Central Intelligence Memorandum Number 94

The President SECRET CENTRAL INTELLIGENCE AGENCY 8 December 1948 INTELLIGENCE MEMORANDUM NO. 94 SUBJECT: watters of possible interest with reference to the visit of President Prio of Cuba. President Prio has placed first on his list of topics to be discussed with US officials the Cuban desire for a larger fixed share of the US sugar market. Despite certain scarcities, black markets, and read- justments, the increased production and sales of sugar since 1942 have financed a prosperity that has enabled the Cuban standard of living to rise above prewar levels. Large sales of sugar to the US having been the principal source of this increased income, however, many Cubans feared that the reinstatement of the US quota system in 1948 would force reduced sugar production with a consequent, and radical, down- ward readjustment of national wage-price structure. Actually it has been possible for Cuba to dispose of practically all of its bumper 1948 crop, but fears still persist concerning the sale of the 1949 crop which will be harvested within the next few months. Meanwhile, Prio's recently announced decree concerning the brice-wage-production cycle to the effect that the salary of sugar workers is to be mairtained on the same level as last year, has made Cuba's future economic equilibrium depen- dent on the maintenance of production and income close to present levels in relation to prices the workers will have to pay. Since Cuba buys most of its food from the US, there is a definite limit to what it can do independently to reduce food prices if the feared readjustment of wages resulting from a collapse of the sugar market, becomes necessary. For this reason, Prio has indicated that the US can help by alloting Cuba larger amounts of staples thus tending to lower prices. The same fear of radical readjustment motivates the Cuban desire for US economic and technical aid in the diversification of industry and in the construction of public works both of which, Cuba believes, tend to cushion the shock that might be occasioned by reduced production and marketing of sugar. DECLASSIFIED E.O. 12065, Sec. 3-402 State Dept. Guideline, June 12, 1979 c.x. LIST 6.5-fo (AND) By RARG, D 4-12-62 SECKET