The Chilean Foreign Minister has indicated a feeling of disapproval toward this step.

Our next step in the course of action which we have begun is to prevent Cuba from having access to the U.S. market for Cuban sugar. It is ARA’s recommendation that the President, using his authority under current legislation, fix the Cuban quota at zero for the first quarter of 1961. It is imperative, however, that legislation be introduced early in the next session of Congress to provide that no further “windfall” sugar allotment be made available to the Dominican Republic. ARA and E are now preparing a study2 of the effect that cutting off Cuban sugar would have on the United States domestic supply and price of sugar, whether Cuba could benefit from possible supply shortages on the international market and the amount of sugar that the Soviet Bloc could take from Cuba in 1961.

With regard to further help and support from the OAS countries we contemplate a continuing effort to acquaint their governments and peoples with the serious and every day more evident Communist penetration and domination of Cuba, looking forward to further measures against Cuba undertaken on a multi-lateral basis. It is believed that we will shortly be able to demonstrate to the OAS countries the alarming amount of armaments which the GOC is receiving from the [Page 1092]Soviet Bloc. It is hoped that this information will be effective in persuading these countries to join us in some form of joint action under the Rio Treaty.

We proposed to the Secretary General of the OAS on September 12, 1960 the convocation of the ad hoc committee created by the 7th MFM for the purpose of clarifying facts in the interest of settling controversies between American governments. The Committee has informally approached the Cuban representative to the OAS and has received no indication that the Cubans are in any way interested that the committee begin to function. We plan to bring out this fact in answering the charges leveled at us today in the General Assembly by the Cuban Foreign Minister.3

Meanwhile, Castro’s recent performance at the United Nations and the latest Cuban law which nationalizes most of the remaining industrial and commercial establishments of the country furnish important additional evidence of the Communist domination and control of Cuba.

Although the recent Urban Reform Law and the final nationalization action of the GOC will provide it with further assets to help it through the so-called “dead season”, Embassy Habana estimates that net foreign exchange reserves will be below $100 million by the end of the year and reports of economic deterioration, discontent and unrest are steadily increasing. However, the Embassy foresees no economic crisis before the year ends.

I believe that the contingency planning with regard to Guantanamo is now fully understood by all Departments having a pertinent interest and/or responsibility.4

  1. Source: Department of State, S/SNSC Files: Lot 62 D 1, Cuba & the Dominican Republic. Secret. Drafted by Stevenson.
  2. Not further identified. For text of the President’s December 16 statement fixing at zero the quota for imports of Cuban sugar for the first quarter of 1961, see Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1960–61, p. 374.
  3. See Document 598.
  4. The following note, in an unidentified hand, is in the margin at this point: “What is it?”