SUBJECT: Rubber

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A000200140004-7
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 2
• Document Creation Date: November 9, 2016
• Document Release Date: July 28, 1998
• Sequence Number: 4
• Publication Date: November 15, 1948
• Content Type: IM

41
STP*NDwND FORM N 64
rnitiLed - Approved
Office Memorand
~-0
? UNITED STATES GOVERNMENT
TO : Assistant Director for Reports and Estimates
FROM : Economics Panel, ORE
SUBJECT: Rubber
DATE: 19 November 1948
1. Recent efforts of the USSR to obtain rubber in Ceylon,
following unusually large purchases in Malaya earlier in the year,
was the occasion for a meeting of representatives of interested
agencies at the Department of State on 17 November to explore
possible action 'to be taken in order to prevent the USSR from
obtaining Ceylonese rubber.
2. It was the opinion of those present that nothing could
be done to prevent Soviet procurement of Ceylonese rubber in the
near future. It was felt that preclusive buying, is not now
feasible because it would invite Soviet retaliations on manganese
and chrome. Furthermore, in view,of a probable world surplus of
rubber, the USSR could turn to other areas such as Siam.
3. The Munitions Board cannot now purchase Ceylonese rubber
under its stockpiling program because it has completed its
procurement program through the first half of 19+9 and has no more
funds available. The ECA has counterpart funds in Italy and
possibly France, and was requested to study the possibility of
transferring part of these funds for purchase of Ceylonese rubber
at market prices.
4. The Department of State was requested to prepare for a
conference on the subject with the new Ceylonese Ambassador. The
interested agencies were requested to study the possibilities of
a general Government program for purchase of rubber so as to reduce
the supplies available to the USSR. Without the cooperation of
other countries which control rubber producing areas, however,
action by the United States alone probably could not be very
effective. The United Kingdom has already arranged for its short-
term supply of rubber and is apparently unwilling to participate
in such a program.
5. It was felt that the Soviet request for a government-to-
government agreement with Ceylon on rubber, as proposed by the
USSR, would not be concludect because of the pro-western leaning-of
the Ceylonese Government, but that lack of such an agreement would
not prevent the Soviets from procuring rubber through private
transactions.
DOCUMENT NO.
NO CHANGE IN CLASS. Q
^ DECLASSIFIED
CL': v. C;: ':h D TO: TS J ky,.~/yD A
NEXT RL-VIE. W DATE: _ ~_L
AUTIH: HR 70-2
DATE:7 , t"OVed Fo
1617A000200140004-7
 .Sanitized - A -oved Fob.9 kea 0" ` rA RDP78-o1617A000200140004-7
Assistant Director, ORE -2- IS November 1949
6. Ceylonese rubber is high cost and unless a price of
22- cents per pound or better (compared with a current price of
19-5/9 cents on the New York market), is received, much rubber
acreage is likely to be diverted to other crops. Ceylon has
approached the United States regarding the purchase of 1949-1949
rubber production and also on a long-term contract. No decision
has been made on this matter, and the possibility exists that
Ceylon may be using the Soviet inquiry as a lever to obtain more
favorable terms from the United States.
7. In view of these developments and other events as reported
in IM 73, it now appears that the USSR may obtain adequate supplies
of natural rubber both for current consumption and stockpiling.
25X1A9a
Chemicals and Chemical
Processing Group
r- A I -.,.~ 11.1 C
Sanitized - Approved E Vr . ~~;} p ; 9--RflP78-01617A000200140004-7