ILLEGAL RICE DEALS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R003700520004-4
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 3
• Document Creation Date: November 16, 2016
• Document Release Date: May 10, 2000
• Sequence Number: 4
• Publication Date: November 23, 1949
• Content Type: REPORT

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Approved For Releortol Rip/CMMLtM1 P `57R0037OUf 4-4C-
INFOR ATION REPORT
CO,;NTRY Thailand/Philippines/}3u as
SUBJECT Illegal Pace Deals
PLACE 25X1X
ACQUIi;ED ~
DATE OF INFO.
CONFIDENTIAL
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SOURCE
CD NO.
DATE DISTR. 23 NOV 49
NO. OF PAGES 3 E~
NO. OF ENCL.S.
RUSTED BELOW)
SUPPLEMENT TO
REPORT NO.
THIS IS UNEVALUATED INFORMATION
1, After the war the International Emergency Food Commission (IZFC) was
established to ration rice so that all needy countries would receive a
fair shares, The IEFC, however, vas controlled by Great Britain and
her esatollits" countries and most of the allocations went to countries
within the British sphere of influence. Because of this system of
allocation, the Philippines never received enough rice. Therefore.
they instructed Philippine Ambassador :l:zalde, in :'ashington, to pur-
chase American rice. f llizaldo quoted high prices to tanila. I.Sanil.a
accepted those quotationss and F,Iizalde bought the rice at C1O to 315
a ton bclovw these prices and retained the difference.
Finally, friends of President Papidio Quirino instructed P.arvin Gray of
Pan Commercial Ltd., 25 Vanderbilt Avenue, Now York* to submit rice
quotations to the Philippine Government. Gray's quotations wore 315 to
L-: TIAL/9 ' TROL - U. S. OFFICIALS U!i LY
020 a ton less than Elizaldo's prices, thus arousing suspicion in
t::anila concerning tslizalde's handling of rice purchases. Llizalde was
ordered to accept competitive bids. Gray gave Elizalde a quotation of
3169 a ton. liowevor, Elizaldo closed a deal with his own broker for
$168.50 a ton. This vrus the first time r:anila had purchased rice so
cheaply. It is felt that if Quirino is re--elected, Blizalde rri ll be
replaced as Ambassador to the United States.
3? Gray was e3ced by -Philippine representatives in the United Ctmtes to go
to the Far Bast to try to secure rice from Burma or Thailand, The
National rice and Corn Corporation (MIZIC)D the official Philippine
Government rice purchasing organization, had become so corrupt that
r'uirino wished to break its monopoly. Furtherrzorc, L~uirino wished to
have cheaper rice to distribute before the November 19) 9 elections.
14, Gray spent a wreak in India whore he visited Calcutta and Qiittagong.
lie then wont to Burma, where he stayed three weeks in M. noon. iihile
in Burma, Gray VIELE able to secure a supply of Burmese rice, but his
colleagues in I5.nila did riot feel that the Burmese Government was stable
enough to be a pc.rty to a long Corm rice shipping contract.
5. Next Gray visited Bangkok and was introduced to Willis H. Bird,* who
contacted Ke.ch Songlran. Bird informed Gray that he could obtain
several thousand tons of 15 to 25 percent broken rice on condition that
Next R%gp p , Fpio elease 2000/ 6/08 : CIA-RDP82-00457R00370Q51000a44
Archivist of the United States. Da
f
letter o
Director of Central intelligence to the A,
This document Is hereby regraded to
CONFIDENTIAL in accordance with the
16 October 1978 from the
 Approved For Release 2000/06/08 : CIA-RDP82-00457R003700520004-4
CONFIDENTIAL
COI iW'IL); ;I: TILL/CONTIh)L - U. E. OFi I CIALS u 'LY
Cl 1TTFAL II:T".LLIG%' . AG:JNCY 25X1A
2
Gray first purchase 1,700 tons of 5 percent broken rice for $150 per ton,
which was a very reasonable price. This was obviously an illegal deal, but
trusting Bird, Gray returned to Manila and opened a letter of credit for
6.350oOOO in the Charter Bank.** ':hen Gray returned to Bangkok, he dis-
covered that not only was the deal illegal, but that the rice was un-
obtainable at the quoted price. He iranediately broke off negotiations with
Bird. A new sories of rice negotiations involving many Thai and Europeans
erere begun. Most rice brokers did not wish to sell a quantity as small as
1,700 tons and attempted to work this amount in with larger deals involving
from 5,000 to 140,000 tons of rice**** First, however, the letter
'aofacredit
had to be switched to the Union Bank****
presence of British intelligence agents in a British bank.
I5ackground Information on Rice Deals
60 Some of the nations which had rice allocations wore not able to pay for their
full monthly quotas and offered it to outside buyers. China was the first
country to offer 40,000 tons of rice for sale. Countless brokers tried to
peddle this supply in Bangkok. Then England offered some of its allocation.
Yost of the surplus rice sold for pounds in the past few months came from
:British allocations. The following countries also sold rice to outside
buyers a
Portugal
P. U. Ramos,***** Consul-General,
agent;
India Indian Legation, agent;
Indonesia Isak Mahdi, agent;
Austria Stein, Austrian representative.
ugon-t;
British Zone of Germany British Food and Agriculture
organization (FAO) representative
acted as agent for Taylor, VEX
representative.
All the above embassies and consulates must know about those deals since.
they would have to issue consular invoices for shipnontsa The following
is a specific eso pie of the disposition of an IE'FC allocation:
Hong Kong is allotted 80,000 tons of rice for one. month and the
Philippines is allotted 36,000 tons******. The British buy their rice
from the Thai Government at the official rate and then resell the rice
from Hong Kong to the Philippines at double the purchase price. The same
deal would apply to the Cingapore allocations, but to a much lesser degree,
since Llalaya needed the rice. In turn, NARIG would collect their commission
for handling the rice for the Philippine Government.
25X1X
d
25X1A
Comment.
,
For previous information on Bir
25X1A
an
25X1X
Comment,
probably the Chartered Bank of India, Australia
a r -C a
WNFID ;IN`I'IAL/oDI1TI20L -- U. S. OFFICIALS OIILY
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C JNF1DLI; TIAL/Cu! T 1 t;L - U. S. (411- I 1 IAIS UI3LY
3 w
25X1X
* Cornent. No further information is currently available on the
status `vise nootiations.
#+~ Conriont. Probably the Union Bank of Bangkok.
I'or
Comment. Jose de Ramos is listed as Chancellor of the
Commnta The Hong Kong allotment is grossly out of
propor 'Zoe 25X1A
Coaltents 0
for furthor information
on ets r ce deals.
LUTIFIDI ITIAIy/CQI3 tll7L - U. S. vFFICIALS JATLY
Approved For Release 2000/06/08 CIA-RDP82-00457R003700520004-4