201. Memorandum From the Assistant Secretary of State for Economic Affairs (Johnson) to the Under Secretary of State for Political Affairs (Harriman)1


  • New Sugar Legislation

Attached for your attention and consideration is the Bureau of Economic Affairs draft of a proposed Department position on new sugar legislation.2

We shall be faced this year with another determined drive by domestic farmers to increase their share of the United States sugar market and to reduce the foreign share. A few years back the domestic share of our market was 52–53%. It is now 59%. The Department of Agriculture proposes to increase it to 65%. The industry wants 70%. Sugar is one of our largest import items, mostly from the less developed countries. The prospect of a major rise in the domestic share of the market presents a serious foreign policy problem, most particularly in our relations with Latin America.

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In our draft, we have outlined a long-term program for putting both our imported sugar supplies and the position of the sugar producing countries on a stable basis. It would hold down the domestic share of the market; it combines a guaranteed price with country quotas; it would retain a share of the United States market for a non-Communist Cuba; it would phase out premium payments on sugar imports.

We can expect difficult inter-agency negotiations before an Executive Branch position is arrived at. The draft attached would thus be an initial bargaining position. We probably will not be able to maintain it intact.

Your comments on the attached should be sent to Deputy Assistant Secretary Jerome Jacobson, Bureau of Economic Affairs. They are solicited on an urgent basis.

  1. Source: Department of State, EB/ICD/TRP Files: Lot 75 D 462, Sugar, New Legislation. Confidential. Drafted by Henry Brodie (E/OR). The memorandum was also addressed to the Assistant Secretaries of State for African Affairs, Inter-American Affairs, European Affairs, Far Eastern Affairs, and Near Eastern and South Asian Affairs. The source text bears a handwritten note from Harriman to Under Secretary Ball that reads: “What do we do about this? This is your pigeon, isn’t it?”
  2. Drafted in E on February 20, not printed.