January 9, 1951
Memorandum of Telephone Conversation
Secretary Acheson called Secretary Sawyer and said that he had gotten further reports on the matter of the shipment of rails by France to China and the drugs off-loaded in India.
In reference to the first, he said the matter has been taken up again with Bruce by Schuman. Ambassador Bruce reported that it was the subject of debate yesterday in the French Parliament and will go before another Cabinet meeting tomorrow, at which time it will probably be decided and we are hopeful that the decision will be that the shipment of rails to Communist China should be stopped. In the meantime, no rails have been shipped.
In regard to the matter of drugs off loaded in India, we have talked with the British Embassy, which is very helpful and cooperative. They believe now that the only way to handle it is to bring informal pressure on the British ship owner involved not to pick up the cargo. The possibility of a British ship taking the cargo to Hong Kong and having it condemned is still receiving consideration by the British are now disinclined to that.
Mr. Acheson said if it were possible to know whether there was any specific ship which was planning to take the cargo it would be very helpful to the British who had not been able to run down any definite information. Secretary Sawyer said he would inquire into this immediately.
Secretary Sawyer asked whether other shipments from France to Communist China would be stopped as the result of a favorable Cabinet decision. The Secretary said that he had been confining himself solely to the point of steel rails.
Secretary Sawyer then brought up the question of rubber. He said that he had been at a meeting with the British where they were raising the question of getting sulphur and cotton.
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Someone on our side had put up to the British the question of how we get rubber from Malaya when we want it. The Secretary said that he had been going into the question; that as he understood it, it was a question of rubber being sold in the open market. We buy a little over half of the rubber which is produced in the Far East, a small portion is bought by the Russians and the Chinese, the remainder is bought by others. The Secretary pointed out the difficulties of trying to stop the buying of rubber by Russia and China in the Singapore market when they can go to Indonesia and get it, the Singapore market being, as Mr. Acheson pointed out, only a stock exchange.
Mr. Sawyer said that Mr. Symington had told him that there is an Englishman by the name of Lee whose father is a Communist who had been buying with the support of the British Government as much rubber as possible for Russia. Mr. Acheson said he thought that one particular load of rubber had been bought which had been offered to us in the first place and refused because of the high price. Russia had bought it at an even higher price. Secretary Sawyer said Mr. Larsen had told him we were prepared to buy all the rubber we could possibly get. Mr. Acheson said we were looking into the matter very carefully with Larsen and Small. He pointed out that if it is known we are willing to buy rubber at any price, it simply means we don't get any rubber at all because rubber available now will be withdrawn from the market to be held for a rise in price.
S:Bevans:dhm
January 9, 1951
Memorandum of Telephone Conversation
Secretary Sawyer called the Secretary following up their earlier conversation regarding the drugs off loaded in India. Secretary Sawyer said he had talked with Fleming about the matter and found that the original information came from the Consul in Hong Kong. He said he learned that now the Bank of China is having difficulty in getting any boat to take the material and it is not being moved. In other words, no boat is waiting to take it off.
The Secretary inquired where the goods are now and Mr. Sawyer told him they are in Bombay.
The Secretary said he would have a request sent to the Consul to keep an eye on them.
L.D.B
S:DHM