856D.6176/403: Telegram

The Minister in the Netherlands ( Emmet ) to the Secretary of State

20. Messrs. Viles and Blandin have just had a satisfactory talk with Dr. Colijn and Van Gelderen in my presence. The Premier agreed to all practical suggestions made and instructed Van Gelderen to support them in tomorrow’s committee meeting in London. He could only agree in principle, however, to Mr. Blandin’s suggestion of an immediate creation of a large buffer or cushion reserve stock, insisting that this was a long range proposition which was not feasible for the moment. He had no objection to 90% of free rubber for the second half of this year and agreed with the idea that authentications might be issued by the Committee which would serve to discourage speculation. Such a statement will be discussed tomorrow morning but it is difficult to believe that it will be adopted as suggested by Messrs. Viles and Blandin, severely denouncing present rubber prices and announcing that it is the purpose of the Committee to reduce the price. Dr. Colijn and Van Gelderen repeated their general assurance with emphasis and insisted that everything possible was being done to rapidly increase production in the entire East Indies area and that the figures for March would prove that this was the case although January and February fell below the quota limits. They insisted, however, that the statistical position was not as serious as outlined by [Page 900] the American consumer representatives, that in any case world rubber stocks had not fallen below 400,000 tons but added that the price of rubber was too high and that they were willing to do anything within their power to bring it down. Messrs. Viles and Blandin were fully satisfied with what they were told.