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The Netherlands, as in the case of the UK, has been requested by the US to
take action to hold exports of rubber to the USSR to reasonably small quantities to the
extent possible without violation of existing trade agreements.
C.
Siam-USSR Negotiations.
Reports have been received by CIA indicating that the USSR is attempting
to negotiate a "closed agreement" with the Government of Siam for the purchase of
crude rubber. One of these reports states that the Soviets are seeking 2,000 metric
tons of rubber per month; another 3,000 per month; a third, purchase during 1949 of
12,000, about one-seventh of the estimated annual output. Siamese Government offi-
cials have continued to deny reports that the USSR was negotiating for the purchase
of Siamese rubber.
CIA is doubtful that the reported USSR purchase of part of the 1949 Siamese
rubber production will be consummated by contract with the Siamese Government.
The Siamese Government is sufficiently orientated toward the West as to render accept-
ance of the rumored contract unlikely if equally favorable prices for rubber can be
obtained from the US. Furthermore, the Siamese Government does not engage in
the purchase and sale of rubber and is therefore unlikely to enter into this type of
business by reason of negotiation of an agreement with the USSR.
As the USSR opened a legation in Siam in March 1948, it is not unreasonable
to assume that the Soviets have purchased natural rubber from private interests, as
for example the 7,030 tons loaded at Bangkok in May, and the 3,000 purchased for
delivery later in 1948. In addition, forward purchases at the rate of 1,000 tons per
month in 1949 have been reported.
Statistics of Siamese rubber exports by countries of destination are inade-
quate. They do not show any shipments to the USSR in the first nine months of
1948, and the Embassy at Bangkok reports no such shipments during the same period,
thus tending to confirm reports of smuggling. Some legal Siamese rubber exports,
nevertheless, reach the USSR via Malaya, in the export statistics of which they are
presumably included.
d.
Ceylon-USSR Negotiations.
The inferior quality of some of the rubber received from Malaya apparently
led the USSR to inquire in September 1948 regarding the direct purchase of 30,000
tons of Ceylonese rubber in 1948 and all of the production in the first half of 1949.
Because of the strategic importance of rubber, the Government of Ceylon, which has a
decidedly pro-Western attitude withheld reply until the offer could be discussed at the
Conference of Prime Ministers in London in October 1948. The Prime Minister of
Ceylon has since stated that he would not conclude a government-to-government agree-
ment with the USSR on rubber. This does not preclude, however, Soviet purchases
from private interests in Ceylon.
The Soviet inquiry led the Ceylonese Government to inquire of the US and UK
what steps these countries could take to save the Ceylonese rubber industry from the
unfavorable consequences which would result from refusal to conclude negotiations
7
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"ocrText": "The Netherlands, as in the case of the UK, has been requested by the US to\ntake action to hold exports of rubber to the USSR to reasonably small quantities to the\nextent possible without violation of existing trade agreements.\nC.\nSiam-USSR Negotiations.\nReports have been received by CIA indicating that the USSR is attempting\nto negotiate a \"closed agreement\" with the Government of Siam for the purchase of\ncrude rubber. One of these reports states that the Soviets are seeking 2,000 metric\ntons of rubber per month; another 3,000 per month; a third, purchase during 1949 of\n12,000, about one-seventh of the estimated annual output. Siamese Government offi-\ncials have continued to deny reports that the USSR was negotiating for the purchase\nof Siamese rubber.\nCIA is doubtful that the reported USSR purchase of part of the 1949 Siamese\nrubber production will be consummated by contract with the Siamese Government.\nThe Siamese Government is sufficiently orientated toward the West as to render accept-\nance of the rumored contract unlikely if equally favorable prices for rubber can be\nobtained from the US. Furthermore, the Siamese Government does not engage in\nthe purchase and sale of rubber and is therefore unlikely to enter into this type of\nbusiness by reason of negotiation of an agreement with the USSR.\nAs the USSR opened a legation in Siam in March 1948, it is not unreasonable\nto assume that the Soviets have purchased natural rubber from private interests, as\nfor example the 7,030 tons loaded at Bangkok in May, and the 3,000 purchased for\ndelivery later in 1948. In addition, forward purchases at the rate of 1,000 tons per\nmonth in 1949 have been reported.\nStatistics of Siamese rubber exports by countries of destination are inade-\nquate. They do not show any shipments to the USSR in the first nine months of\n1948, and the Embassy at Bangkok reports no such shipments during the same period,\nthus tending to confirm reports of smuggling. Some legal Siamese rubber exports,\nnevertheless, reach the USSR via Malaya, in the export statistics of which they are\npresumably included.\nd.\nCeylon-USSR Negotiations.\nThe inferior quality of some of the rubber received from Malaya apparently\nled the USSR to inquire in September 1948 regarding the direct purchase of 30,000\ntons of Ceylonese rubber in 1948 and all of the production in the first half of 1949.\nBecause of the strategic importance of rubber, the Government of Ceylon, which has a\ndecidedly pro-Western attitude withheld reply until the offer could be discussed at the\nConference of Prime Ministers in London in October 1948. The Prime Minister of\nCeylon has since stated that he would not conclude a government-to-government agree-\nment with the USSR on rubber. This does not preclude, however, Soviet purchases\nfrom private interests in Ceylon.\nThe Soviet inquiry led the Ceylonese Government to inquire of the US and UK\nwhat steps these countries could take to save the Ceylonese rubber industry from the\nunfavorable consequences which would result from refusal to conclude negotiations\n7"
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