493.46E9/9–1051: Telegram

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


155. Embtel 152 Sept 10.1 Arrival Mickiewicz climaxes persistent efforts over many months by Ceylon shippers and China buyers arrange shipment Ceylon rubber to China.

Fol summary may assist Dept in determining attitude.

1. Altho actual contracts with Chi held by half dozen Indian and Ceylonese exporters at prices ranging from Rps .25 to one per lb above prevailing world prices, practically all Ceylon traders including European sold own stocks FOB Mickiewicz to these exporters at prices rupees .08–.10 per lb above market. Ceylon producers have benefited little if at all as rubber purchased locally at prices generally approx Singapore levels.

2. Emb estimates GOC may well obtain on taxes alone (excluding rubber export tax) from profits this single shipment amt substantially in excess total US fin aid contemplated for Ceylon under MSP FY 52.

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3. In spite above Emb considers GOC refusal embargo shipments based neither on this nor on expectation extracting better offers from US but results principally from emotional approach of PriMin combined with ultra-sensitive nationalism and unrealistic conception possible detrimental effect embargo on local rubber market with consequent repercussions on internal polit situation. Resentment over what generally considered US efforts depress rubber prices also factor.

Emb convinced PriMin personally wld have preferred Chi sales had not been made and sincere in belief that shipping and fin facilities wld not be available in spite repeated Emb warnings to contrary. Emb disturbed, however, that there has been no indication that any important GOC official has ever endeavored deter shippers by pointing out moral issues involved or counselling against shipments.

4. GOC position appears be accepted by Ceylon public either with approval or apathetically. Emb knows no single English or vernacular newspaper which has protested against shipments to Chi; on contrary possibility of controls widely condemned.

Dept pass London; sent Dept 155, rptd info London 52.

  1. Telegram 152 from Colombo, September 10, not printed, reported in part that the Mickiewicz had arrived in Colombo on September 9 and would remain approximately 10 days to load a full cargo of approximately 5,800 tons of rubber (493.46E9/9–1051).