Foreign Relations of the United States, 1952–1954, General: Economic and Political Matters, Volume I, Part 2

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

Paper Prepared by the Planning Board of the National Security Council¹

secret
NSC 5417/2

[Washington, July 9, 1954.]

Draft Statement of Policy Proposed by the National Security Council on U.S. Rubber Policy

1. The following possible courses of action listed in par. 3 of NSC 5417/1² are not feasible at this time:

Course A—“Bartering agricultural surpluses for rubber.”

Course B—“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.”

Course E—“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.”

2. The following courses of action along the lines of those listed in par. 3 of NSC 5417/1 are approved in principle as offering a limited contribution toward the solution of the rubber problem in Southeast Asia (particularly Indonesia), subject to the development by the Operations Coordinating Board of a feasible, integrated program and report to the Council with estimates of the general magnitude of the cost.

Course C—Extending grants of surplus agricultural commodities, the proceeds from the sale thereof to be used to improve the production and marketing of natural rubber.

Course D—Extending grant assistance or long-term loans, where feasible in association with other countries, to improve the production and marketing of natural rubber.

3. The United States should consider how, as proposed in par. 31 of NSC 5422,³ Asian regional economic cooperation may contribute to the solution of the rubber problem.

1. In addition to the statement of policy printed here, NSC 5417/2 consists of a cover sheet, a memorandum by Lay to the NSC noting that the preparation of the statement was carried out pursuant to the NSC directive issued at its Apr. 29 meeting (see p. 1153), a table of contents, and a report by the Special Rubber Committee constituted by the NSC Planning Board to study the alternatives presented in this paper. The report consists of a summary of the Committee’s activities; papers presented for the Committee’s consideration on alternatives A through E by the Department of Commerce, the Office of Defense Mobilization, the Foreign Operations Administration, the FOA and the Department of the Treasury jointly, and the Department of Commerce and Reconstruction Finance Corporation jointly, respectively; a press release on the International Rubber Group; and five papers, not discussed by the Committee but submitted for information purposes, by various executive agencies. Originally intended for submission to the NSC on July 1, 1954, the statement of policy was revised from an earlier version, dated June 18, to the version printed here by the NSC Planning Board on July 9. For the action of the NSC on the statement of policy, see the memorandum of discussion at the meeting of July 15, infra.
2. Dated Apr. 30, p. 1157.
3. For documentation concerning NSC 5422, see volume xii, Part 1.