ploying domestic grains as raw material are beginning to convert
to industrial alcohol production. (Can you obtain an accurate indi-
cation of Cuban alcohol capacity without new equipment?)
                                                            HULL

837.61351/2876: Telegram
      The Charge in Cuba (Briggs) to the Secretary of State

                                     HABANA, March 4, 1942-noon.
                                            [Received 5: 56 p. i.]
  102. My telegram No. 98, March 3, 6 p. m.79 In reply to Lopez
Castro's 8 inquiry this morning whether I had received any news con-
cerning the views of our Government on the sugar problem, I told him
that although definite word had not thus far been forthcoming I know
the matter is under very serious study by the various agencies of our
Government now concerned and that he will find an understanding
attitude when he reaches Washington.
  Commenting on the general sugar situation here L6pez Castro said
that although the grinding of the crop is proceeding satisfactorily
hacendados are beginning to complain that payment by the Defense
Supplies Corporation 81 is not forthcoming which in turn results from
the fact that relatively little sugar is being transported and hence
little paid for. He said this has already begun to- create an unfavor-
able atmosphere among mill owners whose problem is complicated
because of the increase in wages and colono payments which cannot be
deferred. Many hacendados are accordingly having to obtain ad-
vances from the banks which are charging from 6 to 8 percent "against
the certainty of Defense Supplies Corporation payments" which rates
Lopez Castro considers indefensible. He added that the matter had
been taken up with the Habana clearing house with no success what-
ever and that he proposed to bring it to; the, attention of the Acting
Secretary.
  He went on to say that the Cuban Government and the hacendados
sold the crop at a reasonable price to our Government not ill the ex-
pectation of large profits to producers but in furtherance of the war
effort; that being the case he fails to see why the banks should be
demanding "inordinate profits" from a situation resulting from
the
shipping problem, over which Cubla has no control.
                                                            BRIGGS

  79 Ante, p. 290.
  80Cuban Secretary of the Presidency and Representative of the Cuban Sugar
Stabilization Institute.
  1 United States Purchasing Agency of the 1942 Cuban sugar crop.



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,CUBA