811.20 Defense (M) Colombia/94: Telegram

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

814. My 794, June 15, 9 p.m.; and 809, June 17, 9 p.m.66 Minister of National Economy made following comments to Pocklington and me today regarding draft agreement dated June 5, 1942 between Rubber Reserve and Republic of Colombia.

Colombian Government has received an offer from an Argentine for 50 tons of Castilloa rubber, ex-Buenaventura at 50 cents per pound to be returned equal tonnage manufactured tires. In accordance with previous oral agreement with me Colombian Government will not make any deal on this matter pending outcome of our negotiations but he admitted difficulty of explaining satisfactorily to Congress his concluding agreement with us at a price lower than Argentine offer.
As to paragraph 3 of draft agreement it is proposed that amount of rubber for domestic use or consumption be fixed at minimum 1,000 tons a year 60 percent reserved for tires. Amount of crude rubber corresponding to this reserve of 60 percent would be released for export to the United States from Colombia’s maximum internal requirements in the event that we would furnish them this tonnage in tires. Colombian Government will not require construction of a tire plant for one year or one year and a half provided that it can obtain tires from Venezuela or Argentina in the meantime. It requires 20,000 tires at once and 30,000 more within a year. Can we guarantee that amount to Colombia?
As to the last sentence of paragraph 4 of draft agreement which the Department instructed to delete Minister of National Economy would prefer that minimum prices should be studied and adjusted after 2 years from the date of agreement.
Colombian Government hopes that development fund may be increased from 500,000 to 750,000 dollars so as to provide for construction of roads and acquisition of launches in connection with rubber production in Colombia.
Although Minister stated that Minister of Foreign Affairs is sending me memorandum in reply to draft agreement it is agreed that we shall continue negotiations orally with Arango so as to save time. Arango said that he will be leaving office shortly and would like to conclude negotiations and sign agreement within a week. He concluded interview with assurance that if we would guarantee supply of tires required pending construction of a tire plant, contract could be signed at once.
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Urgent telegraphic reply on foregoing would therefore be deeply appreciated.

  1. Latter not printed.