Foreign Relations of the United States, 1948, Eastern Europe; The Soviet Union, Volume IV

640C.6131/10–2748: Telegram

The Ambassador in the United Kingdom (Douglas) to the Secretary of State

confidential
urgent

London, October 27, 1948—7 p. m.

4653. Deptel 4049 October 22; repeated Colombo 188, Moscow 1245, Hague 541.¹

At his own request Prime Minister Ceylon discussed with me at Embassy current rubber situation. Noel-Baker² and High Commissioner³ also present. Following facts developed:

First, Russians are interested in buying all of Ceylon’s 1 and 2 sheets at above market price but only through June 1949. Actual Russian offer not mentioned. Prime Minister definitely stated Ceylon preferred strongly not to sell to Russians, but either to US or UK. At this point Noel-Baker explained UK unfortunately had no money for this purpose. Prime Minister virtually, though not explicitly, promised not to sell to Soviets. He could not, of course, make public announcement of such decision or flatly turn down Russians.

Second, as separate but associated problem, Ceylon is concerned about longer term future of its rubber industry which is high cost. Prime Minister stated, partly because of excessive tapping for allied war effort. Prime Minister anxious to know whether US willing assist in maintaining Ceylon rubber industry, say perhaps on five-year basis. If answer affirmative, Ceylon will discuss details Washington, London, or elsewhere. Otherwise, Prime Minister stated more rubber plantations will continue to go out of cultivation and other crops will have to be substituted.

I feel that if second phase of problem could be satisfactorily settled, US could probably obtain immediately available rubber even at market prices. Prime Minister is flying to Ceylon Sunday and I have told him I would try to have something further to say to him before he leaves. Would Department kindly let me know what I can tell him and what further action, if any, Embassy should take in this matter?⁴

Sent Department 4653; repeated Moscow 276.

Douglas

1. Ante, p. 574.
2. Philip J. Noel-Baker, British Secretary of State for Commonwealth Relations.
3. Sir Walter C. Hankinson, High Commissioner for the United Kingdom in Ceylon.
4. In early November 1948 the Department of State decided that the locus of discussions on the Soviet rubber problem should be shifted to Colombo and Washington. On November 13, acting on instructions from the Department, Ambassador Felix Cole in Colombo met with Prime Minister Senanayake. In telegram 290, November 13, from Colombo, not printed, Ambassador Cole reported that Senanayake had spoken largely along the lines of his conversation with Ambassador Douglas in London. Senanayake stated categorically that he would resist to the utmost any government-to-government rubber arrangement with the Soviet Union (646C.6131/11–1348).