[Enclosure]
The British Foreign
Office to the American
Embassy
Aide-Mémoire
His Majesty’s Government in the United Kingdom are confident that
United States consumers of rubber need have no fear of the Rubber
Regulation Scheme being detrimental to their interests. The
objectives of the scheme were set out in paragraph 5 of Sir John
Simon’s Note, No. W. 2742/89/29, of March 23rd last44 and His Majesty’s Government are glad to
note the approval of these objectives expressed in paragraph 2 of
the United States Aide-Mémoire of April
3rd.45 His Majesty’s
Government are sure that, now that they have the scheme before them,
the United States Government will agree that it is well calculated
to secure these objectives.
Most of the aspects of the scheme which affect the United States had
been fully dealt with in Sir John Simon’s Note No. W. 3750/89/29 of
April 26th.46 Now, however, that the actual producers’
Agreement is available, it is possible still further to elaborate
these points.
His Majesty’s Government are anxious to make quite clear the
essential difference between this Scheme and the Stevenson Scheme.
Under the Stevenson Scheme supplies depended entirely upon price,
and the machinery for increasing and decreasing supplies according
to price was clumsy, tardy, and rigid. The present Scheme seeks to
adjust supply to demand, without direct reference to price; supply
will also be adjustable at very short notice, since it will be
regulated entirely by the International Committee, the members of
which will be plenipotentiaries and will not have to refer to their
Governments before taking action. They will naturally work under a
sense of grave responsibility.
The United States Government will be familiar, from previous
explanations, with the nature of the provisions made for the
representation of consumers on the International Regulation
Committee. These provisions are contained in Clause 12 of the
Producers’ Agreement and in Article 18 of the Intergovernmental
Agreement. It will be noted that the Agreement provides that a panel
of three persons, one of whom will be a representative of
manufacturers in the United States, will be appointed within one
month of the Committee’s formation to tender advice as to world
stocks, the fixing and varying of the permissible exportable amount
of the basic quotas, and cognate matters.
[Page 661]
It has now been agreed between the United
Kingdom Government, the Netherlands Government, and the British
producers that after their appointment this panel of manufacturers’
representatives should always be present at all meetings of the
Committee while any matter affecting their interests is under
discussion. This decision expressly meets the point made in
paragraph 5 of the United States Aide-Mémoire
of April 3rd.
As has been explained in the immediately preceding paragraph, it is
intended that one of the three representatives of manufacturers
should represent United States interests. His Majesty’s Government
are anxious to obtain the appointment of influential and suitable
representatives and they would welcome suggestions from the United
States Government as to the most suitable person to represent United
States interests.
His Majesty’s Government desire to point out that this provision to
safeguard the interests of consumers goes beyond the conditions laid
down at the World Economic Conference, and far beyond the provisions
of any regulation scheme yet formulated in the United States, or
outside it, so far as His Majesty’s Government are aware.
It is not the intention of His Majesty’s Government that there should
be any undue rise in the price of rubber. His Majesty’s Government
are themselves immediately interested in the welfare of consumers as
well as of producers, since 80,000 tons of rubber were consumed in
the United Kingdom last year, and they are anxious to foster the
development of rubber manufacture in any way possible. They are also
convinced that any undue rise in price would not be in the long-term
interests of the industry. They understand that the Netherlands
Government share this view. In any case, were the price of rubber to
rise too high, the control of the export of native rubber from the
Netherlands East Indies would, in the opinion of His Majesty’s
Government, prove an insuperable administrative problem.
[London,] 30 April, 1934.
