Memorandum by Mr. Thomas K. Finletter, Special Assistant to the Secretary of State
In Section 8 of the attached telegram 465,11 Mr. Peck suggests that the British might be persuaded to turn over to Thailand the dollars resulting from the purchase by the United States of the Thai rubber and tin.
This has already been done as to the rubber. It is my understanding that Metals Reserve is not buying tin from Thailand.
Recently the Rubber Reserve Company authorized the Department to approve on behalf of Rubber Reserve Company a plan whereby the East Asiatic Company will buy rubber competitively in the Thai market for joint Anglo-American account. The plan has just now been put into effect. The top price is 30 cents a pound; 11½ cents over the current market. The memorandum of the British, agreed to by the Rubber Reserve Company, provides that “payment for the total purchased must of necessity be made in sterling as payment partly in dollars and partly in sterling is not practicable. It is accordingly suggested that the dollars which we would acquire in payment of the American half be re-sold to the Thai Government for [Page 324] sterling at the official rate of exchange.” The effect of this is that the Thais will receive dollars for one-half of the total purchases.
Assuming that this buying program acquires 20,000 tons of rubber in one year at a price of 25 cents a pound, the total proceeds would be $10,000,000 which would make $5,000,000 available to Thailand.
This comment is not intended to be an adverse comment on Mr. Peck’s proposal for Export-Import Bank credit up to $5,000,000, for Mr. Peck states in his telegram that the dollars resulting from the rubber purchases would be inadequate. Mr. Peck was familiar with the proposal for this joint buying program on rubber before he left this country.