Foreign Relations of the United States: Diplomatic Papers, 1942, General; the British Commonwealth; the Far East, Volume I

845.24/41¼

Memorandum of Conversation, by Mr. W. Leonard Parker of the Division of Near Eastern Affairs

[Washington,] February 3, 1942.

Participants:	Mr. Milo Perkins, Executive Director, Board of Economic Warfare
	Mr. William T. Stone, Chief, British Empire Division, Board of Economic Warfare
	Louis H. Bean, British Empire Division, Board of Economic Warfare
	Mr. Finletter9
	Mr. Murray
	Mr. Alling
	Mr. Parker

In accordance with a directive of the President dated February 2, 1942, a meeting was held in the office of Mr. Milo Perkins, Executive Director of the Board of Economic Warfare, to consider what steps might be taken to send an American production mission to India to ascertain in what way India’s war production might be stimulated and to find out what is needed to enable India to attain self-sufficiency in the production of war materials.

Mr. Murray commenced the discussion by referring to the recent exchange of representatives between this Government and the Government of India. He stated that, from time to time, the Indian Agent General in Washington had furnished the Department with information regarding India’s war effort and deficiencies. He referred to a conversation with Mr. Berle, who had discussed with the President the matter of production in India in its relation to American production and shipping space on American ships. The point was made that, with sufficient equipment and materials, India could equip the manpower which it has and which is sorely needed. Mr. Murray gave Mr. Perkins copies of the file on the subject, which were left with him for examination there. Mr. Murray mentioned Mr. Henry Grady as a possible choice to head such a mission and stated that Mr. Grady had indicated that he would be available for this kind of a mission. There are impressive figures, Mr. Murray continued, given in statistics about Indian production. Apparently India is doing more than is realized. However, out of approximately 60,000 articles of use in the war, India can manufacture 85%. It would be desirable to find out a way to assist India in equipping itself to manufacture the remaining 15 %. Mr. Murray stated that, of course, it may not be easy to convince the British Government that India should be made self-sufficient in war production because of British fears of losing Indian markets after the war. However, the Department is going to endeavor to convince the British authorities.

Mr. Perkins inquired whether the Agent General has indicated the kind of help that India wants. Mr. Alling replied that the Agent General has stated that the chief need is for heavy machinery and machine tools.

Mr. Murray pointed out that making India self-sufficient would result in conservation of shipping space in that it would no longer be necessary to import raw materials from the Orient, process them in the United States and then re-export them to the Orient.

Mr. Perkins stated that he is sympathetic with the proposition. However, he was somewhat doubtful that it will be possible to accomplish all that has been suggested because the two big bottlenecks are machine tools and ships. He pointed out that when ships are launched they are not completed and ready for service. He continued by stating that we ought to get some more information from the Agent General and should (1) find out just exactly what India, wants and needs, and (2) the extent of cooperation an American mission would receive from the authorities in India.

Mr. Finletter suggested that we should look into the shipping situation and eliminate duplication in the carriage of goods. This study should be concerned with the relation of raw materials to finished materials. Mr. Perkins replied that such a study would appear to be one for his own organization.

Mr. Perkins pointed out that the United States needs all the machinery it can get in order to produce in accordance with the schedule recently announced by the President. In planning for such production, it must be considered whether this is going to be a long war or a short war, in order to determine whether to plan for long-range production or short-range production. This involves, of course, the use to which available equipment is to be put in the near future.

Mr. Alling suggested that the United States could assist by sending experts out to India to increase Indian efficiency in producing what India is already able to produce. In this connection, Mr. Perkins referred to gold mining in South Africa and said a comparable situation existed out there, where it would be desirable to switch from gold mining to the mining of copper and other metals essential to war production. The Indian situation, therefore, is just a part of the larger question. Mr. Perkins repeated that we should get more detailed information from the Agent General and he stated again that he is interested in the proposition of aiding India.

Mr. Perkins suggested that the technical side of the matter might be discussed with Mr. Alex Taub,¹⁰ who is chief engineer of the consulting organization of the Economic War Planning Board (Telephone: Commerce (87), Extension 2248).

9. Thomas K. Finletter, Special Assistant to the Secretary of State and Acting Chief of the Division of Defense Materials.
10. A conference on technical aspects of aid to India was held on February 6 in the Department of State, attended by the Indian Agent General, A. C. B. Symon of the Indian Purchasing Commission, Mr. Taub, and Mr. Alling and Mr. Parker of the Division of Near Eastern Affairs. Memorandum of conversation not printed.