811.24 Raw Materials/1375: Telegram
The Chargé in the United Kingdom (Johnson) to the Secretary of State
[Received November 15—4:08 p.m.]
3758. Since the Clipper on which Hay is to travel is not yet reported to have left New York it has become increasingly likely that the Rubber Committee meeting will have to be deferred for a few days. In view, however, of the possible action that the Committee may take in consequence of Hay’s conversations with Secretary Jesse Jones (Embassy’s telegram 3709, November 12, 7 p.m.) the earliest possible date after his arrival is already fixed. It seems very unlikely that the Committee will wish to go as far as the ideas broached in Singapore’s November 5, 6 p.m., to London (repeated to Department on November 7, 7 p.m.), for the reasons indicated in the Colonial Office letter quoted in the Embassy’s 3709, November 12, 7 p.m. However, some action to meet the new situation raised by the Hay-Jones conversations is likewise to be taken. Most of those concerned seem impressed with the necessity therefor and with the fact that for the time being the interests of the producers and of the American consumers nearly coincide in respect of continued production at a high level and of price stability. There is, of course, differences of opinion as to the quota levels that may be desirable and there is apt to be little support here for risky fourth quarter increase, the course that seems at this moment most likely to be followed being a quota increase to perhaps the region of 100 percent for the first quarter combined with availability of 1941 licenses immediately, thus permitting early export of substantial amounts of rubber that are or may be available in Malaya, Netherlands East Indies, and Ceylon before January. This would naturally mean that no effort to dispose of 30,000 tons over exports would be in prospect until at least the second half of 1941. That much, and even more rubber—probably up to 50,000 tons—would probably be available over and above the amount that could be exported in accordance with the terms of the agreement if steps were not taken to make 1941 licenses usable in 1940.
[Page 281]It seems not unlikely that Hay will return with an attitude very different from that of last year and that the way is consequently open for a period of closer cooperation between the American consumers including the Rubber Reserve Company and the Committee here than seemed likely not so many months ago. There is no present basis here for a guess as to whether the Committee will act on Hay’s suggestion for an increase under section 5 (1) of the rubber agreement but there is considerable opposition to that course.