Abstract: This paper examines the quota assignment rules established in the legislation that government sugar controls in the United States under the Agricultural Adjustment Administration beginning in 1934. It presents data on the assignment and fulfillment of quotas on domestic production and import quotas, which permits an examination of the role that Cuba played in making the program function as a price stabilization program. It finds that that Cuba served as a “shock absorber” or a “producer of last resort,” as it stood prepared to absorb a demand shock of considerable size. Data on excess production capacity in Cuba and domestic suppliers show that Cuba was in a unique position because of great excess capacity caused by its own political and institutional response to the world crisis. The argument that Cuba was ready to step up to a sudden change in the demand for sugar is confirmed as war emerged in Europe in 1939. The long-run consequences are, as in Krueger’s analysis, unintended. One can surmise that, if the United States had any part in the rise of Fidel Castro to power in 1959, the persistence of the U.S. sugar controls in the form they took on cannot be dismissed as a principal cause.

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