Office of the Historian

891.03/5–1051: Telegram

The Secretary of State to the Embassy in India

secret
priority
Washington, May 22, 1951—11 p. m.

1971. In view food grain experience urtel 3165 May 10 Dept reluctant recommend Ind aid program Cong without advance assurance PriMin sees need for US aid and willing accept on existing ECA terms and conditions. Summary those contained in ECA bilaterals with Southeast Asia countries follow:

1.
Commodities and services furnished wld be distributed on mutually agreed terms and conditions.
2.
GOI agree promote sound economic development and cooperate with other countries reduce barriers to international trade.
3.
GOI provide detailed info US deems necessary to determine scope and effectiveness operations under agreement.
4.
GOI receive special ECA aid mission and wld give facilities needed for observation and review execution assistance under agreement.
5.
GOI deposit in special acct up to amts commensurate with dollar costs of commodities, services and technical info granted. Local currency in this acct may be drawn for purposes of agreement as agreed by GOI in consultation with US.
6.
GOI wld cooperate by facilitating transfer material actually or potentially deficient in US, on reasonable terms, no less favorable than those given other countries.
7.
Full publicity.
8.
Upon GOI or US request, enter negotiations for agreement facilitate entry (including duty-free provision) and distribution US vountary, non-profit aid in Ind.

You shld urgently approach GOI ascertain PriMin attitude. You shld point out Dept not now in position indicate what additional terms and conditions Cong may insert in aid bill and not asking PriMin or GOI give advance commitment accept such unknown provisions.

Example is proposed Kem amendment1 which affects entire structure fon aid. This amendment to ECA supplemental appropriation wld require each aid recipient to certify that they ban exports all potential war materials to Commie areas. Such materials wld be identified on lists prepared by Secy Defense. Implications this amendment will obviously require careful study legislative and executive branches.

FYI only similar query sent Karachi. Pres message Cong re 1952 fon aid expected this week. Cong info booklet re areas of aid due go to press May 25. Wld appreciate response your approach GOI by that date. Results final decision re amt aid to be recommended Cong: Ind $65,000,000; Pak $12,500,000; Ceylon-Nepal-Afghan $700,000. Figures include technical assistance.

Acheson
  1. The Kem Amendment, Section 1302 of P.L. 45, Third Supplemental Appropriation Act of 1951, approved June 2, 1951 (65 Stat. 52), so-named after Senator James P. Kem of Missouri, provided for a ban on economic assistance to countries exporting strategic materials to Communist-bloc countries. Further documentation is scheduled for publication in volume I.↩