810.6176/265: Telegram

The Secretary of State to the Minister in Nicaragua ( Stewart )

193. Your 174 of April 23. On May 2, 1942 agreements were signed by Rubber Reserve Company and Bank of Nicaragua, subject to ratification by Directors of Bank of Nicaragua, whereby Bank of Nicaragua agreed to cause entire Nicaraguan production to be sold to Rubber Reserve, other than amount required for local consumption. This amount was fixed at 50 tons subject to adjustment if essential needs are found to be in excess of 50 tons. The price to be paid is 330 per pound f.o.b. Nicaraguan ocean ports for usual good quality Nicaraguan scrap of the castilloa type with appropriate differentials for other types and grades. In addition, premium payments of 2½¢ per pound for rubber purchased between 200 tons and 700 tons and of 5¢ per pound for rubber purchased over 700 tons during any one year are to be paid to the Bank and made available to the Government for financing immediate expansion of production and improvement of quality of wild rubber in Nicaragua.

Under the agreements, the Bank agrees to cause itself to be established as agency to acquire and sell crude rubber produced in Nicaragua, except that Rubber Reserve may buy rubber for its own account if such purchases do not interfere with the Bank’s operations.

The Bank agrees to establish the base price to Rubber Reserve as the price of rubber for domestic consumption or use.

The Bank agreed to restrict to the United States the export of crude rubber from Nicaragua.

Copies of the documents3 are being forwarded by airmail.

The question of handling stocks on hand is being considered here, and it is expected that plans will shortly be completed.

Hull
  1. Not printed.