Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

237. Information Memorandum From the Assistant Secretary of State for Economic Affairs (Johnson) to Secretary of State Rusk¹

Washington, September 29, 1964.

SUBJECT

• Sugar Legislation

Bitter words were exchanged among members of Mr. Cooley’s Committee this morning. But the outcome was no agreement on the Administration’s proposal for a simple extension of the Sugar Act and the Committee did not proceed to a vote on the bill. Any action was blocked by the beet growers who insist upon marketing relief as the price for support of the legislation.

In these circumstances, Mr. Cooley had no occasion to direct attention to his own version of the Administration bill—that calling for a reduction in the import fee. However, he has privately acknowledged that there is merit in dropping this issue now and letting it carry over for consideration in next year’s legislation.

Present prospects are very dim for any sugar legislation to pass during the present session of Congress, but at the last moment the beet producers might capitulate and accept a simple six months’ extension.

Failing legislation, we shall have to decide what to do in order to prevent a sharp decline in U.S. prices and to assure continued access of foreigners to this market. We are asking the Bureau of the Budget to form an inter-agency group to settle this question quickly. Decisions will have to be taken as soon after the election as possible if we are to prevent real weakness in the market early next year.

1. Source: Department of State, EB/ICD/TRP Files: Lot 75 D 462, Inco-Sugar, 1964 Aug/Sept, United States. No classification marking. Drafted by Jerome Jacobson on September 29 and cleared by Robert E. Lee (H). A handwritten note on the source text reads: “Secretary saw.”