493.46E9/9–2151: Telegram
The Acting Secretary of State to the Embassy in Ceylon 1
114. Amb Corea called at Dept request discuss rubber as noted Deptel 104, Sept 13. Dept reiterated reasons U.S. Govt concerned rubber shipment Commie Chi indicating realization GOC completely sympathetic UN aims as shown recent San Francisco conference and finding it difficult understand GOC non-cooperation UN embargo.
[Page 2064]Amb Corea repeated arguments already used by GOC and in addition stated Ceylon producers fearful rubber future based on experience World War 2.
Following points discussed:
1. Amb stated freedom of trade necessary Ceylon’s economic future. Any official act GOC restraint of trade help Communists against present govt.
Dept emphasized GOC consider importance Ceylon’s freedom doing all possible combat Communism Asia and helping UN resist aggression.
2. Dept pointed necessity holding release export licenses 200 tons sulphur pending outcome shipment rubber Commie Chi. Rubber shipment automatically prevent export sulphur Ceylon.
Amb believed this action regrettable at this time and would have wrong effect Ceylon people who would interpret as U.S. economic embargo.
Dept assured action not embargo but automatic reaction rubber shipment. Dept was fol with great interest allocation newsprint Ceylon and as far as sulphur were concerned Dept instrumental Ceylon annual requirement available third quarter allocations. Amount sulphur small in any case and GOC might obtain other sources.
Amb emphasized quantity sulphur not small and most important Ceylon. Impossible obtain outside U.S.
3. Dept explained operation Kem Amendment and Battle bill indicating latter may be passed early Oct would probably include rubber as critical material. Law requires shipment such material Commie nations automatically result cessation all economic assistance shipping country including grant aid, technical assistance, bank loans, possibly Fulbright funds.
Amb understood Battle bill gives wide discretionary powers President and opined U.S. take into account internal political situation each country concerned in arriving final decision. If principle accepted refuse economic aid those countries shipping important material Commie nations why discriminate against Ceylon and permit United Kingdom ship machine tools USSR. Amb again emphasized importance shipment sulphur Ceylon expressing hope export permitted regardless requirements Kem Amendment and Battle bill.
Dept corrected Amb misconception noting sulphur export has no connection Kem Amendment or Battle bill. These bills deal only with economic assistance and do not necessarily affect export licenses.
4. Amb asked if assuming Mickiewicz rubber shipment cessation economic assistance would also apply food grain request to be officially submitted.
Dept stated when request received would consider as economic aid and may be required reject by law.
Amb thanked Dept explanations indicating he would raise points covered with GOC. He repeated hope sulphur be allowed move Ceylon which could serve for renewal conversations find politically acceptable method prevent movement rubber Commie nations.
[Page 2065]Atmosphere discussion cordial and frank. Dept believes Amb Corea sincere wishes prevent shipment rubber. Dept received impression Amb believed Mickiewicz shipment rubber might still not move. Amb indicated he cabled GOC urging stopping by technicality.
Dept hopes GOC may find way stop rubber. Commerce cooperating maximum possible delay sulphur action in view this hope. If rubber stopped after final sulphur action this quarter, fourth quarter sulphur will present normal difficulties.
- Repeated to London as 1616 and to Djakarta as 366.↩