892.51/230: Telegram
The Minister in Thailand ( Grant ) to the Secretary of State
[Received 3:15 p.m.]
356. My telegram 330, July 3 [4], 2 p.m. [7 a.m.], section 2 and 353, July 17, 9 p.m. My recent conversation with the Prime Minister in which cordial references were made to the great friendship for Great Britain and the United States has not resulted in any modification of my judgment to the effect that the wisdom of the extension of a loan to Thailand as proposed by the British and accepted in principle by my Government is doubtful. In the last analysis I am of the opinion that our position here will be the same whether we raise 50 million or nothing at all. The present government is playing the old game of courting all comers who have benefits to offer and unquestionably the Japanese have the inside track at the present moment and will retain it unless they are blocked, not from within Thailand but from without, by the military power of the United States and Great Britain. I do not believe we can block this movement which envisages the ultimate control of Thailand [with?] any sops thrown in the lap of the Thai régime.
Furthermore I am of the opinion that there is a very good understanding between the Japanese and the present Thai Prime Minister to the effect that Thailand will receive ultimately through collaboration with Japan the additional territory in Indo-China which she covets, namely, the province of Laos and the remainder of Cambodia. I refer the Department to the statement of the Prime Minister which was quoted in my telegram 353 to the effect that Japan has promised Thailand not to interfere with these provinces in any further extension of Japanese control of Indo-China. As I have pointed out in telegrams I anticipate that when the Japanese extend their military and political control of Indo-China which now appears to be imminent the Thai will be invited to extend their control of Laos and the remainder of Cambodia and the Prime Minister will accept the offer as readily as he accepted the offer of Japanese “mediation” definitely without even first consulting his Cabinet. Luang Pibul, a military leader, is a very ambiguous [ambitious?] man and I am of the opinion that in the last analysis any qualms that he may have regarding Japanese motives and objectives will be subordinated to his ambition to establish himself as the founder of modern greater Thailand. It seems to me that any exceptional favor to Thailand such as the loan is likely to place us in the category of aiding an aggressor which is directly contrary to our policy.
[Page 220]I am heartily in favor of any plan to loosen the commercial log jam as it affects our exports with Thailand which has resulted from our export license system especially in view of the existence of a friendly market here for all sorts of American goods which now appears to be capable of considerable expansion as the result of the situation growing out of the war. I favor letting the Thai have everything they need for internal consumption except for war purposes as far as possible pursuant to our own absolute defense requirements. The Thai like American products. In order to advance this point I would recommend the assignment here at the earliest possible moment of a first class Commercial Attaché and an assistant who could devote their full time to the development of this market for American goods.