256.
Memorandum of a Conversation, Department of State, Washington, January 28, 1955[1]
SUBJECT
Prospective U.S. Sugar Legislation.
PARTICIPANTS
ARA‑Mr. Holland, Mr. Randall
Amedeo
Lopez Castro, Pres. Natl. Development Commission of Cuba
Amb. Aurelio F. Concheso, Embassy of Cuba
Ambassador Concheso expressed Cuban concern
regarding current efforts in certain quarters in the U.S. to amend U.S. sugar
legislation. Specifically he mentioned the visit Thursday of domestic sugar
producers to President Eisenhower.
Mr. Lopez Castro outlined briefly the problems faced
by Cuba, giving particular emphasis to the decrease over the three year period
from December 31, 1951 to December 31, 1954 of some 170 million pesos in Cuban
monetary reserves. He likewise stated that the loss of these reserves had been
accelerated each of the last two years of the period, thus following closely
the downward trend of Cuban production and sales. He stated that should this
continue, as could hardly be avoided, should Cuban participation in the world
or the U.S. sugar market continue downward, results could not be but disastrous
to Cuba, both economically and politically.
Mr. Lopez Castro and Dr. Maņas reviewed the efforts
of Cuba to meet the sugar problem through reduction of the crop from 7 million
Spanish long tons in 1952 to 5 million in 1953 and 4,750,000 in 1954. Now, they
explained, Cuban labor has accepted for the present sugar grinding season a 7/2
per cent reduction in wages, which, with the additional reduction of the crop
to 4,400,000 Spanish long tons, means a total reduction in income for the
workers of approximately 15 % .
Dr. Maņas further stated that the present outlook is
of such seriousness that the Cuban Sugar Stabilization Institute has prepared
two reports on its recommendations regarding this year's crop. The basic
recommendation justified a production for 1955 of no more than 3,770,000
Spanish long tons. Dr. Maņas pointed out that this report is confidential and
remained in the Institute, one copy having been given to Mr. Lopez Castro as
the official representative of the Cuban Government on sugar matters. The
public report of the Institute recommended 4,400,000 Spanish long tons, using
as a basis the total that could be justified for Cuban production under the
London agreement. He stated that from the present outlook, with no change in
U.S. sugar legislation, a production of 4.4 million tons would require
financing of an additional reserve tonnage of at least 350,000 tons and
possibly more. This extra reserve would need be financed at 2.77 cents per
pound rather than at 3.08 cents as was done with the 1952 reserve.
Mr. Holland reviewed efforts of interested groups
last year to amend U.S. sugar legislation. He referred to conversations with
Amb. Concheso over the past year during which he had pointed out that the sugar
question could only be one of constant struggle. He stated that he knew that
Cuba had been well aware of this and had prepared for that struggle. He
mentioned the need of recognizing the importance of related factors, since to
ignore them might alienate support of the Cuban position. Specifically he
mentioned the present situation with regard to Cuban rice import quotas.
Mr. Lopez Castro repeated the Cuban rice position as
presented in Washington, making particular mention of the Cuban policy, there
stated, to purchase all of its rice imports from the U.S. It was pointed out to
Mr. Lopez Castro that announcement had been anticipated by February 1 of a
deficit rice quota by Cuba and that word had been received that Cuba would be
announcing that it needed no more imported rice during the remainder of the so‑called
rice year which would end July 1, 1955. It was mentioned that such an announcement
would probably bring strong criticism from certain sections and would make more
difficult the position of others in the U.S. generally sympathetic with the
Cuban rice policy. Mr. Lopez Castro stated that there had apparently been some
confusion as regards the date of February 1. In proposing it he had thought in
terms of February 1 as the date which would be considered for announcement of
future deficit quotas after amendment of the present rice agreement[2] had been
negotiated. Unavoidable delay has occurred in the initiation of these
negotiations which will now begin in Habana on February 9. He feels that until
discussion of changes in the present rice agreement have been held, Cuba will
not be able to announce with assurance, either that any more rice is needed
during the remainder of the present rice year, or to specify the amount that
she might need. Cuba feels that it would be first necessary to know the date to
be selected for the opening of the new "so‑called" rice year.
Mr. Holland stated that rice was mentioned only as a
question in point of the importance that must be given to each factor that
would eventually affect the decision of the Congress regarding sugar
legislation. He told Amb. Concheso that Cuba need not be preoccupied by the outcome
of the meeting of domestic representatives with President Eisenhower. The
President, he stated, had informed the representatives that the entire question
of sugar and the advisability of undertaking new legislation would be given
careful and full study before any definite position would be taken by the
Executive. In such study, the President, of course, had assured the domestic
sugar representatives that their point of view would be given appropriate
consideration.
[1] Source: Department of State, Central Files,
811.235/1‑2855. Official Use Only. Drafted by Randall on January 31.
Initialed by Holland.
[2] Reference is to the joint agreement on rice
between the Governments of the United States and Cuba which entered into force
on December 17, 1952, establishing a method for determining Cuba's annual rice
import quota in connection with a General Agreement on Tariffs and Trade (GATT)
concession on rice.