811.24 Raw Materials/317: Telegram

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

87. Your 172, September 13, 9 a.m. and Department’s no. 83, September 11. You are requested to press strongly on Dr. Hart the following considerations which seem to the Department and to American consumers convincing evidence that rubber releases for commercial uses must be increased by at least 10 percent for the fourth quarter:

Viles, for the Rubber Manufacturers Association, reports that American consumption is running considerably ahead of estimates, quite aside from the new speculative demand for finished goods which is coming into the market. Without including this latter demand, it is estimated that total consumption this year will be 550,000 tons and that more than a 5-percent increase in commercial quotas will be required merely to meet current consumption requirements. The American industry badly needs additional rubber, however, to add to stocks which are now at a level (160,000 tons at the end of August) which gives rise to anxiety.

It is believed that an announcement of a 10–percent increase in the quota for the fourth quota [quarter] is badly needed to check speculation. Such an announcement will be helpful even if it proves to be impossible to completely fill such quotas before the end of the year. We are convinced that there will be an active demand to add rubber to stocks over a considerable period of months and that additional rubber produced by the natives in the Netherlands Indies during the first quarter of next year, in lieu of added production during the fourth quarter, will be taken up immediately at that time.