846E.2395/7–3151: Telegram

The Ambassador in Ceylon (Satterthwaite) to the Secretary of State


60. Today’s Ceylon Daily News carried two articles, first under New York dateline July 29 headlined “Bulk Buying Ceylon Rubber Planned—American Expert Coming Over for Discussions” which stated in part: negots now taking place between US Govt and GOC for US rubber expert come to Ceylon to discuss question bulk buying Ceylon rubber. Proposal to send US expert related to GOC decision not to embargo rubber to Commie China and to possibility international materials conf taking up rubber question shortly. It is expected Ceylon rubber interests will insist on bulk buying for reasonable period and at reasonable price and although US interests may feel three year contract wld suffice, such might be rejected in Ceylon which may desire minimum five years. It has been realized in US it is useless request producing countries not ship to Commie Countries if no alternative afforded for such countries to dispose their products in non-Commie areas at equally attractive prices.

Second headlined “Ceylon Will Sell Rubber at own Prices—US Overtures Raise Hopes”. This article which refers to first, states in part minimum price four and maximum six shillings per pound likely to be demanded by Ceylon from US Govt which reported contemplating bulk purchasing Ceylon rubber. This price demanded by Ceylon at London and Rome rubber conferences. Fact that US, knowing Ceylon’s views, is again negotiating construed in local circles as likely indication US prepared concede price demand. If terms accepted producers will be assured minimum rupees 2.60 over period years.

Dept pass London; sent Dept 60, rptd info London 12.