856D.6176/146: Telegram
The Secretary of State to the Minister in the Netherlands (Swenson)
11. Your 8, February 26, 4 p.m. Have informed London to again press matter with British Government, in order to secure rights for consumers committee, and in order to get price protection.
We have told London that it 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.
[Page 627]There can be little doubt that if a restrictive rubber scheme is added to the already restrictive tin scheme and there is no adequate consumers protection, the development will be viewed with grave apprehension in this country. You may repeat this to the Dutch Government.