RUBBER

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A000200140005-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 2
• Document Creation Date: November 9, 2016
• Document Release Date: July 28, 1998
• Sequence Number: 5
• Publication Date: November 17, 1948
• Content Type: IM

IM - 73
Sanitized - App yed or Release_-., J; ~17A000200140005-6
Director of Central Intelligence
Assistant Director for Reports and Estimates
Rubber
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 ron obtaining Ceylonese rubber. Those present at the
meeting were:
Department of Commerce - F.G. Holt
S.E. Overley
Economic Cooperation Administration - Arthur Cox
H.B. Leggett
Munitions Board - Colonel W.H. Crom
Charles Sullivan
Frederick Bates
National Security. Resources Board - Arthur Wolf
Fred vlinant
Department of State - Donald Kennedy
William T. Phillips
R.G. Hooker
E. Dahl
Gregory Grossman
V'I .C. Armstrong
George H. Alexander
Central Intelligence Agency
2. It was the opinion of those present that notning 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. Futhermore, in view of a probable world surplus of
rubber, the USSR could turn to other areas such as Siam.
3. The PJ;unitions Board cannot now purchase Ceylonese rubber
under its stockpiling program because it has completed its
procurement program through the first half of. 1949 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.
25X1A9a
Sanitized - Approved?Fpr,.I elea e :: P78-01617A000200140005-6
 25X1A9a
Sanitized - ApprQ pd R I q i R 000200140005-6
Director of Central Intelligence
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 along 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 concluded because of the pro-western leaning of
the Ceylonese Government, but that lack of such an agreement would
n* prevent the .>oViets from procuring rubber through private
transactions.
6. Ceylonese rubber is high cost and unless a price of
22-4 cents per pound or better (compared with a current price of
l-f/8 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 194?-49
rubbc?r production and also on a long-term contract. Bo 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 IL-73, it now appears that the USSR may obtain
adequate supplies of natural rubber both for current consumption
and stockpiling.
F/Fo
THEODORE BAB31I TT
Assistant Director
Reports and Estimates
Orig. &
1
- Director
2
- Ass't Dir., ORE
1
ST I G, ORE
1
- P Re
Sanitized - Approv n: P78-01617A000200140005-6