811.20 Defense (M) Colombia/87b

The Secretary of State to the Ambassador in Colombia (Lane)

No. 135

Sir: There is enclosed a draft of agreement65 between Rubber Reserve Company and the Republic of Colombia providing for the purchase by Rubber Reserve Company of the exportable surplus of wild rubber produced in Colombia. The agreement has been drafted on the basis of the telegrams recently exchanged between the Embassy and the Department of State.

It will be noted that under paragraph 6 of the agreement a development fund of $500,000 is to be expended by Rubber Reserve Company. Promptly upon the execution of an agreement, Rubber Reserve Company plans to establish an agency in Colombia in order to correlate all plans of this Government with respect to rubber development work in Colombia. Such agency would, of course, operate under the supervision of the Embassy and only to the extent approved by the Government of Colombia. This agency would be under an administrative head, would furnish all necessary technical and advisory assistance, and would make and carry out all necessary arrangements relating to the purchase of rubber by Rubber Reserve Company.

It will be noted that certain provisions of the contract are given in general terms. In other countries it has been found desirable to commence operations on this basis and to work out the details as the matter proceeds. The organization which it is planned to send to Colombia [Page 185] will be prepared to discuss and decide these matters, which include the price differentials to be paid for various grades of rubber.

Paragraph 3 of the draft agreement provides for the fixing of an amount as sufficient to satisfy the essential requirements of Colombia for rubber products. On the basis of information available here, it appears that this amount should be somewhere between 500 and 1,000 tons per annum, and you are requested to determine the amount within these limits which you would consider reasonable. It will be noted that the agreement contemplates an increase in this amount for justifiable causes.

It will be noted that the price fixed for rubber of the equivalent of Upriver Acre Fine runs for the term of the contract rather than being limited to the first 2 years of the contract as stated in the Department’s telegram no. 632 of May 30, 1942. It is believed desirable to have the price for both this type and for castilloa scrap in effect for the same period of time.

It is suggested that the Ambassador request the appropriate officials of the Colombian Government to limit to the United States the export of crude rubber and rubber products pending the signature of the agreement.

It is also suggested that when an agreement on the form has been reached, the contract be signed by the Republic of Colombia and forwarded to the Colombian Embassy here for delivery to the Department to obtain the signature of Rubber Reserve Company. At that time notes will be exchanged here between the Department and the Colombian Embassy concerning the execution of the agreement.

Very truly yours,

For the Secretary of State:
Dean Acheson
  1. Not attached to file copy.