103–GSA/12–451: Telegram
The Ambassador in Indonesia (Cochran) to the Secretary of State
810. For Larson GSA Walsh EPS from Wilson. Mtg today Econ Ministry with Emb representative on rubber contract adjustments heretofore under discussion by Emb and covered by several exchanged cables. Indos acknowledge their commitment contract, accepted dismissal their claim on warehouse fees and storage charges September, also accepted their contract responsibility arranging shipping and placing free on board.
Remaining unsettled item from meeting is price change in contract. This taken under advisement. They requested fixed price arrangement together with floor price. We stood firm on average Singapore market price formula, expressed willingness consider any reasonable proposition on changing time period of determining average price but said in any event we would not consider any formula or mechanism that resulted on more than Singapore market. Govt plantation manager1 made inconclusive argument on his need for known fixed price even beyond four months periods specified in contract but did not receive support from representatives Econ Ministry. Also argued he wanted floor price to safeguard market price going below his cost of production. We maintained basic price formula of contract and stated Indos must assume their normal risk under contract same as buyer. Examination Singapore Aug average prices indicate more favorable to Indo for last quarter 1951 as provided in contract as against developing new average market price each month.
As meeting broke up plantation manager made his own personal query to effect wld US be willing take Aug average price for six months instead of four or even whole contract term. Replied that if they wanted submit formal question we wld reply but it appeared this wld cancel basic contract average market price and be substitute means of setting fixed price based on Aug average. No doubt idea springs from fear rubber market might go lower. No other Indo member spoke in favor this idea. Offer to waive three percent discount on average price in contract was reemphasized as concession matching their willingness ship only high grade rubber sheets and be package settlement all items.
Believe Emb can conclude shortly remaining question price under contract and cover points in written supplementary memo sheet where necessary. Consider unnecessary my presence further discussion Indos on rubber contract. [Wilson.]
- Mr. Saksomo.↩