811.20 Defense (M)/5806: Telegram
The Acting Secretary of State to the Ambassador in Ecuador (Long)
199. Your 227 of March 23. While the question of price is secondary to the urgent need for our acquisition of Ecuadoran rubber output, a system of competing with Argentina at successively higher prices as the negotiations proceed in the various Latin American producing countries would not procure for us the maximum of crude rubber. Dissatisfaction would result in countries where negotiations have been concluded. A price has now been agreed on with Brazil,68 and Brazil is expected to be our biggest source of supply. If the price is too low to bring out the maximum amount it will be changed. Any local factors affecting price are of course to be taken into consideration in fixing the price. A further telegram will shortly be sent you outlining the general attitude of the Department in this connection.
Rubber Reserve Company is prepared to agree to pay a premium of 2½ cents per pound for rubber in excess of 300 tons purchased annually and of 5 cents per pound for rubber in excess of 600 tons annually, the premiums to be paid to the Ecuadoran Government for [Page 399] use in increasing wild rubber production. In addition, Rubber Reserve would agree to establish a fund of $500,000 for use in increasing wild rubber production, premiums paid as above referred to to be credited to the fund.
- See telegram No. 640, March 13, 1942, 7 p.m., to the Ambassador in Brazil, vol. v, p. 692.↩