811.24 Raw Materials/1361: Telegram
The Chargé in the United Kingdom (Johnson) to the Secretary of State
[Received November 12—6:17 p.m.]
3709. (1) The following comment has been received from the Colonial Office on Singapore’s November 5, 6 p.m., which was repeated to the Department November 7:
“Very many thanks for your letter of the 7th November enclosing an extract from a telegram which you have just received from Singapore. We have discussed this question pretty often, and I feel we know each other’s views fairly well. As you know, our wish is to give you all possible help in getting the rubber that you want as soon as it can be produced, provided that this is done in an orderly fashion and that the future of the industry is not prejudiced. It seems to me that the proposal to increase the quota for the fourth quarter from 90 to 120 percent in order to look after a possible small excess export from Malaya in the fourth quarter on the present basis is an extreme example of taking a sledge hammer to crack a nut. My present inclination is to give the Governor a private tip that he should send out as much rubber as he can, even if it involves a technical breach of the agreement, affably to send in the most profuse apologies afterwards. However, as you probably know, there is a meeting of the International Committee on the 19th instant, and I am passing on your letter to Campbell and Figg so that they may consider what will be the wisest course to adopt at that meeting.”
(2) The International Rubber Regulation Committee is most anxious to have Hay present at its next meeting and will in fact defer the meeting if he does not arrive on time. Since the Clipper had not left New York when last news was received deferment of the meeting seems probable. The Committee has supplied the following copy of Hay’s telephonic commmunication of November 7 and a reference to this has been made in the Embassy’s reply to the Colonial Office letter quoted above:
“Despite the Committee’s earlier action in releasing bigger quantities of rubber, the Rubber Reserve Company are finding it difficult to purchase any considerable quantities within the prescribed price limit and they draw the conclusion that supplies are hardly equal to demand. At a meeting on Tuesday39 Mr. Jesse Jones (the Minister of Commerce and Administrator of Reconstruction40) urged upon me the desirability of releasing rubber in such volume as will permit of the accumulation of stock within the United States at a greater rate than that stipulated for in the agreements of June and August;41 [Page 278] he informed me that he is being subjected to increasing pressure, particularly in the form of a demand to finance projects for the production of synthetic rubber in large quantities and he feels that the most effective answer to such demand would be the possession of large stocks of physical rubber within the borders of the United States. I am of the opinion that the statement has greater significance than a good tactical argument.
I have explained to him that the Committee in deciding upon releases must have regard to the probable consequences in producing territories of an abrupt and severe drop in production, which it seems to the Committee must follow on the completion of the United States’ abnormal demand. To ameliorate this situation, Mr. Jones is willing to increase the purchases of the reserve company by 100,000 tons above the amount stipulated for in the agreements of June and August, and I have received a letter from him to that effect.
In respect of this quarter I again recommend that the Committee should at once encourage not only Malaya, but also the Dutch East Indies and any other territory, to exercise their right under article 5 (1) and I am asked that in respect of the first quarter of 1941, the Committee should most seriously consider whether they cannot permit releases to the extent of 100% or as near thereto as practical of realization.
The United States estimated consumption for 1941:
| Quarter | Long Tons |
| 1st | 159,000 |
| 2nd | 157,000 |
| 3rd | 146,000 |
| 4th | 150,000 |
| Total | 612,000 |
I can amplify the foregoing after my arrival, but I hope that by this message I shall be successful in giving an understanding of the situation here. My relationships with all concerned here continue to be cordial and very friendly. The present rubber situation is regarded here as an opportunity for practical cooperation between the principal countries concerned to the general advantage of all.”