837.61351/2372: Telegram
The Chargé in Cuba (Beaulac) to the Secretary of State
[Received January 9—12:50 a.m.]
11. From Pierson35 to Will Clayton.36 It is anticipated that the Cuban Government will fix a crop of 2,000,000 Spanish long tons [Page 229] exclusive of any extraordinary quota which may be financed by the Export-Import Bank. On the basis of a crop of this size, I recommend that the bank offer to finance the production during 1941 of a special additional quota of 400,000 tons the financing to be made at the rate of one cent per pound upon the following conditions:
Loan to be against 5-year notes secured by pledge of sugar as well as allocation of 6 cents per bag production tax and provision for diversion of not exceeding 50,000 tons of pledged sugar per annum for sale in the American market within the American quota if equivalent amount is not sold elsewhere at price not lower than the financing price.
Authorization for the financing should be obtained from the Cuban Congress which should include in the enabling legislation provision for the extension without substantial modification of Decree Law 522.37
It is contemplated that the Cuban Sugar Stabilization Institute38 would act as representative of the parties to the financing agreement and that a private bank would act as trustee.
If the foregoing is approved by the State Department and the bank I shall submit it to the Cuban Government at the first opportunity. [Pierson.]
- Warren Lee Pierson, President of the Export-Import Bank.↩
- Deputy Federal Loan Administrator.↩
- Promulgated January 18, 1936. The decree established standards for the production and export of sugar and authorized Government regulation; see Gaceta Oficial, Edicion Extraordinaria No. 13, January 20, 1936.↩
- A governmental body organized to supervise the production and export of sugar, authorized on May 14, 1931, and continued by the Decree Law 522.↩