356. Memorandum From the Department of State Executive Secretary (Brubeck) to the President’s Special Assistant for National Security Affairs (Bundy)0

SUBJECT

  • Tin

In recent weeks Departmental officers have engaged in consultations regarding tin, first with the International Tin Council,1 which failed to reach agreement (enclosures 2 and 3)2 and second, on Malayan initiative, with a group of representatives of tin producing countries. The latter, however, declined to express satisfaction with a United States proposal that a maximum of 200 tons weekly be disposed of for an initial six months period (enclosure 4). An exchange of telegrams (enclosures 5 and 6) has resulted in acceptance by Malaya of a disposal program of 200 tons weekly for the remainder of 1962. Malaya earlier had made vigorous repeated representations seeking a limit of 100 tons and the accept-ance of the higher figure can be viewed as a real achievement in gaining opportunity to start with a test of the market’s absorptive capacity in some reasonable relationship to the presently estimated shortfall.

In both consultations an offer was made, with approval of the representatives of OEP, GSA, Commerce, and Interior that the United States would seek concurrence of interested U.S. agencies in limiting disposals of 200 tons weekly and it does not seem realistic to try to hold to the initially contemplated figure of 250 tons at this stage when Malaya has acquiesced in the ad referendum offer of 200, and may even try to induce a sympathetic reaction among other producers, aside from Bolivia.

During the most recent interview with the Malayan Ambassador, when it was agreed to delay an announcement relative to tin disposals in order to see if any change could be made to meet producer interests, the Ambassador was assured that he would have 24 hours notice of the text of the U.S. government’s release. Accordingly if the draft at enclosure 1 [Page 798]obtains concurrence it will require transmittal to U.S. Missions in tin producing countries and a day’s notice to the Malayan Embassy prior to release.

HF3

Enclosure 1

DRAFT TEXT OF RELEASE REGARDING TIN4

The United States Government, having had consultations with the International Tin Council, held further consultations with the Governments of the major tin producing countries—Malaya, Bolivia, Indonesia, Thailand, Nigeria, and the Republic of the Congo, Leopoldville—on the proposed disposal of surplus tin during the remainder of calendar year 1962.

Desiring to take into account the problem of the producing countries, and to conform as nearly as feasible to the suggestions advanced by their Governments, the United States Government has decided to reduce the quantity of tin to be disposed of to a maximum of 200 tons per week. Of this, an average of approximately 30 tons per week is expected to be used in the foreign aid programs, and approximately 10 tons per week for direct use by United States Government agencies. The quantity actually sold in commercial markets will be reduced accordingly.5 A separate statement being issued by the General Services Administration gives the detailed procedures of offerings and disposals.6

The United States Government is interested in protecting the long-term stability and prosperity of the tin producing countries and therefore assumes the responsibility to observe the market situation closely, and to reduce or suspend sales below the maximum offering if necessary to avoid a significant adverse impact on the market. No bids will be [Page 799]accepted which are not reasonably consistent with prevailing market prices. The United States Government intends to consult with the Governments of the major producing countries if a significant adverse impact should at any time develop. In addition, it intends to consult with those Governments and with the International Tin Council before the end of 1962, concerning the rate and conditions of future disposals. The United States Government intends to make no substantial change in the rate and conditions of disposal without prior consultations with the substantially interested Governments and the International Tin Council.

  1. Source: Kennedy Library, National Security Files, Kaysen Series, Economic Policy, Stockpiling of Strategic Materials. Confidential.
  2. Regarding the U.S. consultations with the International Tin Council July 23-26, see Department of State Bulletin, August 13, 1962, pp. 255-256.
  3. Enclosures 2-6 are not printed.
  4. Deputy Executive Secretary Howard Furnas initialed for Brubeck above Brubeck’s typed signature.
  5. The Department of State issued a revised text of this statement on August 24. For text, see Department of State Bulletin, September 10, 1962, p. 386.
  6. At this point in the statement released on August 24 is sentence: “The weekly limitation will not be cumulative as far as commercial sales are concerned.” (Ibid.)
  7. At this point in the statement released on August 24 are the following sentences: “The General Services Administration will accept only those bids which are reasonably consistent with prevailing market prices. It will reduce or temporarily suspend the sales if it should appear that they are exerting substantial downward pressure on prices.”