811.20 Defense(M)Peru/63a: Telegram
The Acting Secretary of State to the Ambassador in Peru (Norweb)
227. Rubber Reserve Company is prepared to enter into commitment with Peruvian Government to purchase entire production of rubber in Peru except for an appropriate amount (to be agreed upon) necessary for domestic consumption, at 30¼ cents United States currency per pound, f. o. b. ocean carrying vessel at Belem, Brazil, for hard cut fine classified rubber with appropriate differentials for other grades. Purchases would be paid for on basis of cash against shipping documents endorsed “on board” ocean carrying vessel at Belem and such other places as may be deemed advisable by Rubber Reserve and Peru and subject to final price adjustment based on quality inspection and net certified weights determined at port of entry in United States. The term of the agreement shall be to December 31, 1946, unless sooner terminated by mutual consent, price paid being subject to change after expiration of first 2 years if conditions change. The Government of Peru would agree to restrict export licenses to Rubber Reserve Company or its nominees and to restrict expansion of rubber manufacturing facilities and to curtail rubber manufacturing as much as possible. The exportation of manufactured rubber, if any, would be restricted to the United States. Peru would agree to use its best efforts to cause maximum amount of rubber to be produced and made available for sale to Reserve. Local labor would be financed locally for necessities for collecting rubber. Some governmental agency, if desirable, would [Page 666] be designated as the single buying agency, otherwise sales would be made through usual trade channels now in existence. Price on sales to Rubber Reserve would also be fixed as local sales price.
Foregoing proposal corresponds generally to agreements entered into with Brazilian Government on March 3.2
For your information we understand certain American republics are negotiating to acquire rubber production in some Latin American countries. Please consult immediately proper Peruvian authorities and request their immediate consideration of proposal. If Peruvian authorities agreeable in principle to sale of rubber to United States, Rubber Reserve willing to enter into an agreement immediately to acquire it; upon consummation of purchasing agreement, we are prepared to discuss with Peruvian authorities any useful joint arrangements to increase rubber production.