180 FOREIGN RELATIONS, 1942, VOLUME VI

rubber production. The Brazilian and Peruvian agreements provide
for such change in the price at end of the first 2 years as is mutually
agreed upon as appropriate by reason of changed circumstances affect-
ing the world price of rubber. Such a provision in the Colombian
agreement would be satisfactory, but a fixed price for the 5 year pe-
riod is preferred. There are real advantages to Colombia in having
the price fixed for 5 years; if, for instance the war should end in 2
years, Colombia would nevertheless have a market for its rubber at
this price regardless of what other sources of rubber should then be
available, such as Far Eastern or synthetic rubber. However, Rub-
ber Reserve would not be inclined to take a firm stand on the point
if it is considered important by the Colombian Government.

2d. While under ordinary circumstances this Government would
consider with the greatest sympathy the construction of a tire plant
in Colombia, such a project is impossible at the present time. In
many of the American republics such projects have been put forward
and the policy of the Department has been uniformly against them
except in the case of Peru where special considerations were believed
to exist. In spite of the fact that it is stated by proponents of these
plants that second-hand machinery will be used, investigation reveals
that some new equipment is generally required which is of the tightest
priority. Moreover, it is difficult if not impossible to be assured that
such plants will be as efficient in limiting the amount of crude rubber
used in manufacture or in adopting other conservation methods as is
the case here.

This does not mean that there is any failure to recognize the desir-
ability of saving shipping space and risks involved in the delivery of
crude rubber to this country and sending tires back to the producing
country, or to recognize the necessity for satisfying Colombia’s essen-
tial requirements for rubber products. The Department’s circular
telegram of May 18 sets forth this Government’s attitude in this
respect.

The Department is engaged in obtaining complete information on
rubber manufacturing capacity in Central and South America. Until
and unless this investigation establishes that there now exists insuf-
ficient capacity for supplying essential requirements in these countries,
and taking into consideration the factors referred to above, the Depart-
ment will not favor any additional construction or expansion of exist-
ing facilities in Central or South America. It is repeated, that this
Government will, however, endeavor to satisfy Colombia’s indispen-
sable requirements for rubber products.

3d. The information available here indicates that Colombia’s in-
dispensable requirements are between 500 to 1,000 tons per annum,