Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

79. Telegram From the Department of State to the Embassy in Canada⁰

August 27, 1958, 4:30 p.m.

127. Dept currently exploring with Embassies Australia, Canada, Mexico, Peru, four largest producers and exporters, possibility prompt agreement in principle to reduce lead-zinc exports next twelve months pending establishment at London meeting Sept¹ of study group to work out longer term solution. For short term Dept proposing control over world exports as to quantity, not destination. Method implementation of controls to be left each country. Agreement in principle would strengthen position USDel at London meetings and is type of action which must be agreed to multilaterally if unilateral action to be avoided. If no immediate short-term solution possible, tariff increase appears inevitable although Dept hopes it can be staved off until after appraising results of London meeting. Following defeat Minerals Stabilization Plan Aug 21² industry spokesman informed Dept large part of industry would close down shortly if relief not provided within 30 days. Industry still wants tariff action but willing consider other effective remedy if forthcoming promptly. White House under pressure take action Tariff Commission recommendation, and Purtell Amendment to Trade Agreements Extension Act³ now permits much higher level of duties than formerly.

Mexicans have indicated their continued opposition to tariff increase and willingness to cooperate in export controls.

Canadians called at Dept twenty-sixth.⁴ Assistant Secretary Mann pointed to US problems regarding solution: 1) USGovt cannot reduce production without Congressional authority; 2) anti-trust laws prevent US industry participation in voluntary industry arrangements. Noted US industry had voluntarily cut back production 25% below level at beginning 1957 to prevent collapse prices. Smelters had been stockpiling with mounting financial burden, straining reserves, which cannot continue much longer. Imports in 1958 have continued at record levels. Asked if Canadians could agree in principle to short-term proposal. Controls would apply to both ores and metals. Dept receptive to ideas other govts. Need for action urgent.

Herter

0. Source: Department of State, Central Files, 411.006/8–2758. Official Use Only. Drafted by Gilbert E. Larsen, cleared by Clarence W. Nichols, and initialed for Herter by Mann.
1. U.N. Secretary-General Hammarskjöld called the meeting to discuss copper, lead, and zinc.
2. The Senate adopted S. 4036 on July 11. The House of Representatives, however, rejected the bill on August 21. Regarding S. 4036, see footnote 2, Document 72.
3. Section 3(a) (1) of P.L. 85–686, it enabled the President and the Tariff Commission to convert specific duties to ad valorem equivalents based on their 1934 values, and to increase ad valorem duties by as much as 50 percent of their 1934 values.
4. No record of this conversation has been found.