UNITED STATES SECURITY INTEREST IN RECENT DEVELOPMENTS AFFECTING THE SUPPLY OF RUBBER, WITH PARTICULAR REFERENCE TO SOUTHEAST ASIA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78-01617A003700080008-5
• Release Decision: RIFPUB
• Original Classification: S
• Document Page Count: 14
• Document Creation Date: December 27, 2016
• Document Release Date: April 10, 2013
• Sequence Number: 8
• Publication Date: January 12, 1950
• Content Type: REPORT

Declassified and Approved For Release 2013/04/10 :CIA-RDP78-01617A003700080008-5
G~~TRftJ~ Iid`~:?,LI,.~.Crk;i10E A~S~;~It;T~ ~,? ~a:-,t i~~~
TI~IT?:D STAb~S S?;CZY.~IT~' ~I2~~.'ET~?aST IP: 7~'~~~~IX?~ Il'.u~'E~Pi~"~~'S
AF'r'3;CTING THL SU~'I':GY OF 3~UIi~~f{~ 1tiI'TA I?AIi'7'TiCUl,Ps.~i .F, u~ ::.',I~~~, T~? SQF~
EAST A~BIA
Strate~~,~: ~moost~a o:~ ~.ubt~ n
dubber 3c oae of the mosf; ~trata~zc commodit~.e~ for the cend~.ct
of ~. mayor vrmra h'hen the ~'ananose cut off ~Jnit6ci Sta.t~s ~.~ports of
na.ti~al rsbbber ~'rou~ Sor~thea~t .~~sia, the. scsurce of moat of am s~~g~:i~.ea
of tlZat~ cnn~raorl~ty~Q f.t becerae nec?~?a.+?~ for the ~ 'co bt;..~.ld a h~~
s~nthet2c rrosbber inclvatr~. ~'ont2n~aed ~sa.~.xate~a~:s~.ce oi' sgnthmtic :~~bber~
produc$r~ ?:apa.cit~ ~Se essential to US s~ee~~.tG ac ~c~ a~ the
ISOSS~bllits re~xa.ins that accc;sa Le the no.tural tubber cf' Southeaat Asia,
mad a~aa,a be cut of~'4 Since rubber ;prorlttctr~ t~ti:~~, pre~arat ~acYas o:~
s~~thatic renuirc~~, oze the a~Ted'agea abo~~.t 2~ percent of thc~?r coxzt,ent to
b~ naturFa.l rtxbber tco a~snz'e ~;cosi nual.a.ti~ ~hcc:v5r--.~,ut~ truck eat. bx~
tir~$ p,~ticul~~rl~ require a. rx3~a p~;rcez~t~e of z~~tu~?a:~ rubbor~ ~.
acleq,~aate atockpil3 of natural lubber a~.so is ess~:tt~a.$ to n~ Clonal.
~?it;~o Tr'uxthe~zor~a~ ztot only because of the 3r~pob t~ce of thy.
procluc~~s de~r~.ving from thlz~ ax ea and the cc~htr~.'brst3on a~' tYaP ~011~~ rem
tarn from them to ~es~%er~. I~uzsope bast alao bee~xuse of the st:~ate~ic
~.dcatY.on bf Sot~tt22east 6~.s'i2L;. the estab3.s.shr.:Fnt off' po1:~t3c~Y. 2d1L~ econ*~m~.c
stabll~.t~ is~ this arer= is of ser3.our~ concern to ~S sc~c~r3~t;~o
Document No.
NO CHAPdGE in Class. []
D:~CL?ASSIFIED
rise C 3P."1GPD T0: TS S
D^A r'e~o , 4 Apr 77
Auth: ;?'lid' ~~ -'=~ "7l17f3
Date : ~- ~"~ ~ -~ ! -
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1i z '-';~
~~~h~x
~PO~~ZI~i ?f88~@~'a'tYr~8~2'b u~tvh2$YC Y'U.bbO~ Cc`~.~3a.~~.~d:Y i9 ~.ecf~~~e t~
p~o~3dc ~earl~ ?IO ~arce~~ off' et~r~n~ `?~ ~.~.~ co~st~io~ o~ new x~u'buero
`~hc H~bbo~ Act of Ig~$~ c~ha.~a e~oi~es 30 ~~~s Igo., ~eq~.ree Qha.:;
6b~9000 Z?x~~ ~?~$ o~ ~h~~ ,~.~C3?e~i.c ~bbe~^ c~oi~~ be ~al~~c.i~ed ~.~
~~i~e or ~~~db~ co3tdi$iQY~ P,13rd 'G%12~ ~?~es? ~~cilx~cies sh~.3~. t3~c~dt~ee ~~DL
loge ~~.~"~oa~~h%~d o~ L~texr r~.'?ied gssc~dsc~io~a. c~pe~~.'~3eeF ~.e g~
~'~~h~ g~rovides alloca~;~.o~ cud specii'YCaf;io~ c~aa:~ao~.a~ ~t~er rich
r~sa~ions Y~see i~ee~a p~'o~t~a.'tec~. ~??gsairgs~g ~ha~ the ~i~ac~a~;o~~
prod~.ctioza oi' -;~~!a~~hei~ie ~?ta'~ber be co~sed ~a ohm rs~?~a~~r;;~~~e c~i'
p~oduc~~ used ia~ ~h? ~~~..~sporta~ies~ ~ialdo x~ she IIr~i~esi ~~~es~,~,
~3ai~ed Rim~idc3~~~a~~ co~~ers~s~for~~ ai' Sep e~be~ 19~~~ ~h~; JS a.~ eed
~o ix~czeose the cas~et:~ta~e ~e^ for n~.~~~ 3. ~za'bbe~~ ~d ~co~c~i~~`l~
mo~.iiied these ~e~a~~.o~.s sa ~ ~o ~e~it ~ es~ir~e.~ed ~a~OQf~ ~o~s a^
aaa~~^~ r~b"~er fifl raplze?a ~.3~~s ~a~} off' ~~~~he~3c r~bbes i~ 19~a~
x~ acidi~io~. ~c~ ~.~,t~04 ~a~.s pe~i~~e~. '~~; chins ;rude ~.~ ~~~e ~~~?~.
coa~sp~3os~ oi' svza~he~rrc ~~abbe~. is ce~nsidQ~a~el~* hi~~Q~ ~he~ ~hc~
~:a~d~~o~~ ~eq~3s~e~e~~~s, ~z~d iatc3~.~tes su~~~~~iza~ volv~~~:.~~ cesaas~p~iaa~
i~ the T3?~~--~3"B:~S~;~3t3s ta~~.a~. ~'~.e1.d~ ~h 3~dfc~,-~i~g p~e~ exe:~S:2 ~o~ r~.-~~~e
~~.~~~~ ~~ S~1 c?~, Ste? ~~~~ ~.5~ i~, ~~i~f EC~.~.~~ S~~i:.Li ~4i~ ~~~.~~f~'t~-. ~id~.~s'5.k~~'S~y~i~~ ~S ~.r:.4~'~
~t~b~ffi~~ A.xt ~.~~ea~~e~.e~ cmint~~t~ee ~:~ g~rep2~m~ ~ecoe~~~iar~s ~o~
Ae~islF~ita~a ~o ex~e~d ~Ya.o s~fhe`i: s~bbe~ p~o~^m '~e~o~.c~ 30 ~e Ig5`~~
?~hes? rec?~trlend~~;io?~s t~3i13 cc~~e~ s~.Ic~ og l~,~se cai' ;he ~ove:~x~~~~~
~~si;he~i~c ~~.bber p~.~r~~~s end. ~a~n~~ pso~.c.c~;~.e~~ ar~d car~~~io~ o~'
~~x~he~ac ~?;~b'ae~? c l~. ~c~~~~.z ~.vi~g aka sec?~a~eiac~~ ~ia~~ she cor~.~ ~ee~ ~:i~.~.
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give ~a~s3darat~.on to the rel.abdo.f~~e~Y a{~thet~.c rubber p~a~~,etio~.
sari eons~ption to na$fo~l sec~~~.tyx i~.c~.griing t2se ec?no~n~.c a~
political. eYf acts oY the pragr~~ iai St~utaeaat A~i~
'i'~xe reaez~t7.~ de~'c~~.og?d "cra3c~." sgnthctic r~bb~r, t3hich ~ s cr3~afx~
iato Ft~,l. production nth rated annuR~.,2 praduct~ve capaci$~ oY 20t3t3Q~
7.ong t?~, is elegy. to give ~0 percent ~ea.$e.~? mi? sage in naaso~er
car '~irPa than natures rnbber~ Some authoTi v~.e~ aW a oY the apiaio~
$I1~.$ ^.S ~.t~ C09$ ?~ prod~rc$?.o~a 't3 i'ad~e+d F93bc$ i$9 quat~.t~ ~.,_, ~o9'@t~g
~co3d" rubber s~il.l subetantia~.iy repiace z~a$t~ra3 Dubber in tr:~.~a~?s?rtat3on
uses in tha nagt tea ~Qa~se ~ ~t~h a development ~'or.~.~. be h~,gh~ u~
Favorable to ~tatura3. rubbers as abo~.t ~! pe~;~oer3t ?a ~ite~. Sta.~ces
cox~s~gt~.an of new ~bbar is in the $aausportat~.on. ife3.do 0$hers
maintain that co~si?iering thQ ever~gbo~ing uses of ~zbber9 a?ns~ption
oY awtura:. rubber nevertheless ri31 ~~, be z~edviced despite ~$s ct9~?
placement is the pasaertgexmcar bite Field
t~ Stoc~si~c~ chas~;s.
~(,~ ~,~,~a prESent Gfluer~eza$ stoek~~tle of ~tura3. rrAab'bar a'n?~ts to
8.b@S21$ `~'~Qg~~~ 110~~s ? f~ tsr ~.6. ap'~i~iFJL~~~ y,. .~~nL ~I~r~Q~y b b~e ~' ^ab~~~s7. ~~J ~~~. Vb~s~
iJ Yap~~~ C~.tJ ~LS~ ~r 40-i ~rii ~1 i C~~`". D3. \i~bi. wp9 id..L'~4iSi u~ o~ EGC]~&i~d. C~+ al'Kb Vp1s 6 +ti~b~
current stee~epii.e om~QCti.v? is 6taosOQQ 4:ons~ but ~ a resv~.t oY tr-~e ~t~~e
~~Canwdi~ eoneer~atiQAS the ~ has agreed to gists etsr~.siries'at~.?n to .
~X2GR@~S:i~g this ~~.G ~{iu~?T~,iCAfi p~L~'~12aW@L3, $@a'13~1t)?a~'X~~t s~RSpGa~td@r3 ~s:.
the firs: ha1.fi off' 19~ because og oxhaust3on off' F4~.s are ~~r (~'~~.sca~.
154) retas~dQd b~ applf.eatioa of sfioct~pile f~4~~.s te~ :p~~eb.~se of other
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sta~ateg~.c ~ater~.a~.s cif rrlh~.ch a lorre?~ ~ere+~nta~e of tihe ~oa3. ha,, b?en
acc~uirc~e 5a~e ac~.ei3.siL~.on~, 1aaw~e~er,, are being made ttArcrv~i ua~e use
?F ACA cotantexpast Sundno
I t e Y thy, $~ is Ru'~b .. I tr t S uth-t Aoiaa
~ n^tural rubber ~aadustr~ is hi~a].~ im~em$a31'(; to the ece~~~.es
of Southeas d As~.as arh~.ch area prad.~aces oe~ 90 here?nt ~? urar~.d outer
put, IW~a~ye. ,and T~.o~.eaia psaa.one IsrvaiaeQ three~gYravrtha cif the ~s~rl,cig
t~DpUC'~yO g~B.bIIyP~i:.i. gT~L{2b~?E'A~~.~ tLLG"~yIR?~,}t, $~O7.~f~i`~~ f~yAby~.`~d-1'~C~iS~g''gLU.Il~~,~"iS~.YLT.I~'r~~~.ES~y
~l tZLF) $ 6r ~.r 13~.g iJl~~i ~~ ~~~ V~tuti f.~ (f~~ir (f~~'~'li '~,..Ld ~~ Vli{~i ~eS.L~o~$ ~.4
FlaZt~ysus r~~oxts and. about one?~third of I~o~as".a?s~ I~a~es`~nents i~a
'the rubber isidt~tsies o~ the tyro areas total ab?ut 1~ s2s's?'? iasa da32ars~
l~zaring acad. after the wary ho~te~~x, eQns~idc~"ab1Q damage eras i~licted
an rvtbb~,r ?tands and ~rodu; faei~.xtfes ita ~ala~a atad to a Zesser
e~deat xYa TndO~seslap ~olZo~xng Oche s~rancl~, add~.tiana3. des?tae re?
su3.ted from d~redations b~ bandits and ~ewrilia~ i~z ~~a3~a~a, and b,~
cegta3n Rep~,,bli~ e3e3-ents iaa Ixadrnes~.ae ?.~e c?st of reha:~~.'Z~.ta,t3~on
has beeaa heae~ and tL~e ~rc9~?k is taut ent~.reZ~ a?~2eted.
~~a3.a,~sAg ~resezst leaciershi~ a$ the :ta~~,est producax~ of zawts~?~.~.
rubber X11 declius ?ver thQ new Yew dears c~.~ ~.ts older try?s bee?~e less
prr~duct~.se and as produGt:ic~zt Yroa~ ~ou~er and higher?~~3eld gees
increases is ?ther areas, ~?t~x'tic~2arly Indonesaaa About ~i ~r ? ~*ears
azrQ resgu~.red For a a~.bb~ tree to came rota be~xno~ aF-.d onZ~ a s~alZ
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~S~RET
pcartion o~ ~al~ya?e rLbbaT acre~e has bee7s, replanted vr~.th h3g~. .
3~ieltli.ng ~strainee
~~he rnbber~produciag intarssta in SQUtfhsast gaga attr~.~ute a~t~h
of their d3~"~cultles to tho US po3.ic~ o~ r~sxuLatas~ coas~tioa~ cf
specifi~? gt~atttitics ?g synth?tfc rt~bberti Ac a rQSUIt~ soma i.31~~r3~,1
toter-nd the i75 leas 'bey arouseii i.n that area.
A3thougia. d~e~ud Por natural r~bbEr has excsE~ied the sup?~lg a3.racm
the and t~~ the 'parr ther~a is a proiiskaxlity tha,v t:~thin the ns~~
decade ~ s~l~ will ar3nep Tb.$s is bayed on the assu~nt~.ox- that vhe
outcome a~ the 3n3~anesia~a a*ad Zndmchines~ $itu~^.tio~ will be pcac~f'u~.fl
that the ~xa3a~ran outig~.d w$ll c~antisrae to be a~aalaL~.e~, and that
synthctie rubber will mane ~tu?t2~er a~cadg into the CIS ~ar~ta
c / a
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SI?C~T
Pra.cas and Coats of ~'3~ductio:~
The doZl.ar price oSc nt~tural z?ubbgx? a.s Aio~r at agproxi,ma.ta~,y tfz~
sari 1?~~. as ~ ].939 d~spitc~ much hi~har ~a~;e ~~d other c;~ats o.f
production ~d a gaxtc~ra~. lc~ve~. of pr3.ces ~.uch above9 %hA pre~rar
~.ave~,4 Tk~? px'incipa], cause oi' ttias diy~rgnnt ta^axzd of the r~atura~}
rugbar px2cQ fx'oa that of mast other comanoelitias sir~ca pra~-ar
years is the production a;~d utilization of synthestic rubber o~x a
large scal,cs~ Zxa the abscrtce oi' s;~nthetic x?~abber production, supp~.i?s
oi' nature.]. x?ubber ~'v'oU1.C1 have bean ext~a~1~ short (relative to
demand at pri.cas in the curx?ent rara~a~ asztta the consequence thmt
natural rubt~e;r prices eroc~ld klave: teen u~s~ much hi~har,
~latux?~al ru8bax~ prices x?acoz:v~ed by producers d~arinK the f~a~;
thx~e~quarta.rs of 1.99 wens At a level wr;i.ch, coup~.c~d ~!tith dacli.nixz~
sa~.as to US ~nt~z?ketsF tended 4~o produce acono~i.c hardshigs and cone
sequant~ tb ag~;x~svata ;~olxt~ca~. 3.I.sLabi.li.t~r, in they ~~zb~aar grospQxzty of tk!~ natural x?ubbe~.r ~.z'tdusLry and
the rx~turn frogs rFZUh~r experts, ~2} a dec~.~.z~e azt the pr~c~ os rubbe~^
substantial~.y be? aw t?zat ~aovu abte~.niFig X113., other tk~~.ngs boring
~qum~.~, aggravate; 3nstaba.lxty a.n Moth areasQ v~?~,th the d?~>x~o of :~nr
staba.lity de~ae;~dent upon the c~a~*;aitude of tkae dscl~.a~ae
~?(;~1
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~opoe~ QR~
tTi~ITED S2',t~'E~ S~CLt~I~ F,k3~S?~ IN 1R~0..~' ~~Q~,Q~I~?S ~.;~ _
S~pL`~' Q~' ~ItB~~, t~3I'.~ p~R t a. ~i3~~11Ft ~ ~ I~G~ ~0 50~'.i~T .~~ 5~~~
~!. d~~in~ 3.n tuo~'3d dezaa~. for ~at~~ ~.~1s~r m~ ~elo~p the ~?~?e~.t
7.e~el tsb~d h~,~e nd~ersc~ Tepes~~.sca?s~e on tie econonic mad. po~.i~:ice3,
sitv~ti~n is e~'a .D to a I~ssa~? es~ter~4;, ?a~ tha$ of Inc~w~.~eYe., Sacra
dec3.i~ a~ota3d. res~.t@ for ?le, from ~ ~?.x~i~.?~ss recees~.o~. in tYae t~"S
or from ~ vt2dgspre~d ?ubstitatt~ox~ og i-'~pro~~,d ~otI~et~.e ~abber? each c~a
t~.e r~c~nt~' de~reloped cold proa;ees ape, f?r ~,t r