Excellency:

Embassy of the United States of America
Habana, December 23, 1941

I have the honor to acknowledge the receipt of Your Excellency's note referring to the tariff concession granting a reduced rate of duty on sugar of Cuban origin provided for by the supplementary trade agreement between our two countries signed at Habana this day, expressing preoccupation regarding the position of Cuban sugar in the United States market, and requesting assurances in this regard.

I have the honor to state that I am directed by my Government to assure Your Excellency that the interest of your Government in maintaining the position of the Republic of Cuba as a supplier of sugar for the United States market, at least in the same proportion as provided for in the Sugar Act of 1937, which is considered of vital importance to the maintenance of the existing economic relations between both countries, is fully appreciated, and that therefore my Government will make at all times every appropriate and possible effort to safeguard that position.

It is understood that this exchange of notes constitutes an integral part of the supplementary trade agreement signed this day.

Please accept, Excellency, the renewed assurances of my highest consideration.

His Excellency

Dr. José M. Cortina,

Minister of State,

Habana

(Signed) GEORGE S. MESSERSMITH

Ambassador of the United States of America

Appendix P

HAWLEY-RIONDA LETTERS

[These letters are of historic interest because they clearly state Cuba's position in two important respects: (1) The Cuban sugar industry distinctly anticipated price difficulties if there was uncontrolled marketing of sugar during a time of great scarcity such as was in prospect for the year 1920 and (2) the desire of the Cuban sugar industry to protect consumers in the United States and other countries from the consequences of the anticipated price difficulties is definitely expressed.]

Letter from Messrs. Hawley and Rionda tendering Cuban crop
of 1919-20 to the American Government

George A. Zabriskie, President

New York, July 29, 1919

of the "Equalization Board"

111 Wall Street

New York City

Dear Sir:

In pursuance of the informal discussions conducted between the subscribers, speaking by authority for the Cuban Government, and members of "The Equalization Board" as the purchasers and distributors of Cuba's Sugar Crop for the existing year, we deem it expedient to submit for your information, and as far as you may determine, for your action in continuing the control and disposition of Cuba's Crop of Sugar for the ensuing year of 1920.

In presenting our suggestions, while acting directly for the Cuban producer, we accept the grave responsibility of speaking scarcely less for the American consumer, and for that vast army of foreign consumers whose needs are of such concern to the American Government.

Fortunately for every interest involved, the great bulk of sugar required by importing countries is provided by the Island of Cuba-but she takes no note of this "coign of vantage" on the other hand, the Island Republic, its Hacendados and farmers, and manufacturers of sugar, tender through its own Government, providing it meets with the consent and cooperation of the American Government, the entire wealth of her production, under such terms as may be agreed upon by contracting parties, at a price moderate, but compensating to the producer and well within the economic reach of the consumer.

This is the fundamental basis upon which our tender is made.

If accepted through the continued life and active participation of your respected Board-or a similar body-the whole question would be greatly simplified. If, on the contrary, the opportunity to serve-not the American people alone but the Universal Welfare-is for any reason, technical or otherwise, not availed of through one medium or another, there is not a community anywhere in America, in Europe or Asia that will not feel the consequence of our failure to provide a stable price for this most necessary article of human consumption.

Cuba approaches this question with full recognition of her relations to the American people and their Government and in the spirit of comity and desire for a complete understanding.

We await with unflagging interest your reply, the subject of which we are assured is to you, as it is to us, the most momentous in the world's economy of today.

With assurances of great respect,

Faithfully yours,

(Signed) R. B. HAWLEY
MANUEL RIONDA

Letter from Messrs. Hawley and Rionda withdrawing tender of Cuban 1919-20 crop

Mr. George A. Zabriskie, Chairman

of the "Equalization Board"

111 Wall Street

New York City

Dear Sir:

September 22, 1919

We beg leave to refer to our letter bearing date of July 29th, 1919, copy of which we inclose; as you will observe by its terms, we were pleased at that time to inform your respected Board that the Republic of Cuba, its Hacendados and farmers, and manufacturers of sugar, acting through us in a representative capacity, were willing to tender to you or a similar body the entire production of Cuba on such terms as might be agreed upon by the contracting parties, at a price moderate, but compensating to the producer and well within the economic reach of the consumer, always provided that this offer met with the full consent and cooperation of the United States Government.

In the interval that has transpired we have awaited your answer, confidently believ ing that the United States Government would undertake the continued control of sugar,

and every interest concerned, especially the American consumer, would experience the advantage of a stabilized market. Unfortunately, the logic of the situation has not impressed the Government, or in keeping with its traditional policy-the war being over-it is thought best to permit the market to be ruled by the natural law of supply and demand.

While we had hoped for a different conclusion to the negotiations put forward by Cuba, with the wealth of production represented by her producers, we reluctantly accept the situation now existing and return the authority under which we were acting. The spirit of the times is so fraught with speculation that wide fluctuations must inevitably ensue, but whatever developments may occur, speaking now only for ourselves, and whatever influence we may exert, we shall employ our best efforts in helping to maintain a conservative situation.

With assurances of great respect,

Faithfully yours,

Appendix Q

(Signed) R. B. HAWLEY
MANUEL RIONDA

CHRONOLOGY OF PRINCIPAL UNITED STATES GOVERNMENT

SUGAR CONTROLS DURING KOREAN EMERGENCY IN 1950 AND 1951

August 4, 1950 - The Secretary of Agriculture announced the purchase of 600,000 short tons of Cuban sugar, the entire stock available at 5.38 cents per pound, raw value, f. a. s. Cuban ports.

January 26, 1951 - Office of Price Stabilization issued a general ceiling price regulation covering most commodities, including sugar but not sugar beets and sugarcane. February 12, 1951 Office of Price Stabilization issued regulation exempting sugar from price ceilings. An accompanying statement cited the control over sugar prices possessed by the Secretary of Agriculture under the Sugar Act of 1948.

Appendix R

CHRONOLOGY OF PRINCIPAL UNITED STATES GOVERNMENT

SUGAR CONTROLS DURING WORLD WAR II PERIOD, 1939-1947

September 11, 1939–The President suspended sugar quotas under the Sugar Act of 1937. As provided in the Reciprocal Trade Agreement of 1934 with Cuba, the tariff on raw sugar from Cuba was increased from 0.90 cent per pound to 1.50 cents when quotas were suspended.

December 26, 1939-The President restored sugar quotas and the tariff on raw sugar from Cuba was lowered from 1.50 cents per pound to 0.90 cent.

August 14, 1941-First ceiling price established by the United States Government in the World War II period was on sugar, at 3.50 cents per pound, raw sugar, duty paid, basis New York.

January 5, 1942-Ceiling price of raw sugar raised to 3.74 cents per pound, basis New York, with small differentials for other refining ports. January 28, 1942-The United States Government, through the Defense Supplies Corporation, contracted for the purchase of the entire 1942 Cuban sugar crop, except for the quantity needed for consumption in that country, for 2.65 cents per pound, raw value, f.o.b. Cuban ports. The equivalent of approximately 700,000 tons of sugar was purchased in the form of invert molasses under the contract, which specified that one-third of the crop was to be processed into invert molasses.

April 14, 1942-The President suspended sugar quotas under the Sugar Act of 1937.
May 1, 1942-Sugar rationing established for industrial and institutional users.

May 5, 1942-Sugar rationing established for household consumers.

June 9, 1942-The President of the United States and the Prime Minister of Great Britain jointly authorized the creation of the Combined Food Board to recommend international allocations of sugar and other foods in short supply.

April 3, 1943—The United States Government contracted for the purchase of 2,700,000 tons of Cuban raw sugar for 2.65 cents per pound f.o.b. Cuban ports. The purchase contract provided that Cuba would limit the total production of sugar in Cuba in 1943 to not more than 3,225,000 tons of raw sugar.

September 22, 1943-The United States Government contracted for the purchase of the 1944 Cuban sugar crop, with the exception of 200,000 tons for consumption in Cuba, for 2.65 cents per pound, f.o.b. Cuban ports.

April 1, 1944-The United States Government contracted for the purchase of invert molasses from the 1944 Cuban sugar crop. The quantity of 1944-crop Cuban raw sugar previously contracted for from Cuba was reduced sufficiently to permit the production of the invert molasses.

September 3, 1944-A uniform ceiling price on raw sugar, duty paid, for all refining ports was established at 3.75 cents per pound by the United States Government. April 26, 1945-The United States Government contracted for the purchase of the entire 1945 crop of Cuban sugar, less 454,320 tons for consumption in Cuba and “free” export chiefly to Latin America, at 3.10 cents per pound for raw sugar, f.o.b. Cuban ports.

February 10, 1946–The ceiling price of raw sugar, duty paid, was raised to 4.205 cents per pound.

July 1, 1946-The International Emergency Food Council took over the activities of the Combined Food Board.

July 16, 1946-The United States Government contracted for the purchase of the entire 1946 and 1947 crops of Cuban sugar, less 704,196 tons in 1946 and 738,270 tons in 1947 for consumption in Cuba and “free” export chiefly to Latin America. The basic minimum price for 1946-crop Cuban raw sugar was 3.675 cents per pound f.o.b. Cuban ports, that for the 1947-crop was the highest price actually paid by the United States for any 1946-crop Cuban sugar. These prices were subject to increase in the event of certain contingencies.

September 18, 1946-The ceiling price of raw sugar, duty paid, was raised to 5.575 cents per pound.

November 20, 1946-The ceiling price of raw sugar, duty paid, was raised to 5.94 cents per pound.

January 18, 1947-The ceiling price of raw sugar, duty paid, was raised to 6.125 cents per pound.

March 30, 1947-The ceiling price of raw sugar, duty paid, was raised to 6.185 cents per pound.

June 11, 1947-The rationing of sugar to household users was ended.

July 28, 1947-The rationing of sugar to industrial and institutional users was ended. This was the last commodity removed from ration control during World War 11. August 6, 1947-The ceiling price of raw sugar, duty paid, was raised to 6.32 cents per pound.

September 23, 1947-The International Emergency Food Council announced that sugarimporting countries would be permitted to exceed their previously recommended allocations of sugar. This, in effect, ended international sugar allocations.

October 31, 1947-All price ceilings on sugar were removed, ending all World War II price controls except rent.

Pound,

English

Sack,
Cuban Raw
Sugar

Short Ton,

Long Short

.012500

.011161

.006689

.001102