446E.9331/10–2352: Telegram
The Acting Secretary of State to the Embassy in Ceylon1
priority
129. Dept commends Emb on speed and detail its reports Ceylon mission to China.
Dept believes you shld follow up ur frequent discussions US views re Ceylon rubber trade with Chi Commies and latest Chi Commie proposals, by conveying to PriMin and other key GOC officials US views [Page 1554] along fol lines. Dept knows you familiar these points and no doubt have stated them on previous occasions but believes wld be helpful for you repeat them as views US Govt. Dept leaves ur discretion whether approach shld be formal, informal, oral or written, and you of course at liberty modify or expand as you consider appropriate:
- 1.
- US Govt greatly concerned re danger of Ceylon’s econ dependence on Commie Chi particularly for food supplies if proposed five year agreement made. US Govt notes that under proposals one half Ceylon’s rubber production and all sheet rubber wld be allocated Commie Chi and wonders whether GOC has considered long term effects (a) depriving itself important dollar earner and (b) consequent modification present trade channels for rice supplies. Believe it entirely probable, if agreement ratified, that in due course, Ceylon wld find itself at mercy Chi Commies and obliged accept their terms which wld most likely be disadvantageous instead of favorable.
- 2.
- It evident to US Govt that Chi Commie offer not made primarily out of econ considerations, but motivated basically polit factors including breach of UN embargo. US Govt urges GOC carefully consider use which Commies wld most probably make of propaganda on deal in Ceylon to strengthen position Ceylon Commie party and use Chi Commies cld make of agreement to create pressure other countries for closer trade and polit relations with Peiping.
- 3.
- US Govt convinced Chi Commie auths, under cloak of proposed agreement if ratified, and when pattern established in which Ceylon dependent on Commie Chi for supplies rice and market for rubber, will require that trade or dipl mission be established Colombo. Such mission, as in case other non-Commie countries which have entered into formal relations with Commie Chi, wld most probably actively assist local Commie party in latter’s effort overthrow democratic Govt Ceylon, and serve as base for operations in nearby countries where Commie parties significant force. US Govt doubts that GOC wld be able long resist Chi Commie pressure opening up regular relations with Ceylon.
- 4.
- US Govt recalls impressive victory UNP over Commies recent election, which fought basically on issues democracy versus totalitarianism, Ceylon nationalism versus internatl communism. Frequently voiced principles and views Ceylon’s leaders have associated Ceylon with other nations of free world and formed firm basis for friendly US—Ceylon relations. Views and assurances solidarity with free nations which have characterized UNP and GOC pronouncements were weakened by continued shipments strategic material to UN-named aggressor and now appear vitiated by most recent action involving possibility formalization this trade thereby contributing, even more than in past, to buttressing milit effort of aggressor in Korea which costing thousands lives Amer and other UN forces fighting there. US Govt regrets that late PriMin’s and present PriMin’s assurances that Ceylon was searching for means stopping rubber shipments wld lose force in light present development if confirmed.
- 5.
- If you consider useful you might recall numerous US efforts assist Ceylon meet food crisis and solve problem rubber exports.
- 6.
- US Govt notes that 80,000 ton rice-rubber agreement already signed. In spirit of friendship which animates our relations US urges GOC study most carefully probable ramifications present Chi Commie [Page 1555] proposals and implications for welfare independence Ceylon. US Govt earnestly hopes GOC will decide after mature consideration not enter into long term agreement with Chi Commie auths. US convinced such agreement wld result in linking Ceylon’s economy inextricably with that of Commie Chi to Ceylon’s ultimate disadvantage and in penetration of Ceylon by external communists who with willing helpers in Ceylon wld endanger democratic institutions of country.
FYI Dept repeating Embtels 191,2 187,3 and 1814 Rangoon, Djakarta, New Delhi, Singapore and Paris for info and for comment to Dept and Colombo on official and public reaction this matter. Dept wld appreciate info re exact terms trade agreement as signed (i.e. prices, deliveries etc) and all possible details five year proposal, including timing. Also desire info on place graphite and other commodities in recent discussions since only passing ref made in press reports.