S/SNSC files, lot 63 D 351, NSC 5417 Series

Interim Statement of Policy by the National Security Council1

NSC 5417/1

U.S. Rubber Policy

At the forthcoming meeting of the International Rubber Study Group in Ceylon, the United States will be called upon to state whether it is willing to assist natural rubber-producing countries to alleviate their economic difficulties connected with present rubber prices. It is in U.S. security interests under existing policy (see Annex A) to agree to consider such assistance in some feasible form.
At the Ceylon meeting, the United States should:
Indicate its willingness sympathetically to consider, in cooperation with other interested countries, the possibility of assisting natural rubber-producing countries to improve the efficiency of the natural rubber industry, without making a precise commitment as to the extent or means of such assistance.*
Decline to participate in an international agreement for a rubber buffer stock to control the price of natural rubber.
Refuse to agree to free rubber at this time from the embargo on trade with Communist China.
The following possible U.S. courses of action should be the subjects of further exploration within this government:
Bartering agricultural surpluses for rubber.
Direct purchase of rubber, possibly as a result of an increased stockpile objective based upon a revision of the current ratio of natural to synthetic rubber contemplated for wartime use.
Extending grants of agricultural surpluses so that the recipient government could use the proceeds from the sale thereof to improve the natural rubber industry.
Participating with the UK and others in long-term loans or grant assistance to improve the natural rubber industry.
Persuading U.S. rubber companies to increase the percentage of natural rubber currently used in making tires, in order to increase the demand for natural rubber.
  1. In addition to the interim statement of policy printed here, NSC 5417/1 includes a cover sheet, a note by Lay informing the NSC that the NSC Planning Board would undertake further exploration of the courses of action outlined in paragraph 3, and an annex which presented extracts from related NSC statements of policy. In this last respect, NSC 5405, “United States Objectives and Courses of Action With Respect to Southeast Asia,” dated Jan. 16, 1954 (printed in volume xii, Part 1), and NSC 171/1, “United States Objectives and Courses of Action With Respect to Indonesia,” Nov. 20, 1953 (ibid., Part 2), were excerpted. The text of NSC 5417/1, as determined by the NSC at its meeting of Apr. 29, 1954, was transmitted in paraphrase form in telegram 323 to Colombo for Willis C. Armstrong, Apr. 30, for use as his instructions at the International Rubber Study Group meeting. (398.2395/4–3054)
  2. Technical assistance for this purpose could be included in FOA programs for Indonesia and Thailand. Other possible types of assistance for this purpose would require further study as proposed in par. 3–c and d below. [Footnote in the source text.]