841.6176/5: Telegram
The Secretary of State to the Ambassador in Great Britain (Houghton)
232. Delegation under chairmanship of Frederick C. Hood of Watertown, Massachusetts, representing Rubber Association of America, discussed with me today the situation respecting supply of crude rubber from British possessions under the Stevenson Plan. Price appears to have more than tripled since first of year and supply even at new prices and with additional 10 per centum release expected August 1 considered entirely inadequate. July 16 price quotation $1.15 per pound.
Associated Press dispatch London July 13 quotes Ormsby-Gore as announcing that day in House of Commons that if extraordinary prices continue the situation would without doubt have to be re-examined. He added that legislation would be required in Ceylon, Federated Malay States and Straits Settlements.
This is a matter of very great concern in this country. Please give it your most careful thought and attention and unless you perceive objection to such a step, seek very early opportunity to press the Foreign Office informally for action to relieve the situation. You will, of course, have in mind the entire absence in the United States alike of export duties and restrictions on production of raw materials, for many of which British manufacturers depend very largely upon this country. You may have occasion to suggest creation of a new committee to examine the situation from a disinterested point of view unlikely to [Page 254] be found in the Committee which itself proposed the Stevenson Plan. Possibly the most available present aid would be larger release, say 20 per centum instead of the expected 10 per centum August 1.
[Paraphrase]
The American consul at Penang cabled on July 1483 that Malay estates apparently were unable to materially increase their present output due to the fact that the standard production accredited to them was really beyond their capacity to produce and also because of a labor shortage.
You may want to consult consulate general. Keep Department promptly and fully informed.
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