Office of the Historian

856D.6176/137: Telegram

The Secretary of State to the Ambassador in Great Britain (Bingham)

Washington, February 27, 1934—7 p.m.

68. Department’s 61, February 23, 6 p.m. Swenson at The Hague informs Department that Colijn willing to favor idea of consumers committee which though having no vote could participate in the meetings of the other committee and keep themselves currently and fully informed.

Colijn did not want British Government to know of this statement, but is prepared to support the idea when it arises in discussion with the British Government.

Will you, therefore, again press the matter on the British Government, making it a matter of record unless in your discretion that seems unwise.

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Department also informed that restriction agreement will be signed today by producers committees and that it is likely that this agreement will be adopted by the Governments.

It, therefore, seems to be essential at once to seek some price assurance. The best assurance, it seems to the Department, would be a maximum price at which any quantity of rubber desired could be secured. One aspect of the price control program that requires emphasis is that if the committee sets a far-reaching restriction percentage, such as the 50% restriction which has been discussed and stocks begin to decline, there is always a grave danger that a price panic will ensue and that those rubber manufacturers who happen to have very small stocks will bid the price up to a panic point, as was done under the Stevenson Plan. Subsequently a price collapse would then threaten the financial solvency of all manufacturing rubber interests as it did after the Stevenson collapse.

In view of the Prime Minister’s part in the Economic Conference, I request you to take matter up directly with him.

There can be little doubt that if a restrictive rubber agreement is added to the already restrictive tin agreement15 and there is no adequate consumers protection there will be serious apprehension in this country. You may say this to MacDonald.

Hull
  1. For text of tin agreements, see International Labour Office, Intergovernmental Commodity Control Agreements (Montreal, 1943), pp. 73–79.↩