Office of the Historian

846E.2395/7–1552

Memorandum by the. Deputy Director of the Office of International Materials Policy (Armstrong) to J. Robert Fluker, Officer in Charge of Economic Affairs, Office of South Asian Affairs

restricted
[Washington,] July 15, 1952.

Subject:

  • Rubber agreement with Ceylon.

This memorandum summarizes the points concerning the practicability of a rubber agreement with Ceylon which were made at a meeting in your office on July 14.

On June 30 the Government stopped buying rubber for current consumption by industry. At present the Government is buying natural rubber only for the stockpile.

The General Services Administration now has under contract nearly enough rubber to meet the minimum stockpile objective. Since some rubber remains to be purchased, it theoretically would be possible for the Government to negotiate a contract with Ceylon for a modest tonnage of stockpile rubber. However, those officials in GSA who are responsible for buying rubber intend to maintain a maximum freedom of movement in purchasing the remaining tonnage and have stated categorically that they no longer are interested in signing a contract with any government for any tonnage of any kind of rubber.

If there were general agreement on the wisdom of such a course, the Department could attempt by means of a high level approach to have the operating officials overruled. OMP believes that an attempt along these lines would be unwise. It would be sure to irritate the operating officials in GSA who have been among the Department’s strongest allies in interdepartmental rubber discussions. It might fail, since no operating agency likes outside meddling in its affairs. In any event, GSA or Defense could not be approached on the subject until full intradepartmental discussion had indicated that now was the time and Ceylon was the issue over which to intervene. The whole operation could hardly be concluded in time for the present series of meetings with the Ceylonese.

Conceivably an attempt may be made to justify a contract as a means of keeping Ceylonese rubber away from communist China. The primary [Page 1525] responsibility for initiating any such suggestion would lie in EDS rather than in OMP. It is only fair to state, however, that OMP perceives numerous pitfalls, not only for rubber but for other commodities as well in any such scheme and would do its best to secure recognition of these difficulties while an E position was being formulated.