493.46E9/9–1751: Telegram
The Acting Secretary of State to the Embassy in Ceylon
priority
105. Jayewardene, Corea, Senanayake, Coomaraswamy, visited Dept late Sept 13, fol luncheon honor Jayewardene by McGhee Sept 12. In course pleasant conversation opportunity taken point out grave US view of proposed rubber shipments and the moral and material aspects of the problem along lines you covered previously with GOC. Jayewardene and Senanayake seemed genuinely impressed with gravity of situation after raising points: (1) Ceylon economy requires free market price rubber and (2) only UNP opposition is Marxist group which wld make telling political capital of GOC refusal ship Commie Chi; latter pt serious in view oncoming elections. FYI in later informal conversation Sept 15 Coomaraswamy confided that they had discussed matter and Jayewardene convinced must present in strongest terms to PriMin case against shipments Commie Chi; Coomaraswamy reported Jayewardene said he wld upon return Colombo emphasize necessity stopping shipments by technicalities rather than by embargo.
Jayewardene noted need US assistance re: (1) finance for development program (Jayewardene did not present formal note last para Embtel 144 Sept 5, but Coomaraswamy did supply brief papers on Walawe and rural projects. Dept followed Emb suggestions last para Embtel 134, Aug 31.1), (2) newsprint for Ceylon in light of coming elections and (3) priority on equipment, etc., needed in development Walawe and other projects.
Dept investigating pt (2); re pt (3) suggested company now in Ceylon might be of aid if the contract were concluded and requirements defined. In general delivery time up to 2 years hence on much scarce equipment.
Jayewardene will see newsreels his participation San Francisco conf. Group reported going Ottawa and London on return Ceylon by Oct 6.
Para 2 Embtel 166 Sept 14, decision not yet reached re participation exhibition but Dept believed no advantage in deferring decision.
Kerrigan expected arrive Colombo momentarily. Decision proceed negots Megawatt station may be reviewed by Emb with Kerrigan in light atmosphere prevailing during his visit.