811.24 Raw Materials/160: Telegram

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

407. Your 775, June 5, 1 p.m.

It is suggested that you urge strongly acceptance of a specific past base period of prices, using arguments which you believe would be most effective. This would have the great advantage of certainty and it is believed would be received most favorably in Congress.
If absolutely necessary we might agree to prices (for the purpose of determining quantities to be exchanged) prevailing during the period of delivery of each commodity; the period of months over which delivery would be made should be specified in the agreement although this period of time would not necessarily be the same for all commodities.
In the event that the agreement specifies such an uncertain future price basis, a clause should be added to the effect that the two governments would consult regarding a modification of this price basis should the price movements during the stipulated period of time prove to be abnormal.
If future prices are to be used, you will wish to emphasize the point that we will expect the British Government to arrange for such action by the International Rubber Regulation Committee as will prevent price increases resulting directly or indirectly from that Government’s purchases.