493.46E9/9–2051
The Ministry of External Affairs of Ceylon to the Embassy in Ceylon 1
Aide-Mémoire
The Government of Ceylon deeply appreciates the spirit of friendship in which the concern of the United States over the export of rubber from Ceylon to Communist China has been expressed, and, although Ceylon’s position has been previously explained, further clarification appears to be necessary in view of the consideration urged in the “Note” handed by the United States Ambassador on 17.9.51.2
2. Ceylon’s decision not to apply the strategic embargo of the United Nations in respect of her own exports of rubber is not due to any lack of appreciation on her part of the significance and purpose of the United Nations resolution or of the need for its application by members as well as non-member states of the United Nations. It is not due to any lack of appreciation of the intensity of the present struggle of the United Nations against aggression. Ceylon’s unstinted support of United Nations ideals and purposes, despite her exclusion from membership, and her ardent desire to oppose Communism in all its forms have been made amply clear to the world not only through the part she played at the Japanese Peace Treaty Conference but also on every conceivable occasion on which it became relevant to declare Ceylon’s alignment on this issue. If the American Embassy in Ceylon had kept in touch with the Parliamentary proceedings and press reports of the public speeches of the members of the present Government, it would have been patently clear to them that we were not out to make any compromise with Communism within or without Ceylon. That there should be any room for doubt on this score, or any suggestion that Ceylon is not fully alive to her own stake in the joint efforts of the democratic world in combating Communist aggression, is a matter of great regret to the Government of Ceylon.
3. The question, therefore, of the control of destination of the export of rubber should be discussed in the light, partly of the economic, political and social stability of the producing countries and partly of an issue between producers and consumers. It is unreasonable to expect blind subservience to the United Nations resolution, which is believed to result, sooner or later, in unfair advantage to certain [Page 2059] industrialists in consuming countries. It is unnecessary to recount here fully Ceylon’s readiness and willingness to stabilise the price of natural rubber at a fair level to both producers and consumers, which has been expressed on more than one occasion in the past. It should suffice to refer only to the recent approach by the Government of the United States for an arrangement for the purchase of Ceylon rubber in bulk. Although the Ceylon Government has welcomed this approach, as it did previous proposals of a similar nature, the United States Government has not seen fit to pursue it further. While not desiring to indulge in recriminations, it is necessary, however, to point out that had the United States Government assisted Ceylon in stabilising her market in rubber, by some mutually acceptable arrangement for purchase, the Ceylon Government would have been spared the unpleasantness of seeking to do this herself, even at the expense of declining to impose a destinational ban on her exports.
4. There is a statement in the Embassy “Note”, which appears to interpret Ceylon’s attitude as being based on a desire to obtain “the higher price available outside of the free world”. It can only be assumed that this is a misunderstanding, for it was clearly stated in this Ministry’s Aide-Mémoire of 10th September that “the Ceylon Government is perfectly content with (the existing) state of affairs and has no need or desire to seek new markets in Communist countries”. The only desire of the Ceylon Government is that the stability of the rubber market, which is vitally important to the economy of the Island, should not be disturbed. There appears to be a feeling among consumer countries that the prevailing price of rubber is exorbitantly high and that Ceylon, among other producers, is unreasonable in demanding the continuance of prevailing high prices. That present prices of rubber are high there is no doubt, but it does not always seem to be equally admitted that the differential increase in the price of rubber above prewar prices is far less than the corresponding increase in the prices of our essential foodstuffs and other consumer commodities. It will be recalled how in World War II, when Ceylon was the sole supplier of rubber to the United States, and was, therefore, in a position to dictate any price she pleased, she did not succumb to the temptation of the price-factor in that emergency. Even though her rubber industry was allowed to languish after the war, we are not short-sighted enough to think that there is material advantage in “the higher price available outside the free world” for small quantities which tramp ships may carry.
5. Contrary to the impression created by the “Note”, Ceylon’s decision against the application of the embargo in respect of rubber has been taken after most careful consideration of all the factors involved, and represents a sincere conviction that the imposition of such an embargo will be gravely detrimental to the well-being of the Island [Page 2060] and will inevitably create political reactions which can only be favourable to the Communist cause. That other countries which are natural rubber suppliers have found it possible to apply the embargo, despite the admitted economic disadvantages, is an argument that Ceylon cannot accept; for these countries are already in a state of political instability and any political repercussions arising from such action cannot appreciably affect their situations one way or the other. Ceylon, on the other hand, has been singularly fortunate in keeping an effective check on the Communist ambitions, and the Government emphatically cannot contemplate any step, such as the imposition of a strategic embargo, in the face of positive knowledge that, such a step will give the local Communists a real advantage.
6. Having explained again at length the reasons which have made it necessary for Ceylon to take up her present attitude, I can only add that the people of Ceylon, no less than the Government, continue to cherish the friendliest feelings towards the United States and her people in our common cause against Communism and in the furtherance of our common ideals. Should the people of the United States find it impossible to continue to render assistance to the people of Ceylon in securing supplies of much needed commodities, of which sulphur is but an example; and should the Government of the United States find it necessary to deny to the people of Ceylon the benefits that flow from a generous programme of economic assistance initiated by the Government of the United States; the people of Ceylon can do no more than express their deep regret and disappointment that their own efforts toward self-preservation should bring about such a state of affairs. We trust, however, that it will be appreciated that what the people of Ceylon desire is the same objective against Communist aggression as is being pursued by the United States of America, but to our minds it can only be achieved on the basis of a far-sighted policy of genuine united action.
- Sent to the Department of State as enclosure 2 to despatch 268 from Colombo, September 20, not printed. This aide-mémoire was handed to the Counselor of Embassy, Gufler, by Sir Kanthiah Vaithianathan on the afternoon of September 18. The text of the aide-mémoire was also transmitted in telegram 175 from Colombo, September 19, not printed (493.46E9/9–1951).↩
- Reference is to the paper from which Ambassador Satterthwaite made his representations on September 17 (p. 2053), a copy of which he left with the Prime Minister.↩