266.
Memorandum of a Conversation, Washington, April 7, 1955[1]
Sugar legislation
PARTICIPANTS
Mr. Morse, Under‑Secretary
Mr. McConnell, Assistant Secretary
Mr. Waugh‑E
Mr. Holland‑ARA
Mr. Cale‑AR
Mr. Callanan‑IRD
Mr. Morse opened the conversation by saying that
Agriculture felt another meeting was desirable on this subject in view of
Governor Adams' feeling that the problem should be resolved by those who were
most familiar with it. Mr. Holland agreed that another meeting was in line with
Governor Adams' wishes. He added that he did not believe any limitation had
been placed on the number of meetings we might have before the matter was
referred back to the White House.
Mr. Holland asked the Agriculture representatives if
they had seen the latest memorandum which the Cubans had left with Secretary
Benson.' Mr. Morse said that he had glanced at it. Mr. Holland said in view of
this he would like to read certain sections of the memorandum which had made a
great impression on him. He said up to this time the Cubans had wasted a lot of
time making inconsequential arguments, and had for some reason waited until the
last minute to provide material which merited very serious consideration. Mr.
Holland proceeded to read several paragraphs from the Cuban memorandum. The
Cubans pointed out that they had been forced to cut their crop progressively
each year since 1952. The 2 million ton surplus from the 1952 crop had been
financed by the Cubans themselves and scheduled for release to the United
States market over a five‑year period. In doing this the Cubans had, of
course, relied very heavily on present sugar legislation running its course. If
the Act were amended now to restrict their marketings in the United States,
their marketing plan would be interrupted and they would be forced to add to
their reserves whatever quantity they lost in the United States market in 1955
and 1956 by reason of a change in sugar legislation.
Mr. Holland remarked that he had just received a
call from Havana from our Ambassador. He said the Ambassador felt that any
change in present legislation before its expiry date would mean the fall of the
present Cuban Government. Mr. Holland said he would not personally go that far,
but had confidence in the Ambassador's appraisal of the Cuban situation. Mr.
Holland indicated he believed the best course to follow would be for the
Administration to introduce a bill effective January 1, 1957. This would
impress the Cubans and other friendly countries with the fact that the Administration
had lived up to a commitment. The Administration then could proceed to trade
back from that date in dealing with the domestic industry, but would have
accomplished a great deal in maintaining our good relations with Cuba.
Mr. McConnell said he was informed that the domestic
industry had sold their bill to many Senators on the grounds that it would not
cut Cuba back from its present position. In response to a question from Mr.
Waugh, Mr. Callanan pointed out that this contention of the industry would be
true if one considered that 8.2 million tons represented all the market the
Cubans anticipated this calendar year. He went on to explain that the Secretary
of Agriculture last December had estimated consumption in 1955 at 8.5 million
tons. The Secretary then went on to say he was subtracting 300,000 tons from
his estimate for price effect, and thus 8.2 million tons was the present level
on which import quotas are based. All of this was public knowledge and the
Cubans, of course, in planning their 1955 crop had based their estimate of
their marketings in the United States in 1955 on the Secretary's public figure
of 8.5 million tons.
[Here follows discussion of the difference of
opinion between officials in the Departments of State and Agriculture.]
[1] Source: Department of State, Central Files,
811.235/4‑755. Confidential. Drafted by Callanan.
[2] This memorandum, entitled "Effects on Cuba
of Certain Projected Amendments to the Sugar Act," is attached to
Holland's April 9 letter to Hauge which is attached to the Memorandum of
Understanding on Sugar Legislation, Document 272.