792.94/138
The British Minister (Hall) to the Assistant Secretary of State (Acheson)
Dear Mr. Acheson: Since my letter to you on July 24th on the subject of Thailand we have had some further reports on the situation from our Minister in Bangkok.
In the first place he informs us that he is told by the Thai Prime Minister that the Japanese are now insisting on 35,000 tons of rubber and that he gathers that Japanese pressure upon the Prime Minister is intense. As a result of this, Sir J. Crosby understands that the Thai Government are now considering a possible way out of the present impasse by assigning no quotas to any country but instead retaining an open market for rubber. What the reactions of the Japanese to this may be has yet to be seen, nor have I yet heard whether my Government would be agreeable to a plan which would be at variance with the proposed agreement under which we were to supply oil in return for, inter alia, an allocation of 18,000 tons of rubber. It is, however, possible that if both your Government and mine were prepared to pay a pre-emptive price for rubber, it might by this means be possible to secure part at least of the 30,000 tons which we are given to understand were to be allocated to Japan, though we must take into account that high prices may stimulate smuggling from Malaya and so increase rubber supplies in Thailand. Presumably, however, it should now be easier to compete with Japan in a matter of this kind, [Page 242] since she will be less likely to expend so freely her diminishing supply of dollars.
I should be very glad to have your views on the above and in particular to hear whether you see any action which your Government could take under present circumstances to counteract Japanese pressure in Thailand.
Yours sincerely,