Memorandum by Peter H. Delaney of the Office of South Asian Affairs to the Director of That Office (Kennedy)



  • Relationship of Rubber Agreement with Ceylon to Control of Rubber Shipments by Ceylon

Yesterday I stated that it was my understanding that, while the Department had made it clear to our Embassy in Colombo and to the Ceylonese Embassy here that the conclusion of a rubber contract and any action by Ceylon with respect to the control of rubber shipments were unrelated, in fact the US Government did not plan to conclude a rubber contract without having assurances from Ceylon with respect to the control of rubber shipments. The background of my statement was as follows:

In earlier conversations between Mr. Fluker and Ambassador Corea, it was made clear that, although in no sense would we permit a rubber agreement to be treated as “buying off” Ceylon, at the same time we would expect a friendly and cooperative attitude from Ceylon with respect to rubber movements in general. Mr. Corea is said to have the implications of this approach well in mind.
In the Department’s outgoing cable to Colombo, No. 202 of November 17,1 it was stated that the Department had explained its position on a rubber contract to Ambassador Corea and made clear China shipment could not be linked with a rubber agreement. The Embassy replied in its cable 347 of November 28,2 that it agreed with the Department’s view that a rubber agreement should not be linked with China shipments but that, presumably, the US would not consider a rubber agreement unless assurances had been given that no further shipments to China would be made.
We are, of course, perfectly free to modify what Corea and the Embassy understand to be our position—a position which may have been based on a misunderstanding of your desires on this matter. I merely want to apprise you of the background of this matter as I understood it.
You will undoubtedly have received from Mr. Moline the latest information on Mr. Harriman’s thinking on this problem. It occurs to me, however, that the probable publicity which the conclusion of a rubber contract would entail, in Ceylon, in this country and in [Page 1503] other countries affected by the Battle Act,3 might place the Department in an embarrassing position unless we were able to follow such publicity with a rather firm statement that Ceylon is willing to assume the obligation of controlling exports of rubber to China.

  1. See footnote 2, Foreign Relations, 1951, vol. vi, Part 2, p. 2078. With reference to the Department’s position on linking a rubber contract to Ceylonese shipments to China, telegram 202 stated: “Govt has no pre-emptive purchasing policy, no long term protection producers any raw material.”
  2. See footnote 8, p. 1500.
  3. The Mutual Defense Assistance Control Act (H.R. 4550), sponsored by Laurie C. Battle of Alabama, provided for the suspension of economic aid to nations supplying strategic materials to Soviet bloc nations. Superseding the Kem Amendment, which had a similar provision, the Battle Act was passed by the House and Senate in August and approved by the President on Oct. 26. (P.L. 213, 65 Stat. 644). Title II of the act specifically enumerated the strategic commodities which were to be denied to Communist countries.