[Letter from R. M. Armstrong, June 10, 1965] Page: 1 of 6
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[NTER-OFFICE LETTER
FOR Xt1 C&H FILE DATE June 10, 1965
SUBJECT Contract Negotiations
WRITE ON BUT ONE SUBJECT TO BE USED BY ALL OFFICERS OR DEPARTMENT
ON THIS SHEET HEADS FOR INTER-OFFICE CORRESPONDENCE
Meetings were held June 7 and 8, attended by Messrs. Maclean,
Marshall, Brooks, Louviere, Armstrong, Williams, and Kempner.
Impeii al took the position that the hastily negotiated contract was pre-
dicated upon C&H's assurance of 1,000 tons per hour average discharging
rate, which was to compensate Imperial for the Galveston investment.
Also hastily negotiated were the terms of payment, including price,
stevedoring allowance, laytime provisions, and demurrage liability.
Since the contemplated discharge rate has not been reached and the con-
tract has not worked out as anticipated, our position is that the entire
contract should be renegotiated. Imperial has not realized sufficient
income at Galveston to amortize the investment, and the concessions
made in the contract terms are costing Imperial $231, 000 more than the
terms regularly available to us in the open raw sugar market. These
figures are spelled out in detail in the attached.
In addition, we have been notified by the Coca Cola Company that the
inflexibility of the pricing terms of our C&H contract makes it un-
attractive for them to do business with Imperial under the arrangement
we have had for so many years. We will probably come up against the
same thing in our toll contracts with Dr. Pepper and Pepsi Cola. Further,
our inability to fix our price frequently places us in a bad competitive
position on our other sugar, and, particularly, in the growing industrial
business.
C&H took the position that there was a possibility that they and Reynolds
could improve the discharge rate, that they did not agree with our figures
as presented in the attached, and that they thought the terms of the contract
were fair enough. They felt that the average pricing was a great advantage
to Imperial, as was the regular arrivals of large, fast discharging vessels
of high quality raw sugar and the dependable source of supply- They also
called attention to the fact that they had expected us to phase out Louisiana
raws and increase the number of annual shipments received from Hawaii
instead.
We agreed that there were some advantages to us in the uniform quality
of Hawaiian raw sugar but that we could find no particular advantage in the
large ships. The advantage of average pricing is questionable, particularly
in view of its inflexibility and probable effect on our industrial business.
We had made no committments to replace Louisiana raws with Hawaiians,
and in any event could not afford to do so due to the price advantages
recently inherent in the Louisiana selling practices.
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Armstrong, Robert Markle. [Letter from R. M. Armstrong, June 10, 1965], letter, June 10, 1965; (https://texashistory.unt.edu/ark:/67531/metapth1210426/m1/1/: accessed July 17, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting Rosenberg Library.