Office of the Historian

800.6354/113a: Telegram

The Secretary of State to the Ambassador in the United Kingdom (Kennedy)

Washington, March 4, 1939—1 p.m.

163. An instruction, with reference to the proposed oral discussions regarding tin, was dispatched by open mail March 2.71 The following is a summary of the points covered:

A. Available supplies of tin.

1.
Stocks immediately available to the market should not be allowed to fall below 25,000 to 30,000 tons plus (underline plus) a buffer stock of 15,000 tons or more.
2.
In addition to such market stocks, reserve stocks of tin or tin ore should be held in producing countries capable of supplying unusual demand for 2 or 3 months while production at the mines is stepped up.
3.
Consideration should be given to a modification of the quota system so that in time of rapidly increasing demand larger rates of release would be provided without delay for those producers able to expand production rapidly.

B. Prices.

1.
Full data regarding costs of production should be provided through the International Committee.
2.
Available data indicates that £200 per ton is an adequate maximum price in times of active demand. A price of £150 per ton should bring out adequate supplies of tin in periods of slack demand, with a reasonable return to the producers, and the buffer pool should not enter the market for purchases at a price above £170.

C. Consumer representation.

1. The representation of the principal consuming countries on the existing Advisory Panel should be strengthened.

The following points should be added to the mail instruction of March 2:

Following A. 1. For the buffer stock to serve the purpose of a reserve supply immediately available to the market, it is essential that it should be held near the principal consuming markets. It seems logical, therefore, that at least one half of this supply should be stored in the United States.

A. 4. Even these provisions for meeting all probable requirements without delay would prove inadequate in the event that shipping [Page 913] services should be interrupted. In view of the unsettled international situation, the suggestions under 1. above should be pressed strongly, but in addition the United States must give consideration to the position which it would face, with only a few weeks’ supply of tin on hand, in the event that supplies from abroad should be cut off or restricted.

Hull
  1. Instruction No. 535, not printed.↩