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                        HONDURAS
AGREEMENT BETWEEN THE RUBBER RESERVE COMPANY AND HON-
DURAS GRANTING THE COMPANY EXCLUSIVE PURCHASING RIGHT
TO ALL OF HONDURAS' EXPORTABLE RUBBER
811.20 Defense (M) /58491: Telegram
The Acting Secretary of State to the Minister in Hondura2 (Erwin)

                           WASHINGTON, March 19, 1942-2 p. m.
 74. Rubber Reserve Company is prepared to enter into commitment
with Honduran Government to purchase entire production of rubber
in Honduras except for an appropriate amount (to be agreed upon)
necessary for domestic consumption, at price of 35 cents per pound
c. &amp; f. United States Continental port for usual good quality Cas-
tilloa rubber as understood in New York, with appropriate differen-
tials for other grades. The term of the agreement would be for 5
years, price being subject to adjustment after 2 years by mutual agree-
ment if conditions change. The Government of Honduras would
agree to restrict export licenses to Rubber Reserve Company or its
nominees. The exportation of manufactured rubber, if any, would be
restricted to the United States. Honduras would agree to use its best
efforts to cause maximum amount of rubber to be produced and made
available for sale to Reserve. Local labor would be financed locally
for necessities for collecting rubber. Some Honduran governmental
agency might be designated as the single buying agency under the con-
tract, if this seemed best way of securing results; otherwise sales
would be made through usual trade channels now in existence. Price
on sales to Rubber Reserve would also be fixed as local sales price.
  Foregoing proposal corresponds generally to agreements entered
into with Brazilian Government on March 3.1
  For your information we understand certain other American re-
publics are negotiating to acquire rubber production in some Latin
American countries. Please consult immediately proper Honduran
authorities and request their prompt consideration of proposal.2 If
Honduran authorities agreeable in principle to sale of rubber to United
States, Rubber Reserve willing to enter into an agreement immediately
  1 See bracketed note and telegram No. 640, March 13, 7 p. m., to the Ambas-
sador in Brazil, vol. v, p. 692.
  'In his despatch No. 197f, April 17, 1942, the Minister in Honduras reported
that the Honduran Government had notified the Legation by note on April 14
that an Office charged with the buying and exportation of wild rubber had
been
established (811.20 Defense M/6231).
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