398.2544/10–2253
The Assistant Secretary of the Interior for Mineral Resources (Wormser) to the Acting Assistant Secretary of State for Economic Affairs (Kalijarvi)
Dear Mr. Kalijarvi: I am delighted that I had an opportunity to discuss international commodity agreements with you today, and I [Page 1030] am pleased to learn that State Department’s position is that“…1 the basic attitude of our Government towards any proposals of this character should be a presumption against entering such agreements”, as expressed in the letter of October 5 from Secretary Dulles to Secretary Humphrey.2
Specifically replying to your letter of October 16:3 No one recognizes more than I do the seriousness of the recurring market crises in commodities that enter into international trade. Nearly all of those commodities are afflicted with violent price fluctuations, but I am sure the record bears me out that the fluctuations in lead, zinc and copper are in some cases more violent than the fluctuations in tin, or of approximately the same order. Please note the following table:
Selected Extreme Domestic Prices—1946–1953
(Cents per pound)
| Commodity | Low | High |
| Tin | 52.00 | 184.00 |
| Lead | 6.50 | 21.50 |
| Zinc | 8.25 | *19.50 |
| Copper | 12.00 | 32.25 |
* Ceiling price. Outside price much higher.
Therefore, if the Administration is to encourage the consummation of an international tin agreement to bring about stabilization of the tin market, it will place this Department in the position of having to treat with favor similar agreements for copper, lead, zinc, aluminum, tungsten, antimony, manganese, chrome, and other metals. Some of these products are in just as desperate a plight as tin.
Frankly, I am dubious about any international commodity agreement achieving stabilization, except at frightful cost to our economic liberties. I think a free competitive market will do a quicker and better job. Moreover, I think the history of such agreements is that [Page 1031] they generally collapse by the objection of one or more producing agencies which believe they can do better on the outside.
An important principle is at stake, namely: Shall we abandon our position of fostering open competitive markets in the sphere of foreign trade, while insisting upon it domestically, or shall we hope that, through the example we have set for the world of what an open competitive system can accomplish for a people, the rest of the world will slowly, but surely, imitate our example, just as Germany has begun to do?
I recognize that this entire subject is too broad for me to cover every aspect in this short letter to you. For example, we might discuss the cause of these violent fluctuations. In my humble estimation, it is largely war, or preparation for war. I merely want to indicate, first my misgivings about the international commodity agreement concept. If we are consistent in our desire to reduce or eliminate trade barriers, I don’t see how the Government can advocate one of the most serious barriers of all, namely, an international commodity agreement. Secondly, there is the embarrassment it would cause the Department of the Interior if one were to be perfected in tin. Incidentally, I believe I can detect very little, if any, sentiment among the tin-using trade of the United States for an international tin commodity agreement.
I can well appreciate the anxiety of your Department, and my own, about the political situation in Asia, and elsewhere, as intensified by the distressed prices of various commodities they produce. We have a similar problem here, but I think the sacrifice of a fundamental American economic freedom, which most Americans cherish, is too great a price to pay on the assumption that it will create political stability.
This Department is prepared at all times to do everything it can to help you solve some of the difficult problems which face you from day to day, as they relate to our sphere of operations.
Sincerely yours,
- Ellipsis in the source text.↩
- Ante, p. 1016.↩
- Not printed; in response to an earlier letter from Assistant Secretary Wormser concerning U.S. participation in an international sulphur meeting in Paris, Acting Assistant Secretary Kalijarvi replied by transmitting copies of letters dated Oct. 5 and 10, 1953, from Secretary Dulles to Secretary Humphrey. For the letter of Oct. 5, concerning tin, see ibid.; the letter of Oct. 10 presumably is the one regarding the rubber study group referred to in footnote 3, p. 1018. According to Kalijarvi, the letters expressed the Department of State’s views on participation in such meetings. (398.2562/10–253)↩