856D.6176/496: Telegram
The Secretary of State to the Ambassador in the United Kingdom (Kennedy)
132. Your 254, March 28, 2 p.m. Within your discretion please express immediately through appropriate channels appreciation for the consideration which has been given to points raised by this Government, and in commenting on the subcommittee’s reported recommendations you have obtained through Viles, reemphasize our position as follows, with reference to the numbered points in the Department’s 107.
(2) It is hoped the committee will give further consideration to this point, since its recommendation will extend no new powers to the consumer representatives designed to increase their degree of influence on the operation of the scheme.
(3) The proposed addition to the preamble is welcomed, but it is our judgment that a fully effective statement should specifically couple the obligation regarding supply with explicit statement regarding price terms.
(4) (b) It is reassuring to learn that the committee directs its attention only to the cost to efficient producers. Nevertheless, it is our opinion that there is need, first for a clarification of the general statement of price objective so as to give explicit meaning in the agreement to the terms “reasonably remunerative” and “efficient producers,” and second for definite and reassuring interpretation of this price objective in the administration of the scheme.
(5) We appreciate fully the importance of careful preparation of a buffer stock plan and have no desire to urge the committee to precipitate action. Confidence in the scheme will be greatly increased, however, as soon as adequate reserve stocks are available for prompt release whenever other supplies are insufficient, and it is hoped that the committee will move promptly to develop a plan for such stocks.
Furthermore, this Government attaches great importance to its suggestion for assurance in the agreement that there shall be no discrimination in the release of rubber to friendly governments in time of war or other emergency; it would seem that such assurance could in no way hamper the effective operation of the scheme, and it is urged that it be added to the committee’s recommendations at this time.
(6) In view of the fact that the committee’s proposal regarding new planting is merely permissive and would provide no assured new planting, we urge that it consider liberalization of the proposed restriction [Page 937] in some form. It may be that the committee could recommend that growers be permitted without restriction to substitute newly planted acreage for old acreage now in production.
(7) We are disappointed at the rigid attitude of the subcommittee on this point. If there is no liberalization of the committee’s recommendation, it is felt that this matter may well afford a subject for inter-governmental discussion, especially in view of the new international interest in and discussion of export restrictions. This Government is unable to see any justification for an outright export prohibition of this nature, either by individual governments or by governments acting through international agreement. Such action by governments extends uneconomic monopoly control of commodities beyond the field of restrictive action that could be undertaken by private cartels.