The Ambassador in the United Kingdom (Winant) to the Secretary of State
[Received 7 p.m.]
1171. Department’s 955, March 21, 7 p.m. The proceedings of the Tin Committee show the following proposal for the new standard tonnages, which was introduced by Sir John Campbell and carried by 13 votes to 1, Bolivia being the only dissenting vote, with Thailand not voting.
“Under article 3 of the Agreement for the International Control of Tin at present in force, the I. T. C. recommend that the Agreement be continued for a further period of 5 years, with effect from the 1st January, 1942. They also recommend that the parties to the continued Agreement should be the existing signatories, with the exception of French Indochina. (If effective contact can be established with the Government of Indochina before any continuing Agreement is signed, Indochina should, if that can be secured, be a party to the continued Agreement.)
“The Committee suggests that the following amendments should be incorporated in the new Agreement:
- “(I) The standard tonnage for each territory should be the permissible exports from that territory for the period from the 1st July 1940 to the 30th June 1941, if the exports from that territory, during that period, have equalled, or exceeded, the permissible exports. If the exports have been less than the permissible exports, then the standard tonnage should be the exports during the period.
- “(II) If, however, hostilities should occur in the Far East in which either the British or the Dutch are involved, prior to the 30th June 1941, then the period taken as the basis in (1) should be replaced by the period from the 1st April 1940 to the 31st March 1941.
- “(III) Such minor and consequential amendments as may be recommended by a subcommittee, composed of one nominee from each delegation present at this meeting, should be incorporated in the continued Agreement.”
(Campbell explained that (I) was designed not only to reduce the Bolivian standard tonnage, but to prevent that of the Dutch from rising above full exports at 130% during the period envisaged.)
(1) Patiño argued against this proposal and after it had been carried said that “neither he, nor his delegation, nor his Government, were fully of the opinion which had been passed by the Committee”. He then made the following counter-proposal, which was not accepted by the Committee:
“He pointed out that there seemed to be a possibility of securing unanimity. His calculations suggested that, at the present moment, Bolivia was producing approximately 96% of their standard tonnage. The difference was very small in terms of concrete tonnage: perhaps about 2,000 tons only; and he stated, for the consideration of the Committee, that he would be willing to support the proposal which had been passed by the Committee if they were to add to that a recommendation that the standard tonnage of Bolivia should not be reduced below its present figure. The actual quantities involved were comparatively trifling.”
(2) Since the Bolivians had not therefore accepted the Committee’s conclusion, Clauson81 and Campbell were interviewed by the Embassy in order to obtain further background on the proceedings and on what was likely to be the attitude of the British Government towards such representations as are proposed in the Department’s 955, March 21, 7 p.m.
(3) Campbell, the only one of the two who attended the meeting, was interviewed first and went over briefly substantially the same story about cool relations between Patiño and Van den Broek as was covered in the Embassy’s 4149 of December 1940; and gave it as his opinion that Van den Broek would never consent to the Bolivians retaining 46,000 tons standard tonnage, and would rather see the Tin Committee agreement broken than give way; while he also thought that the Bolivians would give way even if not until the last moment. He based this on their degree of dependence upon tin production and the fact that, as the highest cost producers, they could not afford to see the agreement broken. He added that the only possibility (and he evidently considered it a doubtful one) of retaining for the Bolivians their present standard tonnage would be cooperative action by the British and United States Governments. It was not apparent whether his reference to this possibility was in any way connected with the pending British-Bolivian tin agreement (discussed in Embassy’s 1120, March 21st82), but at any rate he took occasion [Page 518]to discuss that agreement in some detail and to indicate his views that the Metals Reserve Company had no ground to feel apprehensive regarding its terms.
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(4) Clauson while agreeing with Campbell’s version of the basic facts took a different view of their present effects in several material respects. In the first place he regarded the Committee’s conclusion as of less importance than Campbell did pointing out that “the matter had now passed beyond the Committee stage and into the sphere of intergovernmental action.” He also almost at once indicated that the British Government would, in his view, be prepared to cooperate with the United States Government in putting pressure on the Dutch to agree in whole or in part to the Bolivian counter-proposal mentioned above.
He made it clear, however, that this conclusion of his was reached for reasons different from those stated in the Department’s 955 which were informally communicated to him. He is convinced that the Bolivian’s maximum possible production is now in the neighborhood of 40,000 tons and supports all Campbell’s allegations respecting the past unwillingness, inability or both of the Bolivians to abide by the terms of the international control agreement. He dissents from the view of the Malayan export tax expressed by the Department. His support for the Department’s final conclusion, however, is clear and he bases it largely upon his opinion that the Bolivians may in fact break the agreement if not given what they wish; that the maintenance of the agreement is a matter of very great importance for the stability of the tin producing industry; that, since the most important part of control is control as between Malaya and the Dutch East Indies, control should be maintained even at the cost of keeping the Bolivians in “on an unreal basis”. He feels that we also have an interest in price stability, i. e., in not risking undue price falls damaging to our heavy tin inventory acquired at high prices. Finally Clauson thinks that because of the general situation now obtaining our two Governments will probably be in a position to induce the Dutch to give way in spite of Van den Broek’s attitude.
(5) In view of Clauson’s attitude the only question now appears to be one of method of approach and on this he said he would favor similar communications from us to him and the Dutch simultaneously. He felt that a personal presentation to the Dutch Government now would probably serve no useful purpose in view of Van den Broek’s absence in the United States and that it would likewise serve no useful purpose for the Embassy to discuss the matter with the Bolivians here at this stage.[Page 519]
(6) In view of the foregoing and of the possibility that the Department may desire to modify the terms of the suggested communication to the Dutch and British Governments, the Embassy will refrain from sending any communication pending the receipt of further instructions.