closed a copy of airmail despatch no. 961 with further reference to
the proposed banking and monetary legislation for Cuba. I appre-
ciate your desire that the Department understand clearly your posi-
tion on these matters. I believe that your last despatch together with
Lieutenant Southard's visit and the subsequent correspondence has
resulted in a clear understanding by the Department of the position
which you took in your despatch no. 513 of July 20. I am also sure
that you understand clearly the Department's policy with regard to
the monetary and banking legislation and, in the circumstances, I
think you will agree that formal reply by the Department to your
961 would not appear to be required.
  With best wishes,
      Yours very sincerely,                    LAURENCE DUGGAN



DISCUSSIONS AND AGREEMENTS RELATING TO THE 1942 AND 1943
                      CUBAN SUGAR CROPS71
837.61351/2830: Telegram
       The Charge in Cuba (Briggs) to the Secretary of State

                            HABANA, February 13, 1942-midnight.
                               [Received February 14-5: 44 a. m.]
  54. The Cuban Government is faced with a difficult situation be-
cause of the shortage of low grade alcohol for local consumption and
the press is filled with allegations that the Government in selling the
sugar crop to us failed to protect the interests of the Cuban people;
alcohol being "the poor man's fuel".
  As the Department is aware 34,000,000 gallons of high test are re-
served in crop contract for domestic use and while the 9,000,000 gallons
of blackstrap also reserved would be approximately sufficient to
produce all Cuba's 1942 alcohol requirements, the Cuban Govern-
ment is reluctant to reduce domestic blackstrap prices to a figure which
would permit sale of alcohol at around heretofore prevailing prices
as it fears that any reduction in molasses prices below the official sales
price might cause an unfavorable reaction in the United States. The
9,000,000 gallon blackstrap volume is moreover reportedly not suffi-
cient to permit profitable operation of local distilleries.
  I have been told therefore to place the following suggestion ur-
gently before our Government: Cuba is prepared to convert its 34,-
000,000 gallons of high test into approximately 20,000,000 gallons of
" For correspondence concerning negotiations for the purchase of the
1942
Cuban sugar strop by the United States, see Foretgn Relations, 1941, vol.
vI,
pp. 237 if.



315



CUBA