Foreign Relations of the United States, 1946, The Far East, Volume VIII

892.61317/1–946: Telegram

The Acting Secretary of State to the Chargé in Siam (Yost)

secret

Washington, January 22, 1946—8 p.m.

40. 1. Following oral conversations in Washington with Sanderson, top rice [man] MoF, complete informal agreement reached on terms proposed Tripartite Agreement and Tripartite Memorandum of Understanding regarding principles and procedures operation Rice Commission. Dept forwarding copies by pouch Jan 24⁸ Invoice A–3 Registry 5450 and Brit Embassy forwarding copies to Bird.⁹ Formal US and Brit approval expected before Feb 1. Negotiations with Siamese Govt should wait official approval (urtel 25, Pan 9¹⁰).

2. Major changes Oct 16 draft of Agreement include:

A. Article II para 1 limited to rice, metallic tin, and rubber, as teak not subject Combined Board nor tin concentrates since Jan 1.

B. Para 2 UK–US support Siamese membership Rice Committee but omit reference tin and rubber committees because of new terms reference those committees and exclusion certain other countries.

C. Article III para 3 details except a, b, and d transferred to Memorandum. Paras 3a and b expanded as to detail and provide Siamese Govt agreement with Commission on amount rice surplus.¹¹

D. Para 5^11a omits all reference control prices other Asiatic areas and balance of para.

3. US–UK agree that prices should be sufficiently high from outset to encourage flow of surplus rice for export and also encourage economic expansion rice production. Although no restriction future change in prices, it was felt to prevent hoarding or speculation original prices determined should if possible be adhered to through life of agreement. Brit suggested advance understanding between US and UK that price for low milled standard sample with approximately 30 percent broken rice should not exceed 15 pounds sterling. Although Dept understands this limit nearly twice present Siamese price, US unwilling agree any limit pending price study and recommendation by Legation and Willich.¹² Dept inclined belief (urtel 25, Jan 9) present Siamese controlled prices too low to stimulate production or eliminate hoarding when rice exported large scale. Dept believes maximum efficient export Siamese rice can be attained only through obtaining voluntary willing cooperation Siamese Govt and people. One factor would be reasonably generous prices which also desirable in view required free rice. Please have Legation and Willich make careful study and give Dept detailed views as to prices.

4. Brit Rice Unit will make available all bags needed export Siamese rice up to 16,500,000 bags, other buyers to reimburse Unit cost of bags they use including transportation and overheads. Dept has requested Brit Embassy arrange sale to Willich of bags needed for USCC contract.

5. Please give or receive from Bird draft texts as impossible determine whose will first arrive.

6. Instructions will follow immediately upon official US and UK approval.¹³

Acheson

8. These documents were sent to Bangkok in instruction 4, January 22, 1946.
9. Hugh R. Bird, British Charge in Siam.
10. Not printed; it stated: “We believe Rice Commission should be established without delay and recommend that we and British representatives here be instructed jointly to propose to Siamese Government immediate organization of Commission. Its establishment need not await final settlement of all details of its structure and functions.” (892.61317/1–946)
11. Article III of the draft agreement of October 16, 1945, dealt with the establishment of a Combined Siamese Rice Commission, its functions and methods of operation and the role to be played by the Siamese Government. Under the terms of sub-paragraphs a, b, and d, respectively, the Siamese Government agreed: “to require returns from all holders of stock and paddy”; “to assess, in agreement with the Rice Commission, the quantity of rice surplus to the internal needs of Siam”; and “not to impose or permit the imposition of export or other duties on rice and paddy other or higher than those in effect on December 7, 1941, except as may be determined by agreement between the Government of Siam and the Rice Commission.”
12. This paragraph stated that in determining the prices of Siamese rice exports, “due regard shall be given to the controlled prices of export rice produced in other Asiatic rice producing areas.”
12. Theodore R. C. Willich, representative of the Commodity Credit Corporation in Siam.
13. In a memorandum of January 26, Mr. Moffat stated that he telephoned to Mr. Everson on the date the United States Government’s approval of the texts of the draft agreement, the Memorandum of Understanding, and the proposed exchange of letters (892.01317/1–2646). British approval was not forthcoming, and on February 6 and April 8 (telegrams 1252 and 3044, respectively) the Department directed the Embassy in London to prod the British Foreign Office on the matter (892.61317/2–046, 4–846).