261.
Memorandum From the Director of the Office of Middle American Affairs (Newbegin) to the Deputy
Assistant Secretary of State for Inter‑American
Affairs (Sparks)[1]
Washington March 15, 1955.
Political Aspects of Cuban Sugar Problem.
By despatch dated February 21, 1955,[2] Embassy
Habana has described the possible political consequences, in Cuba, of a
reduction in that country's participation in the U.S. sugar market. The
Embassy's arguments, supplemented by some from this office, are edited and
summarized below.
(1) A significant reduction in Cuba's percentage
participation in the U.S. sugar market would result in ill will against our
country in general and against our Government in particular.
(2) It might prejudice the ample cooperation Cuba has
given us in the international field, such as in the matter of the Nicaro Nickel
operations[3] or in international organizations.
(3) It might adversely affect the treatment accorded
by Cuba to American business interests and cause Cuban importers to seek to buy
more from European markets.
(4) It would seriously weaken the Batista government
by undermining popular confidence, which is already far from complete, by
correspondingly strengthening the opposition, and by increasing the already
considerable economic discontent in Cuba.
(5) By weakening the Batista Government, it would
render it more vulnerable to revolution and to communist penetration, more
susceptible to graft and more likely to engage in unsound fiscal policies.
(6) It would strengthen the hand of the 25,000
active communists in Cuba and perhaps permit them to regain the ascendency
they formerly had in the labor movement and the substantial penetration they
once achieved in the Government. Batista, already chary, for political reasons,
of giving serious offense to the communists, might treat them with greater
deference if he could not lead from a position of strength.
(7) By fomenting unrest, a cut in Cuba's share of
the U.S. sugar market might strengthen revolutionary elements (already strong
enough to carry out periodic acts of violence) to an extent which might enable
them to overthrow the Government. Leaving aside the destructive nature of armed
revolution, the downfall of the Batista Government would almost certainly spell
continued political instability for Cuba. If Batista could not hold the
country together in the face of economic adversity, there is little likelihood
that anyone else could. Moreover, it would be hard to find any other Cuban
political figure whose stewardship would be as likely as Batista's to serve the
best interests of the United States.
(8) It would retard the substantial ($350,000,000)
economic development program the Batista Government is carrying out.
(9) It would aggravate the already severe
unemployment problem in Cuba (500,000 unemployed at all times and close to a
million out of work or only employed part time in the "dead season").
(10) Finally, it could undermine the whole Cuban
economy and, by decreasing Government revenue and private capital, prevent needed
diversification. One‑third of Cuba's national income is derived from
sugar and two‑thirds of it is generated, directly or indirectly, by the
sugar industry.
[1] Source: Department of State, Central Files,
837.2351/2‑2155. Limited Official Use. Drafted by William B. Connett of
the Office of Middle American Affairs.
[2] Not printed. (Aid.)
[3] Reference is to the U.S. Government‑owned
nickel plant at Nicaro, Cuba; see Document 296.