846E.2395/4–1052: Telegram

The Ambassador in Ceylon (Satterthwaite) to the Department of State


574. Discussed rubber negotiations with new PriMin Dudley Senanayake today in course farewell visit. Gufler and Vaithianathan also present. Latter MEA has still received no telegrams on subject from Corea probably on account his illness and therefore know only what we have told them (Deptel 376, April 5).1

PriMin seems clearly desirous concluding rubber agreement. As discussion developed however it became clear it very unlikely we can reach agreement until after new govt has been formed on June 10. Vaithianathan pointed out that since no policy decision had been reached by cabinet it is now legally impossible for govt authorize signature while Parliament dissolved.2 On practical political side PriMin said it wld not be politically feasible sign agreement during election period as result wld almost certainly be at least slight depression [Page 1519] price on local market. PriMin hoped that in circumstance we wld understand his difficulty and be willing delay further discussions until after elections. I said this most unfortunate as credits have been opened up for at least 6000 tons rubber for Commie China. Continued shipments to that destination made negotiations more difficult and were also upsetting local pattern trade. On other hand I assured him my govt wld not wish take any action which might benefit Marxist supported candidates.

In view foregoing it seems unlikely Dept will receive any reply to its counter-proposals until June at least. Emb wld welcome further suggestions from Dept but in view fact GOC began its long vacation today which ends Apr 19 it will probably be impossible even discuss matter further with GOC before Apr 21.

  1. Supra.
  2. On Apr. 3, 1952, Ceylon Governor General Soulbury had issued a proclamation dissolving the House of Representatives effective Apr. 8, 1952, and stating that new elections should be completed by May 31, 1952 and that the first meeting of the newly elected House would take place on June 10, 1952 (despatch 817 from Colombo, Apr. 8, 1952; 846E.2395/4–1052).