800.6176/95: Telegram

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

1442. Since sending my 1424, September 4, 1 p.m.,49 I have continued to try to make progress with the agreement rubber problem but it has proved impossible to get in touch with Campbell, and the other officials concerned do not know whether he still intends to adhere to the previous arrangements of arranging for action by the Rubber Committee on September 7. The rubber market is scheduled to open on that same day and they obviously do not know what the probable market reaction will be or whether ships will be available, etc., etc. However, Ministry of Supply which has taken over the rubber–cotton agreement asked whether the United States Government now intends to hold such rubber as is made available under the agreement as a reserve or to make it available to the trade. It seems to me that it is obviously in our interest to build up this reserve stock (which we will be free to liquidate if need be) and continue to urge that commercial rubber be made freely available. The Ministry of Supply would appreciate a prompt answer if possible.

Ministry of Supply anticipates that shortages of cases will occur since they are imported from Sweden and therefore asks for greater latitude in the number of nine boxes to a ton purchases and at the same time issues a warning that baled rubber may of necessity have to be supplied at some given point.

Ministry of Supply also asks if we will accept some No. 1 rubber since at least initially they will be beginning their purchases under unusually difficult conditions and they wish to avoid as much as possible disturbance or differentials and therefore require latitude.

Ministry of Supply also desires that the United States consuls in the east when they give a receipt for the copy of the bill of lading and weight notes will also issue a certificate accepting responsibility for war risk. This is required so that the documents can be negotiated. Otherwise the banks would refuse to accept them. Incidentally this is a usual practice when blanket insurance is taken out and the National City Bank in Singapore would have a form which would undoubtedly be acceptable to all concerned.