846E.2317/6–2552: Telegram

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


685. Called on PriMin today on his summons and was recd in presence Min Food-Agri Goonetilleke and Perm Sec MEA. PriMin stated he plans send Goonetilleke Washington reopen rubber discussions and explore possibility obtaining urgently needed rice and financial assistance. PriMin indicated desire avoid recurring rice crises by some supply agreement that might run for several years under which Ceylon could have certain portion American exportable rice surplus beginning with Sept harvests. He threw out suggestion this cld possibly be tied up someway with rubber agreement and referred to rice-sugar agreement he understood in effect between US and Cuba.

Goonetilleke will be accompanied to Wash by Asst Sec Fin Min Rajendra Coomaraswamy and Food Comm Alvapillai. En route Wash will visit Rome and London. Plans discuss possibility purchase Italian rice and have discussions UK Govt and Bank Eng on rice and financial question. N U Jayewardena, Deputy Govt Central Bank Ceylon will accompany party to London.

Exter Gov Cent Bank informed me this morning that summons from PriMin imminent result last nights “dramatic” cabinet session. Exter stated that GOC encountering difficulty obtaining rice usual south Asian sources result competition dlr purchasers among whom FPAP Logistic Command buying for South Korean Army. He added that rice suppliers reluctant sell rice for sterling and Ceylon now at competitive disadvantage as purchaser since its dlr earnings power declined result falling off direct rubber exports US. Exter believes this situation has increased desirability US rubber purchase agreement in Ceylonese eyes.

PriMin and Goonetilleke both well aware any discussion rubber question must be on basis new situation, since prior US offer expired Apr 30 (reDeptel 383[393], Apr 18).1

[Page 1523]

PriMin stated that Goonetilleke’s trip would be described as “search for food” and specifically requested that other purposes visit be kept secret.

Before sending Goonetilleke PriMin wld be grateful for indication his visit Wash wld be welcome. Goonetilleke must be back Ceylon July 26. Tentatively plans two days stop Rome, week London, ten days Wash. No arrangements made Rome, London visits pending Wash approval which urgently needed, as maintenance this sched requires departure Ceylon not later than next Sat. or Sun. Tele inst urgently requested re acceptability visit. Wld also appreciate in same or follow-up tele any information or comment Dept believes could usefully be communicated PriMin or Goonetilleke prior latter’s departure.2

  1. See footnote 1, p. 1519.
  2. The Department replied in telegram 463 to Colombo, June 26, 1952, that it was willing to see the Ceylonese Delegation and would give consideration to Ceylon’s rice needs. However, it warned that rice was generally unavailable for export at that time, although a new crop due in August would provide marketable supplies later. Any agreement on rubber would have to be made separately from any rice transaction, and the Department reiterated its position in telegram 393 that it was too late to reach a rubber agreement on the terms previously discussed. (846E.2317/6–2552)