811.20 Defense (M)/6465

The Vice Consul at San Salvador (Ellis) to the Secretary of State

No. 2368

Sir: I have the honor to refer to the Department’s telegram No. 59 of March 19, 1942 (2 p.m.) transmitting the proposal of the Rubber Reserve Company to purchase the entire rubber production of El Salvador and to this Legation’s despatch No. 2286 of April 9, 1942, transmitting the preliminary reply and report of the Salvadoran Committee of Economic Coordination.2

This Legation has now received a note from the Salvadoran Ministry of Foreign Affairs transcribing a communication from the Ministry of Finance and Commerce, which reads, in translation, as follows:

“I refer to your note No. A–631–I–1002, dated March 26th, transcribing a communication from the Minister of the United States of America, stating that his Government was ready to make arrangements with our Government for the exclusive purchase of the total rubber production of this country, excepting the amount needed for domestic consumption, at the rate of $0.35 per pound, c & f, United States continental ports; this agreement would be for a term of five years and export licenses would be extended to the above mentioned Company only. In reply I beg to state that, according to statistics prepared by the General Customs Bureau (Dirección General de la Renta de Aduanas) on the exportation of Salvadorean rubber during the years 1930 to 1939, our rubber production is very meager and it is [Page 430] scarcely sufficient for the national industry which manufactures soles and heels, raincoats and dresses. Nevertheless, should there be a surplus in the national rubber production, our Government would accept the offer of the Rubber Reserve Company, provided that the minimum price be $0.35 per pound and that the maximum price to be quoted from prices of the New York Exchange on the day or date of each contract. As the note under reference suggests that a Governmental bureau would be established to purchase all the rubber produced in the country and export it to the Rubber Reserve Company, it is thought convenient that the Mortgage Bank of El Salvador could be nominated for this purpose, as it is in contact with different agricultural and industrial circles of the country.”

Although the Ministry of Finance and Commerce signifies its willingness to meet the offer of the Rubber Reserve Company for all rubber produced in this country over and above its domestic needs, production at present is so disorganized and sporadic that considerable organization of rubber gathering, cleaning and picking is necessary before any actual shipments can be offered.

The Committee of Economic Coordination is at present working on this problem and as soon as more concrete offers can be made the Department will be notified without delay.

Respectfully yours,

Overton G. Ellis, Jr.
  1. Despatch No. 2286 not printed; in summarizing the preliminary reply and report of the Committee, it indicated that at present annual rubber production would not exceed 30 tons and cited a survey indicating that soil and climatic conditions were not favorable for extensive production.