800.6354/202: Telegram
The Chargé in the United Kingdom (Johnson) to the Secretary of State
[Received February 20—6:15 p.m.]
428. The Embassy has had an informal talk with both the Colonial Office and with the Chairman of the International Tin Committee regarding the outlook. Todd46 sent a copy to the Embassy of his [Page 289] telegram of February 9 to Campbell47 in which he advocated the maintenance of the present quota for the second quarter.
There is absolutely no chance of the Committee taking such action. During January the Dutch became so concerned at the manner in which world stocks would increase at present production level that they asked Campbell to call a special meeting to retroactively reduce the quota to 90%. Campbell refused. According to Campbell they are now talking about a quota for the second quarter below estimated consumption for that quarter. Patino48 has sent a telegram to Campbell advocating “drastic reduction” of the quota for the second quarter.
The statistical position as now seen by the Colonial Office is that at the present rate world stocks are increasing by about 5,000 tons a month and will continue to do so until May. The Colonial Office estimates current world consumption at between 15,000 and 15,500 tons, of which American consumption accounts for between 6,000 and 6,500 tons and world production at about 21,000 tons. World stocks at the end of the year were estimated at 50,000 tons and are therefore expected to be about 70,000 tons in May. Both Campbell and the Colonial Office feel that a quota of 70% would about balance consumption and production but that the situation would be different from that of last September due to the subsequent increase in stocks. Incidentally China is supposed to have 4,000 tons for which export licenses have recently been authorized but it is a matter of doubt as to whether these will move to world markets or be acquired by Russia.
In the course of these informal conversations the Embassy has pointed out the danger in view of possible war developments of a new fear psychology arising which might reproduce, though to a lesser extent, the panic buying of last autumn and that the presence of a buffer stock pool without any tin would permit of a quota decision on the liberal side. The situation is obviously somewhat fluid and two unknowns are (a) the course of American business activity and (b) the course of American consumers buying particularly as affected by a war psychology.
The meeting is scheduled for February 26 and information on the above points and guidance as to the Embassy’s attitude would be appreciated.
The Colonial Office and the Metal Controller49 are both at this time inclined to favor a slightly higher quota than Campbell or apparently the Dutch, and the Colonial Office informally stated that any efforts we might care to make at The Hague would no doubt be helpful. At [Page 290] the same time the Colonial Office also referred to the Dutch attitude towards rubber as reported in my 423, February 20, 4 p.m.50
- William B. Todd, representative of the Steel Export Association of America, resident in London.↩
- Sir John Campbell, Chairman of the International Tin Regulation Committee; also Chairman of the International Rubber Regulation Committee.↩
- Antenor Patiño, member of the Bolivian delegation on the International Tin Regulation Committee.↩
- Capt. Oliver Lyttleton, British Controller of Non-Ferrous Metals, 1939–40; President of the British Board of Trade, 1940–41.↩
- Ante, p. 266.↩