856D.6176/409: Telegram

The Ambassador in the United Kingdom (Bingham) to the Secretary of State

179. The discussion of the rubber situation was mainly occupied by Sir John Campbell’s reiteration of the points made in the British Government’s note (see my 139, March 12, 7 p.m.).

In addition he particularly stressed that the failure of the American manufacturers to live up to an alleged agreement to make regular purchases beginning in the early summer of 1936 had prevented the Committee from increasing the quota at the following meeting and in turn contributed materially in creating the present situation.

It was also stressed that everything possible was being done in the immediate situation by the Rubber Producers Committee to increase world rubber supplies.

Atherton and Butterworth abided strictly by the Department’s instruction 108, March 27, 3 p.m. and maintained the viewpoint that the [Page 902] American Government’s attitude remained in seeking fulfillment by the British Government of the assurances given in 1934.

In the course of the discussion it was emphasized by Campbell more than once that the price the Producers Committee considered fair and equitable was 9 pence which had been arrived at by an elaborate costing system which in turn had been approved by the Consumers Panel.