846E.2317/9–1553: Telegram
The Acting Secretary of State to the Embassy in Ceylon
66. Ambassador Corea called on Assistant Secretary Byroade September 14 to sound out US “position” on Ceylon. Said he was stimulated make this approach by (1) recent unrest in Ceylon,1 (2) favorable US public reaction to his statements of GOC view of rice-rubber agreement during his recent US tour, and (3) possibilities and opportunity let five-year agreement lapse through failure reach agreement on second year’s prices in negotiations GOC mission now in Peking.
On point (1) he noted GOC believe must quell dissatisfaction of people before opposition consolidated and becomes grave threat continuance present GOC. On point (3) he said that good possibility existed for failure reach agreement on prices for second year of 5 year agreement and implied that with US help GOC might be able implement its desire “to get back into step with the free world.”
In response to question whether possible US help was purely financial matter to GOC, Ambassador said GOC considerations were not entirely financial although Ceylon economic situation made finance important to GOC.
Ambassador seemed to concur in Byroade’s indication previous Goonetilleke aid demands were excessive then and from US standpoint would be even more so now. Byroade noted that lack of knowledge in Washington of next year’s US aid programs limited present US consideration of Ambassador’s request to matters of rice and rubber. Ambassador informed that while rice situation appeared to be easier with developments in Southeast Asia, the outlook for US rubber agreement seemed even tighter than in previous discussions. Ambassador expressed hope US would study the situation and suggested the possibility using some wheat as substitute for Ceylon rice imports. Department observed that any US wheat help which might be possible for Ceylon could not impinge on normal trade.
Byroade said Department would undertake study of situation immediately and without prejudice. Ambassador indicated some urgency in getting US reactions to his approach because fact Ceylon Mission now in Peking.
Department believes that prior to departure Ceylon Mission from Peking it would be tactically unwise for US give to GOC any concrete proposals which might develop from study here.
Desire Embassy comment.
- There had recently been a number of strikes and protest marches and several incidents of violence resulting from the Ceylon cabinet’s decision to reduce the Government’s rice subsidy, thereby raising the cost of rice for the general population. More detailed information is contained in Department of State file 746E.00 for the months of August and September 1953.↩