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The New Deal, Cuba, and the Rise of a Global Foreign Economic Policy

Published online by Cambridge University Press:  11 June 2012

Jules R. Benjamin
Jules R. Benjamin
Affiliation:
Assistant Professor of History, Worcester Polytechnic Institute
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Abstract

By early 1933 President Roosevelt's advisors concluded that the United States Government would have to play a direct role in the Cuban economy. That nation, economically dependent upon the North American sugar market and politically dependent through the Platt amendment that gave the United States the right to intervene in its internal affairs, was economically prostrate and on the verge of civil war. The United States proceeded to abandon both the free trade and protectionist doctrines that had divided the President's advisors for a program that structurally integrated United States-Cuban trade and employed federal funds to support cooperative Cuban leaders. All of this, Professor Benjamin believes, foreshadowed the massive foreign trade and lending programs so common to American foreign policy after World War II.

Type
Research Article
Information
Business History Review , Volume 51 , Issue 1 , Spring 1977 , pp. 57 - 78
Copyright
Copyright © The President and Fellows of Harvard College 1977

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References

1 For the movement against Machado, see Benjamin, Jules R., “The Machadato and Cuban Nationalism, 1928-1932,” Hispanic American Historical Review, 55:1 (February, 1975), 66–91CrossRefGoogle Scholar. Concerning U.S. support for Machado, see Jules R. Benjamin, “United States Hegemony in Cuba, 1880-1934,” ch. IV, a manuscript to be published as a book in 1977 by Pittsburgh University Press.

2 Requests for action sent to the State Department and the United States Embassy in Havana can be found in National Archives, Record Group 59, 837.00/3415-3460 and Record Group 84, F800Cuba/1933, v.15/Misc. Corr. (When National Archive documents are cited without reference to Record Group [R.G.], such documents are from R.G. 59, General Records of the United States Department of State, Central Files, 1930-1939.)

3 Concerning other pre-inauguration discussions of Cuba by Roosevelt and his aides, see Benjamin, “U.S. Hegemony in Cuba,” ch. V.

4 Welles’ instructions are contained in Foreign Relations of the United States, 1933 (Washington, D.C., 1952), vol. V, 279–286.Google Scholar

5 McHale, James M., “The New Deal and the Origins of Public Lending for Foreign Economic Development 1933-1945” (Doctoral dissertation, University of Wisconsin, 1970), 2–5 & 37-84Google Scholar. Gardner, Lloyd, Economic Aspects of New Deal Diplomacy (Madison, Wisconsin, 1964), 14–39.Google Scholar

6 Rosen, Elliot, “Roosevelt and the Brain Trust,” Political Science Quarterly (December, 1972), 562Google Scholar; Gardner, , Economic Aspects of New Deal Diplomacy, 12–17Google Scholar.

7 Rosen, “Roosevelt and the Brain Trust,” 531-567: Tugwell, Rexford G., The Battle for Democracy (New York, 1935), 164–170Google Scholar.

8 Gardner, Economic Aspects of New Deal Diplomacy, 13-17; Beard, Charles A., The Idea of National Interest (New York, 1934), 545–548Google Scholar; Feis, Herbert, 1933: Characters in Crisis (Boston, 1966), 77 and 102.Google Scholar

9 Divine, Robert, The Illusion of Neutrality (Chicago, 1968), 154, 156, 193n, 314, 319-324Google Scholar; Lieuwen, Edmund, Arms and Politics in Latin America (New York, 1961), 188, 192Google Scholar; Ickes, Harold L., The Secret Diary of Harold L. Ickes (New York, 1953), I, 514Google Scholar; Gardner, Economic Aspects of New Deal Diplomacy, 86 & 165-166.

10 Whitaker, Arthur, The Western Hemisphere Idea (Ithaca, N.Y., 1965), 159–160Google Scholar; Divine, Robert, Roosevelt and World War II (Baltimore, 1970), 27–29Google Scholar; Perkins, Dexter, A History of the Monroe Doctrine (Boston, 1963), 362Google Scholar.

10 For the ideological underpinnings of the N.R.A. and A.A.A., see: Leuchtenberg, William E., Franklin D. Roosevelt and the New Deal (New York, 1963), ch. 3Google Scholar; Bernstein, Barton, ed., Towards a New Past (New York, 1968), 264–280Google Scholar; Conkin, Paul K., F.D.R. and the Origins of the Welfare State (New York, 1967), 34–44Google Scholar; Hawley, Ellis W., The New Deal and the Problem of Monopoly (Princeton, N.J., 1966), ch. 1-4.CrossRefGoogle Scholar

12 National Foreign Trade Council, Twentieth Convention — April 26-28, 1933 (New York, 1933)Google Scholar, Final Declaration, vii-xv. Concerning the Jessup study for the Pan American group, see OF 159 Cuba, Box 1, “An Analysis of the United States Export Trade with Cuba,” i-ii, F.D.R. Papers, F.D.R. Library, and R.G. 84, F800Cuba/1933, v. 9/631.00 letter dated May 24, 1933 from Juan Trippe to Welles. The letter from the Cuban Chamber of Commerce in the United States is dated April 4, 1933 and is in 611.3731/398. On the larger question of Latin American trade, see 610.113/51; 837.00/3481-1/2; 710/1518.

13 Pratt, Julius W., American Secretaries of State — Cordell Hull, XII (New York, 1964), 107Google Scholar. For State Department concern with domestic protectionism, see 611.006/1296; 611.3731/387. For discussion of the Cuba trade, see 611.0031/377-1/2; 837.61351/624; 837.61351/657. The value of United States exports to Cuba had fallen from $200,000,000 in 1925 to only $27,000,000 in 1932, see 611.3731/503-1/2.

14 Foreign Relations of the U.S., 1933, I, 921-922; Taska, Henry J., Reciprocal Trade Policy (Philadelphia, 1938), 22–23CrossRefGoogle Scholar.

15 Foreign Relations of the U.S., 1933, V. 278, 285; R.G. 151, BF.D.C, Report of Commercial Attaché Havana, Weekly Report for February 7, 14, 21, 1933 and April 11, 25, 1933. Also see 611.3731/390 and 637.113/29-67.

16 Steward, Dick H., “In Search of Markets: The New Deal, Latin America and Reciprocal Trade,” (Doctoral dissertation, University of Missouri, 1969), 15–16 and 29-30Google Scholar; Sayre, Francis B., Glad Adventure (New York, 1957), 170 and 173.Google Scholar

17 The non-Cuban suppliers were: 1) continental beet sugar growers and refiners, 2) continental cane growers in Louisiana and Florida, 3) insular cane sugar growers and millers in the Philippines, Hawaii, and Puerto Rico. This last group were all United States territories and thus within the tariff wall.

For a discussion of the United States sugar industry, see Dalton, John E., Sugar: A Case Study of Government Control (New York, 1937)Google Scholar.

18 Farr and Company, Manual of Sugar Companies 1933, 12th ed. (New York, 1933), 30Google Scholar; U.S. Tariff Commission, Report to the President on Sugar, Report #73 (Washington, D.C. 1934), 87 and 197.Google Scholar

19 The regional marketing proposal is contained in 837.61351/657.

20 Lindley, Ernest K., The Roosevelt Revolution (New York, 1933), 222–223.Google Scholar

21 611.373 Sugar/180, letter from Robert L. O'Brien to F.D.R. dated April 11, 1933; Records of the United States Tariff Commission, Box 21 (Sugar Schedule) letter from O'Brien to F.D.R. dated April 11, 1933; 611.0031/478 letter from Thomas Walker Page (Vice Chairman, U.S. Tariff Commission) to Hull dated April 20, 1933.

22 611.373 Sugar/182, Memorandum by Frederick Livezey (Office of the Economic Advisor) dated April 19, 1933, entitled “Cuban Sugar Quota Project.”

23 Rau, Allen, Agricultural Policy and Trade Liberalization in the United States, 1934-1956 (Geneva, 1957), 55–58Google Scholar; Dalton, Sugar: A Case Study, 75; Conkin, F.D.R. and the Origins of the Welfare State, 42-43.

24 Dalton, Sugar: A Case Study, 77-83; 837.61351/637 Hull [Duggan] to Welles dated May 12, 1933; Wallace, Henry Agard, America Must Choose (Boston, 1934), 1-3, 18–19.Google Scholar

25 611.373 Sugar/194; Dalton, Sugar: A Case Study, 80-81.

26 Ibid., 134-135; Benedict and Stine, Agricultural Commodity Programs, 292-293; Dalton, Sugar: A Case Study, 84-91.

27 In return for withholding plantings, domestic beet sugar producers were granted money compensation. Concerning the Jones-Costigan Act, see Dalton, Sugar: A Case Study, 92-106, 252-255; Buell, Raymond Leslie, Problems of the New Cuba (New York, 1935), 258–263Google Scholar; 611.3731/503-1/2; 811.6135/67, 77, 91.

28 For the United States effort to overthrow the Grau government, see Benjamin, “United States Hegemony in Cuba,” ch. IX.

29 R.G. 151, B.F.D.C, Report of Commercial Attaché, Havana, September 30, 1933, “Cuba's Foreign Trade dining the First Five Months of 1933”; OF159 Cuba, Box 1, “An Analysis of the United States Export Trade with Cuba,” by Phillip Jessup, presented to the Honorable Franklin D. Roosevelt, dated July 10, 1933, F.D.R. Papers; 637.113/28-73 “The Effects of Increased Cuban Tariffs upon Imports from the United States”; Box 19, letter from Mario Lazo to Jessup dated August 24, 1933 and Jessup “An Analysis of the U.S. Export Trade with Cuba,” pp. 30 and 101, Phillip Jessup Papers; R.G. 151, B.F.D.C, O46Cuba letter W. L. Thorp (Director B.F.D.C.) to Juan Trippe dated November 1, 1933.

For a discussion of Japanese competition, see 610.9417/4, 7 and 11; R.G. 151, B.F.D.C, Report of the Commercial Attaché, Havana, Special Report #4, September 28, 1933.

30 R.G. 151, B.F.D.C, 041.2Cuba, Correspondence from Export Firms; R.G. 353, Records of the Inter Departmental Committee on Reciprocal Treaties, 1933, Box 1, Minutes of the Meeting of the Committee for South America, September 25, 1933; R.G. 16, Correspondence File of the Secretary-Executive Council, 1933, Reports from the Secretary of State, October-December 1933; 611.3531/232.

31 Foreign Relations of the U.S., 1934, V, 129-134; U.S. Department of State, “Trade Agreement signed by the United States and Cuba,” Press Releases, August 24, 1934; U.S. Tariff Commission, Foreign Trade of Latin America (Government Printing Office, 1942), Part II, vol. 2, 249–253Google Scholar; 611.3731/581A, 583, 609A, 612A, 684, 732A, 733, 803, 879, 1391-1/2, 2038.

32 Foreign Relations of the U.S., 1933, V, 546.

33 Foreign Relations of the U.S., 1933, V, 578-580.

34 Ibid., pp. 578-580; Box 37 (State Department) “Possible Plan for Emergency Financing in Cuba,” Charles Taussig Papers; 837.51/1579-1/2, 1582-1/2, 1588, 1611; R.G. 84, F800Cuba/1933, vol. 18/851.0, Nufer to Welles dated August 19, 1933.

35 Foreign Relations of the U.S., 1933, V, 581-588; 837.51/1612-1/2 “Schedule A” and “Supplement.”

36 For the withholding of silver coinage, see Foreign Relations of the U.S., 1933, V, 568-569; 711.37/200. For the delay of disaster relief, see 837.48Cyclone of 1933/1-6, 10, 30. For the withholding of United States funds from the Havana-based Inter American Trademark Office, see 710.D4/492-504.

The systematic effort by the United States to deprive the Grau government of economic assistance and even normal economic intercourse again marks Cuban policy as a forerunner of later policies that punished uncooperative or hostile regimes by withholding of capital, manipulation of market prices, embargoes, etc. Economic “destabilization” was an important component of the policy by which the United States was able to remove Grau from office. See Benjamin, “United States Hegemony in Cuba,” ch. X.

37 837.48Relief Measures/1, 1-1/2, 1A, 2; 611.3731/480-1/2, 482-1/2, 483-1/2.

38 The first Export-Import Bank had been set up a few months earlier in order to accomplish a like result with the U.S.S.R.

Mendieta received a second loan for the same purpose in the amount of $4,400,000 in December 1934. Further relief was provided by acceptance of a debt moratorium. See 837.51/1643, 1772, 1782, 1889-1/2, 1909-1/2; Smith, The United States and Cuba, 163, 170; Nixon, Edgar B., ed., F.D.R. and Foreign Affairs (Cambridge, Mass., 1968), I, 663–664Google Scholar.

39 In recent years, scholars have tended to interpret New Deal economic policies as illustrating greater continuity with those of the Progressive tradition and the Hoover administration. Nevertheless, what appeared in the early thirties as doctrinal carry-overs had become by the late forties qualitative distinctions of great significance. On this subject, see: Williams, William A., The Tragedy of American Diplomacy (New York, 1972), ch. VGoogle Scholar; Bernstein, Barton, “The New Deal: Conservative Achievements of Liberal Reform,” in Towards A New Past (New York, 1968), 263–288Google Scholar; Seidel, Robert N., “Progressive Pan Americanism: Development and U.S. Policy, 1906-1931” (Doctoral Dissertation, Cornell Univ., 1973), 640–645 and 649-654.Google Scholar