835.6176/3–1646: Telegram

The Secretary of State to the Chargé in Brazil ( Daniels )8

confidential

383. For ur info natural rubber situation and US policies re international distribution natural rubber during transition period are as follows. 1, Contd international allocation by Combined Rubber Committee with US participating. 2, allocation by CRC to all mfg countries to be equitable in quantity and price. 3, contd public purchase by US. 4, US continue temporarily as purchaser in Far East for itself and for all other American republics. 5, continuation of US as source of all natural rubber for all other importing American republics. 6, resale price by US beginning with second quarter allocations to be non-profit and based on cost in Far East plus incidental charges. 7, US to continue purchases under existing American republic agreements. If requested, US will amend agreements to permit reduced internal prices in producing countries. US does not expect to extend agreements in other American republics or make new agreements. 8, contd US limitation of imports of manufactured rubber products to those which conform with CPA order R–1. This order limits natural rubber content of products made in US. 9, US willing to terminate or continue Tripartite Agreement. As long as agreement in effect, Brazil, Argentina, and US obligated to consult and agree upon Argentine receipts, but approval of CRC allocation expected be perfunctory as long as Argentina fulfills commitments and responsibilities.

[Page 119]

Early in first quarter 1946 CRC allocated to Argentina 578 long tons natural rubber from US and 150 tons butyl from Canada for same quarter, subject to Brazilian concurrence under Tripartite Agreement.

Emb instructed seek concurrence of Brazil to joint Brazil-US proposal to Argentina that if it will take effective measures at once to make wheat available for export to meet its commitments and to fulfill needs of countries whose supply it regards as its primary responsibility as represented in Combined Food Board Cereals Committee, US and Brazil will (1) agree to shipment of first quarter allocation mentioned previously, and (2) introduce and support in the Combined Rubber Committee an allocation of 1,250 tons natural rubber for second quarter. This would permit Argentina to manufacture rubber products in second quarter at pre-war rate with the 50 percent natural rubber content, the same as for all other countries except US and Canada which have limited themselves to 35 percent.

Urgent action and reply requested because quarter almost ended and Dept under considerable pressure and criticism. Emb at Rio requested to consult Brazilian Govt on any matters in this telegram which, in Emb’s judgment, require such a course under the Tripartite Agreement.

Byrnes
  1. Sent to the Embassy in Buenos Aires for information only.