Memorandum by the Acting Chief, Commodities Division (Cale)4

The coffee supply situation which, because of the urgent needs of the Armed Forces, has been serious for weeks is rapidly deteriorating and has now become critical. Among the causes of this deterioration are the following:

The prospect of getting the Colombian Government to authorize the Colombian Coffee Federation to sell any coffee to the Armed Forces at present ceiling prices has virtually disappeared.
Although officials of the Brazilian Government have expressed a willingness to sell the remainder of the Memorandum of Understanding5 coffee (210,000 bags) to the armed services rather than to civilian consumers and although they have expressed a willingness to consider further action with a view to preventing the reinstitution of rationing in this country, progress toward obtaining any large quantity of coffee from Brazil for the Armed Forces such as would be needed to bring about any real improvement in the present situation has been slow. There have been indications, in fact, that authorities of the Brazilian Government may be using delaying tactics in the consummation of any large sale to the Army in the hope that, by forcing us into a more difficult supply situation, they may lessen our determination to hold present ceiling prices.
General Hardigg of the Office of the Quartermaster General has indicated that he must have very prompt action to obtain coffee for the Army but that he favors the reinstitution of rationing prior to the requisitioning of any civilian stocks for use by the Army. In a meeting in Mr. Clayton’s office on January 26, he said that he was willing to give the industry in this country an opportunity voluntarily to furnish coffee to the Army prior to taking any action which would bring on rationing. In this connection, he indicated that he wished to obtain a million bags of coffee as soon as possible. I am sure that it would be impossible to obtain this quantity from civilian stocks now in the United States and I believe that General Hardigg has little hope of getting any such quantity of coffee voluntarily from the industry.
Drew Pearson6 in a nation-wide broadcast on Sunday night, January 28, described the Army supply difficulties and pointed out the possibility that coffee rationing might have to be reinstituted in the near future as a result of the unwillingness of United States Government authorities to increase coffee prices. This will, of course, accentuate the tendency on the part of consumers to hoard coffee and may make it impossible longer to delay the reinstitution of coffee rationing.

In view of the foregoing, I suggest that Mr. Clayton call either Judge Vinson7 or Justice Byrnes8 as soon as possible and request that, should the decision be reached to reinstitute rationing, at least 48 hours be given the Department before any public announcement of this fact is made so that we may bring the imminence of rationing again to the attention of the Colombian and Brazilian Governments and give them one last opportunity to make some concrete proposal that would relieve the situation. If they should be agreeable to this procedure, I should be glad to telephone Paul Daniels, Counselor of the Embassy in Bogotá, and Walter Donnelly, Counselor for Economic Affairs of the Embassy in Rio de Janeiro, outlining the situation to them and asking them to take it up immediately with the Colombian and Brazilian authorities. I feel that we should bring no further pressure on such authorities other than to advise them of what is about to happen and to give them an opportunity, should they so desire, to take action to prevent it. I fear that the situation may have gone so far that Justice Byrnes and Judge Vinson may be either unwilling or unable to give us the time to make another approach to the Colombian and Brazilian Governments. I believe, nevertheless, that we should ask them to do it, if it is possible.

Edward G. Cale
  1. Addressed to Assistant Secretary Clayton and to the Director of the Office of Economic Affairs (Haley). In a marginal note both indicated agreement with this memorandum.
  2. For text of this memorandum, see Airgram 932, July 6, 1944, to Rio de Janeiro, Foreign Relations, 1944, vol. vii, p. 632.
  3. Newspaper columnist.
  4. Fred M. Vinson, Director of Economic Stabilization.
  5. James F. Byrnes, Director of War Mobilization.