Foreign Relations of the United States, 1952–1954, Africa and South Asia, Volume XI, Part 2

460.979/4–2452: Telegram

The Chargé in Ceylon (Gufler) to the Department of State

confidential

Colombo, April 24, 1952—5 p.m.

597. Exter, Gov Central Bank called personally today to discuss status rubber negots in light info included Deptel 383 [393], April 18,¹ given him by me. Said he pressing GOC to continue talks before new govt formed as contract wld bring badly needed dollars. Also believes US shld be interested in order stop further shipments rubber to China. Reported new PriMin desires agreement but he and Perm Secy MEA cannot take final decision without Cabinet approval which cannot be given until after elections.

Exter has impression GOC disturbed by Apr 30 deadline and inquired as to reasons therefor. Gave him substance Deptel 383 [393], Apr 18, but he unable understand meaning “approaching cessation new rubber activities GSA” unless refers to decontrol announced Apr 20 or possibility GSA unable make contract after end fiscal year. Emb wld also appreciate clarification.²

Finally Exter inquired if it worthwhile for GOC to reply to US counterproposals (Deptel 376, Apr 5)³ despite fact it unable sign contract before June or whether negots that basic definitely closed as of Apr 30. Emb answered it wld transmit this question to Dept.

He also informally intimated GOC cannot accept price for thick pale crepes based on Singapore average for thin pale crepes and questions whether Ceylon production No. 1 X, 1, and 2 former item can meet US demand. Central Bank sees little difficulty in agreeing price and volume of sheet.

If Exter’s impressions correct it appears GOC remains sincerely interested in contract and might wish continue negots during interim before new Parl meets. It cannot under any circumstances sign contract before June.

Gufler

1. Department telegram 393 to Colombo, not printed, stated that although the Department was sympathetic with the government’s difficulties, it would be unable to hold open the current offer beyond Apr. 30 because of rapidly diminishing funds and the approaching cessation of new rubber activities by GSA (846E.2395/4–1052).
2. Department telegram 405, Apr. 28, 1952, explained that the approaching cessation of new rubber activities referred to the termination on June 30 of GSA purchases for industry and to the fact that the U.S. rubber stockpile was nearing completion (460.979/4–2452).
3. Ante, p. 1517.