800.6354/310: Telegram

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

5799. Embassy’s No. 4320, September 16.

1. Following is official communiqué issued this evening by the International Tin Committee after a rather difficult session:

(a)
At a meeting of the International Tin Committee, held at London on the 1st December, the question of the continuation of the present tin control agreement, which expires on the 31st December, 1941, was again considered.
(b)
The Governments of Bolivia, the Belgian Congo, the Netherlands East Indies, Nigeria and Malaya have accepted the standard tonnages recommended by the Committee and have agreed also to the draft agreement proposed for the regulation of tin control for a further period of 5 years from the 1st January, 1942. “The Government of Thailand has not yet accepted either the form, or the whole content, of that draft agreement; and it rejects the standard tonnages proposed. Alternative proposals have been made by them, which the Committee is unable to recommend for acceptance.”
(c)
The Committee have recommended to the Governments mentioned in paragraph (b) above, that the control agreement, drafted by the International Tin Committee, and the standard tonnages proposed by them should be accepted; and that tin control should continue in accordance with that agreement, even if the Government of Thailand should finally be unable to accept the draft agreement, and the standard tonnages the Committee propose. They trust, however, that the Government of Thailand will accept, prior to the 31st December, 1941; if they are unable to do so, the Committee hope that they will, at a later date, be in a position to rejoin the other Governments in continuing to exercise control, on the terms which the International Tin Committee recommend, and which Governments, representing approximately 93 percent of the recent production of the present signatory countries have already accepted.
(d)
Should the Government of Thailand eventually decline to join in the system of control, the Committee have suggested certain alterations in the scheme to safeguard the position of the participating countries.
(e)
On the assumption that the five Governments mentioned in paragraph (b) will accept the above recommendation, the Committee have fixed the quota, for the period from the 1st January to the 30th June, 1942, at 105 percent of the new standard tonnages. This percentage corresponds closely to 130 percent of the standard tonnages under the current agreement. “The standard tonnages proposed in the new agreement are as previously given.” (Tonnage figures given in official communiqué therefore omitted.) “Thailand, is included in the total of 251,400 tons.” These tonnages are in proportion to the exports from the countries specified, during the period from the 1st July, 1940 to the 30th June, 1941.
(f)
The Committee also recommended that the present buffer stock scheme, which would normally expire on the 31st December, 1941, should be continued with effect from 1st January, 1942, for the period of the main tin control scheme. A draft agreement, giving effect to this decision, has been forwarded to the Governments concerned, including the Government of Thailand.
(g)
If these recommendations are accepted by the Governments concerned, the agreements will be published as soon as possible.

2. The Committee has approved the Lowinger contract with Metal Reserves88 and has agreed to do all it can to implement this contract.

They have also passed resolution to which no publicity is being given recommending detailed measures to the various governments concerned with respect to the license provisions which these governments should introduce to control exports to the United States.

The Committee hopes it will be possible to publish simultaneously in New York and London the text of the final arrangements when convenient.

3. The Committee have actually prepared two draft schemes for the renewal of the agreement; the present new agreement on the assumption that Thailand will shortly acquiesce and the second that the Thais will refuse to participate.

The second scheme cuts out all reference to Thailand and makes the necessary alterations in the basic tonnages. The tonnage in the escape clause (article 16) has been raised from 12,500 tons to 18,000 tons for the 6 months, or 20% of world production, whichever is the lowest, with the same 6 months’ notice.

A new provision in the escape clause is that if there is a unanimous agreement among the participants to end the control scheme it can then be ended at the end of any quota period without further formalities.

4. The background to the Thailand difficulty according to a well-informed source has little if any relationship to the Japanese situation. It is considered that the points raised by the Thais are too petty for Japanese to worry about and claim is made that it is “the usual [Page 528]difficulty of Bangkok wishing to throw its weight about and to haggle in the hope of getting something for nothing”.

5. The Thai Government put forward the claim that they could not agree to various allotments of standard tonnages suggested by the Tin Committee for the new agreement, as during period from July 1, 1940, to June 30, 1941, when quota release was 130%, it was impossible because of war for Thailand to procure the necessary mining equipment for increasing tin output.

The Thais therefore submitted new proposals offering to forego their former demand for an increase of standard tonnage, suggesting a return to the standard tonnages prevailing before the new agreement reached today. They added that if the Committee should, however, desire to increase standard tonnage of any other country such increase should be accorded proportionately to Thailand.

Subject to the Committee’s acceptance of the above proposal, Thailand stated it was prepared to renew agreement for another 5 years and to abandon its former claim for the increase of its standard tonnage up to 20,000 tons for the last 2 years (see Embassy’s no. 6355 [3655], August 15).

With regard to the minimum guarantee of 11,000 tons the Thais insisted upon its retention. However, subject to the acceptance by the Committee of the Thai proposal to maintain the old standard tonnages Bangkok stated it would agree to relinquish its claim for the increase of the minimum guarantee from 11,000 to 12,000 tons for the last 2 years which was advanced by Thais on August 15 last.

6. As the communiqué indicates Thai proposals met with a flat turn down. A check up made by the chairman International Committee with leading English and Australian concerns operating tin properties in Thailand indicates Thai’s mines had no greater difficulties in getting machinery and mining equipment than Malaya or other tin areas. All equipment buyers since the war, it is stated, have been put on a roster by equipment manufacturers who have filled these orders in strict priority according to date of commitment.

7. Pearce represented Bolivians and according to reliable authority was most difficult particularly with respect to American requests for export licenses. Dutch and Lowinger on the other hand were most helpful.

Hart made a motion for the benefit of Thailanders and stated in essence that the control scheme had developed a gradual rapprochement between producers and consumers with such success that it was certain consumers in the future would make every effort to obtain their supplies from those who agree to help in the maintenance of an orderly control arrangement.

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8. The present expectation is that Thais will not agree to a new agreement before the end of the year, their agreement later depending largely upon political developments.

9. Authorities here express—strictly informally and off the record—the hope that when political conditions in the Far East permit, United States will give such aid as may be feasible to indicate to Thais disadvantages to them of being outside of new agreement.

Winant
  1. Contract signed October 9, 1941, providing for the purchase of 100,000 tons of tin at 50¢ a pound.