493.46E9/9–1952: Telegram
The Ambassador in Ceylon (Satterthwaite) to the Department of State
124. Had first serious talk since my return with PriMin Dudley Senanayake yesterday. Said I had followed elections with interest and was of course pleased with outcome. I had however been out touch with Ceylon affairs during last six weeks my absence1 and was therefore very disappointed learn on arrival that our govts had reached no [Page 1542] agreement on rubber which was going to Chi in ever increasing quantities and that official Ceylon mission was now in Chi one member of which had reportedly told press in Singapore that Ceylon was ready sell its entire rubber crop to Chi.
PriMin at once protested mission was authorized only investigate and report and had been sent in reply to Chinese invitation only under dire political necessity of exploring every offer rice. If possibility obtaining Chinese rice were not explored and if present profitable sales rubber to Chi were now shut off rice consumers and rubber producers wld rise up and overthrow this govt.
I said I understood and sympathized with his difficulties in view present econ crisis confronting Ceylon. I hoped however he realized that any free country entering into the close relations with a Commie country of kind so enthusiastically described in press interviews by mission leader is in serious danger falling into Commie clutches both politically and economically. I hoped he wld also keep in mind reaction any such agreement wld have on US public opinion. Our soldiers have been dying for over two years in defense very objectives which he had advocated so successfully in his own political campaign. He shld keep in mind also that rubber is commodity most urgently needed by Commie China and was going directly into its war machine. Moreover Ceylon’s ever increasing commercial relations with Chi were being anxiously watched by Indonesia and Malaya who were observing UN resolution.
It was unfortunate I continued he had not been present at talks concerning rubber shipments I had had with his father and which latter had had with his advisers. While his father felt very strongly that Ceylon’s rubber shld be sold on free market he had nevertheless mentioned several times to me his concern over moral issue involved. He had also assured me his govt wld have nothing do with rubber-rice barter deal reportedly offered GOC by Commie Chi about year ago. To this PriMin made curious reply that Food Min had told him only reason this proposal was not accepted was because investigation indicated Chi actually had no rice available.
PriMin did however seem genuinely concerned over failure our recent negots and said he had sent Goonetilleke to Wash because of importance he attached to reaching agreement with US. Unfortunately assistance we had offered Ceylon as compared with that being made other countries in Asia made it politically impossible for him accept our last proposal. He hoped we wld realize seriousness econ crisis facing his govt re which he must face Parl next week. He concluded by saying he wld like discuss situation at greater length with me after this debate had been completed.
- Ambassador Satterthwaite had taken home leave to the United States from late June to late August 1952.↩