811.24 Raw Materials/127: Telegram

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

668. In the course of an exploratory conversation permanent officials of the Board of Trade indicated that it was now necessary for them to approach Sir John Campbell36 in view of the proximity of the Rubber Committee meeting and seek his advice regarding ways and means of obtaining extra quota supplies. They wish to regard the 500,000 bales as a “firm offer” and to leave the question of enlarging this amount and the question of wheat for further consideration and consultation. They asked about the proportion of tin and rubber and stated that their own rough calculations came to 12–13,000 long tons of tin and 36,000 short tons of rubber. They wish to know our proportion as between tin and rubber as soon as possible and they were promised it in a day or two.

They emphasize particularly the monetary and exchange problems involved and they obviously hope to persuade the Dutch and other producers to permit the British to supply most if not all of the required supplies. However they foresee Dutch opposition and that the Dutch may fear, in their relations with Germany, the precedent which this would establish; heretofore the Dutch have been able to resist German requests for bartered tin and rubber by pointing to the fact that their production of these commodities is controlled by international bodies.

The Board of Trade officials gave it as their offhand opinion that rubber would be an easier deal for them to do than tin. Do you by [Page 246] any chance wish to confine this 500,000 bale deal to a bilateral cotton and rubber affair? On a price basis it would be more favorable and later we could take out in tin any further concessions we can obtain on cotton and on wheat.

The Board of Trade expressed the view that it was very difficult to ascertain the price basis for an exchange until they knew what could be done with the regulation committees; that if we used the figure for which they were able to obtain the rubber, they would necessarily have to obtain the cotton at a figure below the market price, otherwise they could not defend securing cotton under an obligation to hold it at a price which even the Liverpool market now considered sufficiently high that it was not buying.

Unless it is urgent for Dr. Black to leave London next week I hope that you can arrange that Agriculture permit him to stay on to help as was implied in the last paragraph of your 267, April 18, noon.

  1. Chairman of the International Rubber Regulation Committee.