841.6176/45: Telegram
The Ambassador in Great Britain ( Houghton ) to the Secretary of State
[Received 11:45 a.m.]
372. Your 352, December 1, 3 p.m. Saw Chamberlain late yesterday and made statement as directed.
[Page 266]Chamberlain said very frankly that he too had known nothing of the negotiations being carried on by certain American[s] until just before he had spoken to me. He does not know whether negotiations were initiated by Churchill or by the Americans, but in any event, he says his Government can hardly be supposed to have knowledge of American law and to determine whether or not persons applying to it are within their legal rights.
Chamberlain went on to say he had promised me an answer before he left for Geneva and that he had put his answer in the form of an aide-memoire and that he thought on the whole he had better make the answer as he had originally planned. He then read me the following statement:
“In view of the continued high prices of rubber His Majesty’s Government have decided that the exportable percentage of rubber from Ceylon and Malaya on the first February next shall be raised 15 points to 100 percent of the standard production instead of to 95 percent which would be the normal figure on that date under the rubber export restriction regulations. This constitutes the maximum measure of relief which can be made effective in the time and it will in fact be equivalent to the virtual suspension of the existing restriction on exports of rubber.
It may further be stated for the very confidential information of the United States Government that the above represents an interim measure pending the probable introduction of a modified scheme which has for some time been engaging the earnest consideration of the authorities. Various proposals for a modification of the existing scheme have been studied with a view of meeting the present abnormal situation. The advisory committee over which Lord Stevenson presides has already been in consultation on this subject with the more important United States rubber-using interests and His Majesty’s Government are now awaiting a further expression of the views of those interests before finally reaching a decision. A certain amount of delay is naturally entailed by this consultation but every effort is being made to hasten the proceedings.
The United States Government will readily agree that to give any publicity to the fact that a revision of the scheme of restriction is under consideration would create extraordinary difficulties in the rubber market and could only do harm to all concerned until such time as the new arrangements have been definitely settled.
The advisory committee have expressed themselves as most willing in the future to meet the representatives of the United States rubber industry in informal conference either at periodic intervals or whenever the representatives in question may find it convenient to come to this country for the discussion of matters of mutual interest.”
When Chamberlain finished reading he said again that this was the answer he had originally planned to make but that in view of my representations this answer need not now necessarily be regarded as final. He stated frankly that he thought there was little hope that his Government would change their position. He believed the plan [Page 267] was useful and perhaps necessary to enable rubber production under proper conditions and he pointed out that the laws controlling and restricting output are local laws enacted in Ceylon or the Malayan States and the like.
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Chamberlain leaves for Geneva tomorrow. I fancy, therefore, some weeks will elapse before any reply is vouchsafed.
Official notice has been received today that percentage of rubber for export for the quarter beginning February 1st next will be raised by 15 points to 100 percent. See Embassy’s 338 November 3 [2?], 11 [10?] a.m.95
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