892.6363/142
The British Minister (Hall) to the Assistant Secretary of State (Acheson)
My Dear Mr. Acheson: I was very pleased to receive your letter of June 17 informing me that your Government had decided in principle to extend economic assistance to Thailand. Though it is, of course, fully recognized that the actual proposals will require considerable working out in detail we feel that there is a reasonable chance that an offer along the lines you suggest may have great influence with the Thai Government and prevent them from falling entirely under Japanese domination.
The urgent need of such influence is shown by the further deterioration of the position in Thailand since I wrote to you on June 4th. You will remember that in the instructions sent to Sir J. Crosby, he was to attempt to obtain a promise of 75% of the rubber and tin production in return for stated supplies of oil. In the event however, he has found [Page 181] it impossible to obtain the desired assurances since he has been informed that 30,000 tons of rubber (some 63% of production) have been promised to the Japanese, and that while satisfactory arrangements could be made as regards the tin, not more than 18,000 tons of rubber could be provided. Sir J. Crosby has advised in favour of an agreement—which, on our side would involve provision of the full monthly oil quotas as set out in my memorandum of June 4th51—even on these unsatisfactory terms, since he considers that it is essential to maintain as much influence as possible in Thailand and that if we have no agreement the Thai Government will turn entirely to Japan. In view of his strong recommendation to this effect, the British Government, while instructing him to make a further attempt to obtain at least 50% of the rubber production, have agreed to accept the above terms if he is convinced that they represent the best that can be obtained.
The situation may now, however, be changed in the light of the assistance which your Government is now prepared to afford, and the offer of substantial credits and facilities for the import of goods from this country may well affect the destination of the 30,000 tons of rubber which are said to have been earmarked for Japan. To what extent the Thai Government is already definitely committed to Japan for this quantity we do not know, but since your offer of financial assistance is to be to a great extent dependent on the assurances which the Thai Government can give you as to supplies of rubber and tin, there is reason to hope that they may still be able to find means to divert at least part of the 30,000 tons to this country.
I should welcome an early opportunity to discuss with you the next steps to be taken in this matter with the object of securing the maximum effect from a coordinated approach to the Thai Government.
Yours sincerely,