811.24 Raw Materials/157: Telegram

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

404. Your 763, June 2, 2 p.m. It appears necessary, or at least very desirable, to submit the agreement when completed to Congress either in the form of a treaty or as a joint resolution. Amendment of the strategic materials purchase bill is impossible since Congress is now acting upon the conference report on that bill; in fact the House of Representatives have already passed it. It might be possible to meet the British concern over ratification, however, by providing that the agreement should lapse if not ratified within a stipulated period of time, say 1 year.

It should be possible to work out some price formula which would be agreeable to the British. If they are unwilling to accept a specific base period of market prices, then we would be willing to consider 1 year or a given period of months prior to the final consummation of the deal as a base period, or it might even be possible to leave the question of price open for final adjustment after ratification. We would have no desire to insist upon a price formula which might result in losses to the British Government if ratification were delayed here. However, the importance of the British Government in the international rubber regulation scheme should make it possible for them to guard against price advances; for instance, an announcement by the International Committee that export quotas were to be enlarged by a given percentage to meet the specific requirements of the British Government in connection with this deal should discourage attempts to run the price up.

Although we should like to secure tin as well as rubber we Would be prepared to accept rubber only if there is no other way to secure an agreement.