It is possible that the plant would be operated by a Colombian
Government agency.
  In this connection as reported in my despatch 4143 of April 30 5
Minister of Economy has informed Embassy that a number of Ameri-
can tire companies have been discussing with authorities possible
establishment of a plant.
  I would appreciate instructions if possible by noon, May 7.
                                                            LANE


811.20 Defense (M) Colombia/65a: Telegram
  The Secretary of State to the Ambas8ador in Colombia (Lane)

                                WASHINGTON, May 5,1942-8 p. m.
  514. Your 588, of April [May] 2.  The procedure suggested with
respect to No. 2 is approved. The Department suggests that you
make very clear to the President the urgency of our Government's
obtaining Colombia's exportable rubber. Favorable arrangements
along the lines of the offer made to Colombia have now been entered
into with Brazil, Peru and Nicaragua, and an agreement in principle
has been reached with Ecuador and Costa Rica. The price in all
these agreements has been based upon the price agreed upon with
Brazil of 39,0 f.o.b. Belem for Upriver Acre Fine on a washed and
dried basis with appropriate differentials for other types and grades.
The offer made to Colombia is for the quality understood to be the
most common in Colombia; any other types and grades would be
purchased at differentials based upon past usage. In addition Rubber
Reserve is prepared to expend up to $500,000 for increasing amount
and improving quality of wild rubber produced in Colombia.
  It is contemplated that the agreement would provide for the export
to this country of all rubber not required for essential needs and that
essential needs would be determined on the basis of use of rubber
products in this country, and the amount needed would be specified.
This Government also desires to obtain from Colombia an agreement
to sell to us all exports of manufactured products. Both of these
points are considered very important here, and represent a practical
carrying out of Resolution II of the Rio conference. It is suggested
that you explore with the President the possibility of an embargo on
rubber contracts and rubber exports pending the negotiations.

M Not printed.
57 Not printed; in this telegram Ambassador Lane proposed that in his coming
interview with the President of Colombia, he concentrate on the proposed
rub-
ber agreement (810.20 Defense/2585).



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