446E.9331/10–2752: Telegram
The Ambassador in Ceylon (Satterthwaite) to the Department of State1
priority
203. I have just conveyed orally to PriMin US views re Commie Chinese rice-rubber proposals substantially as set forth in Deptel 129, Oct 23.2 Perm Sec Vaithianathan and Black also present.
In subsequent discussion PriMin.
- (1)
- Gave categorical assurances his intention to continue fight on Communism.
- (2)
- Stated he had given most serious consideration to all implications rice-rubber proposals and while he is not particularly happy about situation, can see no satisfactory explanation to electorate if govt rejects them.
- (3)
- Pointed out that proposals offer solution to 3 most critical politic-econ problems confronting Ceylon today, i.e., assurance adequate rice supply, necessity obtaining econ price for rubber and amelioration balance of payments position. He emphasized that surest way for GOC to play into hands local Commies wld be to reject this solution. He had sent Min Food Goonetilleke to US in effort to obtain our aid in solving these problems but aid had not been forthcoming to degree necessary.
- (4)
- Emphasized that as far as danger of Commie Chinese pressing to establish trade or diplomatic mission concerned, Ceylon only country in area which consistently has rejected request of Commie countries to establish such missions.
- (5)
- Made much of fact that UK is selling rubber to USSR and that both UK and India are carrying on large scale trade with China. In this connection PriMin commented that it is unfortunate that one of three of Ceylon’s major export commodities has to be a strategic material. So far as change in pattern trade concerned, this has already been effected. For example, Ceylon is practically out of Burma rice market as result heavy Jap and Indonesian dollar buying.
PriMin made it clear that he personally sees no alternative but to ratify proposals. In reply direct questions he said that cab action is being deferred pending Chi clarification certain terms in proposals. He expects this clarification will be received shortly. Although it is possible cab action may be deferred until after Commonwealth PriMins meeting in London, he sees no reason why it shld be.
In refutation we used every argument to convince him that Ceylon’s long-term rather than short-term interests wld best be served by rejecting rice-rubber agreement. Neither he nor Vaithianathan gave any indication being convinced by these arguments although Vaithianathan did tell Black confidentially on side that GOC had before mission’s return practically decided to disavow any agreements mission might have made. Terms offered by Commie China were however so favorable it now seemed impossible do so. PriMin insisted that if his govt rejected present proposals it wld lose its present majority; “That you can’t have a govt without support of the people”; that if his govt were overthrown “there wouldn’t be any long-term”.
It seems likely therefore that as indicated Embtel 191 Oct 223 GOC will for sake political expediency ratify agreement.