837.61351/1–3048

Memorandum of Conversation, by Mr. Leonard H. Price of the Division of Caribbean Affairs

confidential
Participants1: ARA—Mr. Woodward
ARA—Mr. Daniels
CRB—Mr. Walker
CRB—Mr. Price

A tie-in between sugar purchase negotiations by representatives of the United States Department of Agriculture now in Cuba and the settlement of outstanding problems between the United States and Cuba (see Department’s confidential telegram no. 126 of January 28 to American Embassy, Habana, Cuba2) appears unadvisable for the reasons set forth below. It should be emphasized that these are initial thoughts only which occurred to officers of the Department upon the receipt of the Embassy’s telegram no. 107 of January 27.3 Certain of these thoughts may prove to be inapplicable as a result of further [Page 545] information developed in the course of exchanges of views between the Embassy in Habana and the Department.

(1)
The “purchase” of the settlement of problems is contrary to established American principles.
(2)
Certain of the problems in question are of a juridical character and, therefore, not properly subject to settlement outside of judicial procedures which have been established for this purpose.
(3)
The cost of “settlement purchase” might well be all out of proportion to the advantages gained and such cost would have to be borne by taxpayers of the United States.
(4)
Conversely, to attempt a tie-in might result in the Department of Agriculture having to negotiate an uneconomic purchase of sugar on behalf of the War Department.
(5)
To attempt to effect a tie-in between commodity purchases in Cuba with the settlement of outstanding problems between the United States and that country might be considered as a precedent for similar tie-ins in connection with the acquisition of copper in Chile, oil in Venezuela, grain in Argentina.
(6)
The course of action to be pursued in Habana in connection with purchase of sugar by the Department of Agriculture would seem to be determined by either (a) a desire to purchase sugar cheaply for the U.S. Army or (b) to persuade Cuba to settle pending problems by purchasing its potential sugar surpluses and, therefore, assisting in the maintenance of a balanced economy in that country; it does not appear to be possible to accomplish both these objectives without partially excluding one or the other.
(7)
A factor not to be overlooked is Cuba’s demonstrated propensity to seize upon every opportunity to renew its agitation with regard to what it considers “economic aggression”.
  1. Robert F. Woodward, Deputy Director, Office of American Republic Affairs; Paul C. Daniels, Director, Office of American Republic Affairs; and William W. Walker, Assistant Chief, Division of Caribbean Affairs.
  2. Not printed; it indicated that the Department shared the concern of the Ambassador in Cuba (Norweb) over the failure of the Cuban Government to settle outstanding problems, but advised against tying in sugar procurement and price with other issues (837.61351/1–2748).
  3. Not printed.