837.61351/4009a
The Assistant Chief of the Division of the American Republics (Walmsley) to the Ambassador in Cuba (Braden)
Dear Mr. Ambassador: All of us who are interested in Cuba (and there are many) have given our very best thought to the sugar insurance problem on which you have sent a number of interesting, helpful and informative messages.
Knowing how very interested you and Ellis67 have been in this transaction, I should like to give you a summary of the developments and of the factors which have guided the action here.
Discussions have been held within the Department among such Cuban experts (and near experts) as Larry, Phil, George68 and me; and the pros and cons were even carried to the highest quarters.
In all of the discussions, both intragovernmental and with the Cubans, which have been held in the CCC, we have had a representative present, to express your views and those of the Department, and to keep us informed.
The CCC, throughout its examination of the insurance and reinsurance contracts, had the benefit of the assistance and advice of a Department of Agriculture insurance expert.
Frankly, we did not feel that we could muster sufficient substantiated evidence of a political nature which would justify asking the CCC, which was entirely satisfied with the risk on technical grounds to refuse acceptance of the contracts. One of the results of disapproval on unsubstantiated political grounds may well have been accusations against this Government and probably especially against the State Department that this was a successful maneuver on the part of other groups of less-favored insurance companies.…
[Page 193]We have made a few inquiries among sugar people with regard to the practice of splitting commissions and have been uniformly told that this practice is traditional and unquestioned (regardless of its merits) in the sugar industry in Cuba. We have also made inquiries as to the degree of commission splitting and have been uniformly told that the amounts split this year are not out of line with split commissions in previous years (always in relation, of course, to the proportions of the transaction).
In substance, then, it appears that neither the practice of commission splitting nor the degree has been very different this year than in previous years.
Incidentally, the CCC feels confident that the reduction in rates which has now been effected would work to the advantage of this Government when the CCC assumes title to and responsibility for the remaining ‘43 sugars.
Sincerely yours,