FOREIGN RELATIONS, 1942, VOLUME VI



our uniform price. If suggestion meets your approval I can present
it to bank next week. [Apodaca.]
                                                          ScoTr=N


811.20 Defense (M) /8377: Alrgram
The Ambassador in Panama (Wilson) to the Secretary of State

                               PANAMA, August 14, 1942-6 p. m.
                               [Received August 18-12: 30 p. mi.]
  A-131. My 800, July 23, 4 p. m.91 A last minute hitch has arisen
in connection with negotiations for rubber agreement which is most
unfortunate. Apodaca has been here twice on this matter, seeking
to find a compromise on the question of price to be paid by Reserve.
Two feasible formulas were submitted by him to Reserve for clear-
ance both of which we had reason to believe would be acceptable to
Panama. This presumably had settled the last remaining point of
difference and we were hoping to arrange this afternoon for signa-
ture of agreement. In telephone conversation however which Apo-
daca has just had with Bicknell latter insisted that the bank must
not pay a higher price than 33 cents internally for rubber purchased
within the Republic of Panama. This is a complete surprise to us,
since our telegram no. 707, June 27, 11 a. m.91 stated specifically
that the plan of the bank was to pay rubber producers a price suffi-
ciently attractive to stimulate production, the bank paying difference
between 33 cents received from Rubber Reserve and any higher price
paid producers by bank, this difference to be absorbed by Govern-
ment and recovered from price paid by purchaser for rubber tires
and products. The Embassy's telegram No. 756, July 6, 8 p. m.
referred specifically to No. 707, June 27 and in answer thereto the
Department in its telegram No. 694, July 21, 10 p. m. stated that
draft was satisfactory subject to two points which made no reference
to question of internal price.92 Furthermore, Apodaca wrote Bick-
nell from Panama on July 30 explaining in detail the plan of the
bank to pay to producers an initial price of 40 cents per pound and
to make up the difference by charging higher prices on finished
rubber goods. Rubber Reserve presumably after receiving foregoing
letter replied to Apodaca at San Jose in Department's No. 334,
August 10, 11 p.m.91 raising no question regarding this matter of
differential as regards internal price.
  91 Not printed.
  92 Telegram No. 694 not printed; the Rubber Reserve Company wanted to
institute controls over rubber export and to absorb loading charges and export
taxes (811.20 Defense (M) /7651).



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