Foreign Relations of the United States, Diplomatic Papers, 1945, The British Commonwealth, The Far East, Volume VI

740.00119 PW/8–3145

The Department of State to the British Embassy

Aide-Mémoire

The aide-mémoire and accompanying annexes, presented by the British Embassy to the Department of State on August 20, 1945, relating to proposed agreements with representatives of the Regent of Thailand, and the aide-mémoire presented by the British Embassy on August 14, 1945 on the subject of Thai rice,³⁴ have been examined with care.

As stated in the Department’s aide-mémoire of June 25, 1945, the United States Government hopes for an early settlement of the state of war between Great Britain and Thailand and that such settlement will not conflict with the viewpoint, interests or policies of the United States but will, on the other hand, contribute to Anglo-American unity of action in the Far East. In the light of the foregoing, the Department of State offers the following comment on the matters set forth in the Embassy’s aide-mémoire:

Thai Government

This Government assumes that in using the term “Thai Liberation Government” in the proposed agreements the British Government is referring to the constitutional Thai Government.

Proposed Political Agreement

1. The precise intent of Paragraph D 5 is not clear to this Government. In the light of the statements by Mr. Eden, quoted in the Department’s aide-mémoire dated August 22, 1945, regarding Thailand’s postwar economic collaboration within the international system, it is assumed that the international arrangements regarding tin and rubber referred to in Paragraph D 5 are those which may be effected under the auspices or with the approval of the United Nations Organization or its Economic and Social Council. Although, as set forth in the Department’s aide-mémoire of June 25, 1945, this Government would have preferred that such a commitment not be made a condition to British recognition of the sovereignty and independence of Thailand, but rather that Thailand should pledge as a sovereign power at the time of its admission to the United Nations Organization its cooperation in all pertinent international economic and security arrangements, it concurs in the objective of such paragraph as so understood. This Government hopes that in its reply to the Department’s aide-mémoire of August 22, the British Government will give assurance that the foregoing assumption as to the intent of Paragraph D 5 is correct.

2. This Government has misgivings over the possible implications of Paragraphs D 2 and 3. It will be recalled that Mr. Eden gave assurance that the British Government favors the restoration of the freedom, independence and sovereignty of Thailand, “subject only to its accceptance of such special arrangements for security or economic collaboration as may be judged necessary within an international system” and possibly to some special arrangement in the Kra Isthmus “within the framework of an international security system.”

A requirement that Thailand may not reserve for itself or its own nationals certain economic, commercial or professional pursuits without the agreement of the British Government, insofar as British interests or professional men are concerned, would, this Government believes, constitute a definite impairment of Thai sovereignty and independence, would be contrary to the spirit of the international system envisaged by the United Nations Charter, and might result in discrimination against the interests of other United Nations and their nationals.

This Government has consistently disapproved peacetime monopolies and government restrictions which hamper the natural and normal flow of economic and commercial activity throughout the world, which it believes is essential to world prosperity, peace and stability. At the same time it is recognized that, except as may be limited by voluntary international agreement, every sovereign nation has the right to reserve to itself control of its internal economic and commercial opportunities. The right to practice law, for example, or to engage in coastwise or internal river navigation, has been so reserved by many countries.

This Government will be glad to join in representations to the Thai Government opposing measures which exclude the United Nations and their nationals, including industrial and commercial interests, from reasonable participation in Thai economy and trade, and in seeking non-discriminatory treatment for all United Nations and their nationals and agreement that any concessions or other special privileges which the Thai may grant shall be open to all on equal terms. This Government cannot view with favor, however, any proposal whereby the British Government might impose as a condition to a liquidation of the state of war with Thailand and a recognition of the Thai Government, a requirement which would infringe the sovereignty and economic independence of Thailand and grant to British interests special economic, commercial or professional privilege.

This Government earnestly hopes that it may receive assurance that its misgivings as to the implications of Paragraphs D 2 and 3 are unfounded and that the British Government proposes by those paragraphs to seek only non-discriminatory treatment for British industrial and commercial interests and British professional men participating in Thai economy and trade.

3. Further study is being given by this Government to the paragraphs of Section C entitled “Measures for Post-War Strategic Co-operation”.

4. This Government concurs in the view that Thailand should assume responsibility for compensating losses or damage to property rights and interests of the Allies and their nationals for which the Thai Government might be deemed directly responsible. It is of the opinion, however, that Thailand should not be required at this time to pay compensation for losses or damages for which the Japanese were responsible, as it believes that consideration of such claims should be postponed until general reparations questions relating to Japan, including possible reparations from Japan to Thailand, are decided.

On December 8, 1941, despite sporadic resistance by Thai elements, the then Thai Government gave Japan, in response to an ultimatum backed by overwhelming force, the right to transport troops across the country.³⁵ It is understood that immediately upon their entry, the Japanese forces, in violation of the terms of consent which had been given, extended their control over substantial parts of the country and looted the property of British and American concerns; and that such looting took place several weeks before the Pibul Government issued its declaration of war against Great Britain and the United States and before any acts affecting British and American property interests, were taken by the Thai Government pursuant to that declaration.

In offering its views on this point, this Government is actuated not only by a sense of justice but also by the belief that in the interest of future peace and stability in that region of the world it is important that the areas of southeastern Asia be permitted to return to normal economic conditions as rapidly as possible. Thailand will face a very serious financial and economic problem arising from the hundreds of millions of bahts loaned to the Japanese³⁶ under compulsion on security which will probably prove worthless. A requirement that Thailand make compensation for losses or damages for which the Japanese were responsible might seriously intensify the economic ills of the country, retard Thailand’s general fiscal and economic recovery, and thus affect the interests of all nations concerned with the economic welfare and stability of southeastern Asia.

Proposed Military Agreement

The situation facing the Allied Command of the Southeast Asia theater is unique in Anglo-American combined military activities in the war. Thailand is the only country within the theater of a combined Anglo-American Command with which one of the Governments represented in that Command is at war, while the other Government is not. It is important, therefore, that unusual care be exercised by that Command in matters which would involve the relationship of those Governments with Thailand.

This Government has no objection to the conclusion of a military agreement between Admiral Mountbatten, as Supreme Allied Commander, South East Asia, and representatives of the Thai Government, but believes that any such agreement should be limited strictly to matters of concern to the British and American Governments in the war against their common enemy. The combined Allied Command was created for that purpose, and this Government believes that the Command should not take any action which would tend to compromise the position of the United States, which has considered Thailand not an enemy but a country to be liberated from the enemy, and with which it expects to resume diplomatic relations in the near future. This Government is confident that the British Government would not desire to embarrass this Government by pressing for such action, especially as the Thai Government has given every indication of its determination to make restitution for the past and to cooperate with the United Nations in the future and so meet the basic objectives of the British Government without necessity for any such action.

Thai Rice

This Government recognizes the immediate importance of the production and export of the maximum quantity of rice from Thailand to the other areas in need of that commodity. It has given careful study to the British Embassy’s aide-mémoire of August 15 [14], 1945 and is agreeable to the proposal of the British Government that allocations recommended by the Combined Food Board or a successor body should apply to all such surplus rice including that required both for military and for civilian requirements.

This Government recognizes also the advantages which would accrue from combined, instead of competitive, activity in the stimulation of production and the maximum export of rice. It has examined with care the proposals relating to Thai rice which are included in the proposed agreement on military and quasi-military matters annexed to the Embassy’s aide-mémoire of August 20, 1945. As the United States is not at war with Thailand, it is not in a position to give favorable consideration to those proposals. This Government would be willing, however, to join with the British Government in negotiating through political channels with representatives of the Thai Government a tripartite agreement based on the principles set forth in the Annex to this aide-mémoire. Pending conclusion of such a tripartite agreement the American military and civilian purchasing authorities will continue to feel free to effect directly the purchase of rice to be procured by them in Thailand in accordance with recommended Combined Food Board allocations, but if and when the proposed unit should be established they would effect procurement through such unit. This Government believes that the objectives of stimulating rice production and of maximizing exports in accordance with United Nations’ needs can be achieved by the procedure proposed without embarrassment to either Government.

It will be observed that there are several important differences between that plan and the plan proposed by the British Government, The American proposal would rely primarily on the cooperation and good faith of the Thai Government. It provides that the rice unit would work with the Thai Government in stimulating production and would have sole authority to arrange for the export, directly or under its authority, of all surplus rice. It would eliminate the provision relating to the methods whereby Thailand should pay for relief supplies as that would appear to be a matter for agreement between the Thai Government and the supplying governments or organizations. Because the Thai Government derives essential revenues from moderate export duties on rice, the American proposal would not prohibit their imposition, but would require the approval of the unit for the imposition of any new duties or any increase in rates above those in effect on August 15, 1945. Finally, the American proposal would omit the imposition of a levy on Thailand of one and a half million tons of rice.

This Government considers that any levy on Thailand would not be just in view of the Thai readiness and desire to join in the war against Japan and their deferment of such action only at the express request of the Supreme Allied Commander and at the express request of this Government that they coordinate their plans with his. Furthermore, the amount of the proposed levy may well be, in the light of the most recent estimates received by this Government, in excess of the total amount of Thai rice, including stocks now on hand, available for export during the coming year, and this Government considers that any levy of Thai rice would be prejudicial to its interests. This Government would not feel free to share in the proceeds of such a levy even though it may find it important to procure Thai rice to meet its rice requirements.

If the principles set forth in the Annex are acceptable to the British Government this Government is prepared immediately to empower a representative to enter into the proposed negotiations on behalf of this Government and to designate its representation on the proposed combined unit as soon as the negotiations are concluded.³⁷

Washington , September 1, 1945.

[Annex]

Proposed Principles for Tripartite Agreement on Thai Rice and Other Export Commodities in Short World Supply To Be Negotiated With Representatives of the Thai Government

I

1. The Thai Government would recognize the immediate importance to the United Nations of producing and exporting in accordance with allocations recommended by the appropriate Combined Boards or successor bodies determined by the United States and Great Britain the maximum amounts of rice and certain other commodities in short world supply, and would express its desire to cooperate with and aid the United Nations by cooperating with the United States and Great Britain in achieving this objective.

2. The United States and Great Britain would recognize the immediate importance of such production and the prompt and efficient export of Thai rice and other commodities in accordance with recommended international allocation and would agree to aid in those objectives.

II

3. The Thai Government would undertake to prohibit during the period of the agreement all exports of rice, tin, rubber, and teak (if teak is made subject to recommended international allocation by a Combined Board or a successor body), except in accordance with recommendations of the appropriate Combined Board or any successor body determined by the United States and Great Britain.

4. The Thai Government would be permitted to have a representative on the Committees of the Combined Boards or successor bodies dealing with such commodities.

III

5. The United States and Great Britain would establish a Combined Thai Rice Commission (CTRC) to advise the Thai Government on and promote the production of rice in Thailand and to arrange for the export directly or under its authority of all surplus rice in accordance with allocations recommended by the Combined Food Board or successor body.

6. The Thai Government would agree to cooperate with CTRC in stimulating the maximum economic production of rice in Thailand, to make all surplus rice and paddy in Thailand available for export by CTRC or under its authority, at prices to be determined by agreement between CTRC and the Thai Government, and to prohibit the export of paddy or rice from Thailand except by CTRC or under its authority. More particularly the Thai Government would agree:

a. To require returns from all holders of stocks of paddy and rice;

b. To assess, in agreement with CTRC, the quantity of rice surplus to the internal needs of Thailand;

c. To take all reasonable means, including collection schemes, and, if need be, requisitioning, to make all surplus rice and paddy available for export by or under the authority of CTRC;

d. Not to impose or permit the imposition of any export or other duties on rice or paddy not in effect on August 15, 1945 or any increase in the rate of any such duties in effect on that date except as may be determined by agreement between the Thai Government and CTRC;

e. To license all mills and to restrict all purchases and sales by millers to prices to be determined by agreement between the Thai Government and CTRC;

f. To use all reasonable means, including if need be the required cannibalizing of mill or other machinery, to assure adequate rice milling power;

g. To use all reasonable means to assure transport on adequate scale from paddy fields to mills and from mills to ports;

h. To use all reasonable means to effect prompt restoration of adequate port facilities.

7. CTRC would advise and assist the Thai Government on policies designed to effectuate and expedite the program and would recommend to the British and American Governments such measures of assistance as it might deem essential for such purposes, particularly in regard to:

a. The procurement and importation of items required in connection with rice production and export, including milling, transportation and repair of port facilities;

b. The procurement and importation of needed incentive consumer goods.

8. CTRC would endeavor, in consultation with the Thai Government, to arrange, so far as might be practicable, that payment for all rice exported by it or under its authority would be by the establishment of credits in currencies which would meet Thailand’s foreign exchange needs. Rice exported for British or American use would be paid for by the establishment of credits in British and American currency, respectively.

9. The Thai Government would recognize the urgent need of framing a currency policy designed to promote economic stability in the country and maximum economic rice, tin and rubber production. The United States and British Governments would each agree to make available or assist in procuring the services of financial and economic experts as advisers to the Thai Government for such purposes when requested by the Thai Government.

IV

10. The agreement would be in effect until September 1, 1946 and be renewable for a period of six months upon the request of the United States and Great Britain.

11. If during the life of the agreement any of the commodities specified in paragraph 3 should cease to be subject to recommended allocations by a Combined Board or successor body, the agreement would not thereafter apply to such commodity. Should rice cease to be subject to such allocation the provisions of paragraphs 5 through 9 would terminate except as to obligations already incurred.

34. Not printed.
35. See telegram 557, December 8, 1941, 5 p.m., from Bangkok, Foreign Relations, 1941, vol. v, p. 378.
36. According to a report prepared by the Thai Director of the Bureau of Foreign Trade at the direction of the Thai Regent, a total of 1,310,701,083 bahts had been supplied to the Japanese for military expenditures through July 19, 1945. A copy of this report was received from the Office of Strategic Services on August 25 (892.515/8–2545).
37. In telegram 7548, September 3, 11 a.m., to London, the Department summarized the aide-mémoire of September 1 and stated that the Joint Chiefs of Staff had requested the Combined Chiefs of Staff “to inform Mountbatten that any military agreement with Thailand should be with representatives designated by Regent on behalf of his Thai Govt and more strictly limited to matters of Allied concern relative to surrender Japanese forces”. (741.92/8–2045)