Foreign Relations of the United States: Diplomatic Papers, 1943, The American Republics, Volume VI
811.20 Defense(M)Colombia/455
The Ambassador in Colombia (Lane) to the Secretary of State
[Received January 15.]
Sir: I have the honor to refer to my telegram No. 44 of January 9, 4 p.m., 1943,28 and to enclose copies of the draft note covering the strategic materials program and the proposed operating agreement covering the rubber program which were the subjects of the discussions outlined in my telegram under reference.
Respectfully yours,
Draft Note Covering Strategic Materials Program
In accordance with resolutions emanating from the Second Consultative Meeting of Foreign Ministers of the American Republics,29 approved in Colombia by Law 20 of 1941, and also in accordance with resolutions adopted at the Third Consultative Meeting of Foreign Ministers of the American Republics held in Rio de Janeiro30 concerning strategic materials, the Government of Colombia and the Government of the United States of America agree to the following:
- 1.
- As a practical expression of Continental Solidarity, the Colombian Government will make available to the Government of the United States all basic and strategic materials or products, with the exceptions listed in paragraph 3, found in public lands of the Republic of Colombia, required in hemispheric defense.
- 2.
- The Colombian Government will grant exclusively to the United States Government or to its agencies Export Licenses for these products found on private lands.
- 3.
- It is agreed that Colombia will retain such strategic materials or products as it may require for its internal consumption, it being understood, however, that the quantity of these materials or products will be limited to minimum essential requirements and that the quantities will be fixed in advance by mutual agreement. Further, that Colombia will take all necessary measures to conserve and to prohibit the accumulation of such materials or products.
- 4.
- The foregoing does not grant any Government, person or entity exclusive rights in the production, purchase, sale, transportation or [Page 16] internal commerce of such products within the territory of the Republic of Colombia.
- 5.
- The Government of Colombia will grant exemption of all duties, taxes, imposts, excises, or governmental charges imposed by Colombia or any political or administrative subdivision thereof on all merchandise, supplies, equipment, or materials which the Government of the United States or any of its agencies must ship to Colombia, for the exclusive purpose of stimulating production or procurement of strategic materials. In addition, all capital imported by the Government of the United States or any of its agencies for the purposes mentioned above or for any operations in connection thereto will be exempt, in the same manner, by the Colombian Government, of all taxes, charges or restrictions of any nature whatsoever.
- 6.
- Neither the Government of Colombia nor any political or administrative subdivision thereof shall impose any income, franchise, personal property, or other tax, impost, excise, or governmental charge on any United States Governmental agency or on any of its officers or employees (except such officers or employees who are citizens of Colombia).
- 7.
- The United States Government will purchase the products referred to in this agreement from producers or owners in accordance with terms of operating agreements entered into between the two Governments or their respective agencies.
- 8.
- The Government of the United States will stimulate the production of these products in Colombia and this will be accomplished in accordance with terms of the Operating Agreements.
- 9.
- The United States Government, with the approval of the Colombian Government will construct in Colombia necessary works for the stimulation of production and development as well as transportation of these products.
- 10.
- All operating arrangements entered into as a result of this agreement will be agreed upon by the appropriate Ministry or administrative department of the Colombian Government and the duly authorized representative or agency of the United States Government with the approval of the Minister of Foreign Affairs and the Ambassador or the principal diplomatic representative of the United States of America.
Proposed Operating Agreement
In order to secure maximum tonnage quickly, it is proposed that a six man Board be named to formulate rubber procurement policies [Page 17] involving joint operations between Caja de Crédito and Rubber Reserve. It is recommended that the Board be composed of a chairman, who will be the Minister of Foreign Affairs or his representative, two members to be named by the Colombian Government, and the remaining three members to be named by the United States Government.
Joint operations of the Caja and Rubber Reserve will include the following functions, although either agency may also carry on these same functions independently:
- 1.
- Purchase rubber from all classes of producers.
- 2.
- Establishment of commissaries and supply depots.
- 3.
- Expenditure of development funds for public improvements such as transportation and communication facilities.
- 4.
- Advancement of funds for the stimulation of the exploitation of rubber (where loans of this character are made “notice of loan” will be filed with Caja or Rubber Reserve, as the case may be, whereupon the respective agency will use its best efforts not to buy rubber from a borrower unless that borrower can show satisfactory evidence of liquidation of loan. This is not to be construed as imposing responsibility for any loss which the lender might suffer due to the fact that either Caja or Rubber Reserve, by the error of its representatives or the fraudulent claims of the seller, bought rubber which had been mortgaged to any other party.)
- 5.
- Caja will advise Rubber Reserve whenever it has rubber ready for shipment, giving amount, class, and quality. On receipt of such advice, Rubber Reserve will arrange for establishment of credit in favor of Caja for the value of the shipment to be made, minus export tax which Rubber Reserve will pay direct to the National Government on receipt of export license.
In addition to the right of arbitration and final decision in any question involving interpretation of the above points, the Board will have the following additional duties:
- 1.
- Determine the schedule of minimum prices by grades and classes which authorized purchasers for export will pay to various classes of sellers, such as producers, entrepreneurs, middle men, plantation proprietors, etc. Also determine minimum prices by grades which will prevail in the event of transactions between any two classes of sellers. All prices will be published and posted throughout the country by the Board.
- 2.
- Act on appeals by Rubber Reserve to reconsider direct production loan borrowers whose names were previously submitted to and rejected by the Caja. This applies to direct production loan recipients proposed by Rubber Reserve, all of whose names will be submitted in advance, to the Caja.
- 3.
- Determine and publish prices on articles of food, clothing, and equipment necessary to workers employed in the procurement of strategic materials. As a matter of cooperation, Rubber Reserve may at its discretion absorb part of the cost of such articles or of the freight and transportation cost. Where Rubber Reserve makes [Page 18] available such supplies, prices will be determined by Rubber Reserve and approved by the Board.
- 4.
- Pass on all proposed projects involving the construction of roads, airfields, and other transportation and communication facilities which may be construed as of permanent or semi-permanent character. After approval by the Board, projects will be negotiated by the proposing agency with the appropriate Colombian Government Agency having jurisdiction.
- 5.
- Caja and Rubber Reserve will submit to the Board and each other monthly reports of their transactions in rubber stating amounts purchased by classes and grades, location of stocks, tonnage exported, tonnage delivered to local manufacturers for consumption, and tonnage in port towns awaiting shipment.
Decisions of the Board will be based upon a majority vote of all six members.
All the foregoing the subject of such variation as may be required to permit Rubber Reserve to carry out previous commitments.