811.24 Raw Materials/944: Telegram
The Secretary of State to the Ambassador in the United Kingdom (Kennedy)
886. Your 1247. For your information, the Federal Loan Administrator has been instructed by the President to do whatever is necessary [Page 293] to assure the acquisition of adequate additional stocks of rubber and tin in the United States as soon as may be feasible. To this end he is discussing with the interested industries the creation of new corporations to carry through the necessary buying program with the support of the Reconstruction Finance Corporation.
This problem of organization is a novel one and requires education in the interested industrial circles. It is impossible to tell exactly how promptly it can be organized and brought into effective action. The President’s desire is that it be done with all urgency. There is no doubt that this purchase program will be carried through either by this method or by some other and you are authorized to give assurances to that effect to the British authorities.
It is unlikely that in the case of rubber the new organization will be able to step into the market as early as the 21st. We are willing to give prompt consideration here to the possibility of the issuance either here or in London of a statement revealing the American Government’s buying intentions in general with the idea of sustaining the market subsequent to quota announcement.
As part of the defense program it is important from our point of view that the needed additional stocks be procured at a reasonable price and we fully expect that the British authorities will respond to this wish and by their quota decision meet it. It may well be however that when the corporation is formed it will wish to negotiate on a specific price and quantity basis with the British and Dutch authorities.
If as the dates for the Rubber Committee and Tin Committee meetings approach there is hesitation on the part of the British authorities to support the full quota releases requested on the score that our buying arrangements are still too tentative, it may be possible to work out with them an arrangement whereby an extra quota release could be announced for the purpose of supplying American stocks to be available as soon as American plans are definitely arranged.
Confidential for your guidance: The President now believes that the question of the acquisition of sufficient reserve stocks of all strategic raw materials is of the utmost national importance. We will do everything possible to satisfy the British and Dutch authorities as to the maintenance of a satisfactory price situation. But if because of the complications to be overcome, the specific form of assurance at any given moment should not be complete, and the producers face some price risk, we should still feel ourselves justified in asking the British authorities to proceed anyway with adequate quota releases. The President has not been consulted on this particular point but I am of the opinion that he would press this matter with the full weight of all our influence upon the British Government.