800.6354/165: Telegram
The Ambassador in the United Kingdom (Kennedy) to the Secretary of State
[Received October 28—8:10 a.m.]
2197. My 2176, October 26, 6 p.m. Colonial Office states that British proposal for 100% for current quarter and “not less than” 60% for the first quarter of 1940 was formulated with a view not only to increasing output, but to effecting changes in production policy by indicating to the small mines that the rate of production will remain higher than pre-war levels and thus inducing them to refrain from selling their permits and to use them themselves, thus broadening the basis of production. Colonial Office also states that the figure 60% for the first quarter is not to be regarded necessarily as the final rate but as an assured minimum rate.
Colonial Office also points out that the House of Commons announcement reported in my 2190, October 27, 7 p.m., will be sent to [Page 940] Malaya with suitable comment to indicate that it means to make effective the minimum price.
I gather that Bolivia has informally agreed to the British proposal, but that the British are not at all sure what the Dutch reaction will be. However, they do not wish us to take any action at The Hague, fearing that it might do more harm than good. Therefore, the British proposal is to be regarded for the time being as confidential.