693.0031 Tibet/2–1749: Airgram

The Ambassador in India (Henderson) to the Secretary of State

A–168. Reference Embassy’s despatch no. 35 dated January 8, 1949,2 entitled “Visit to New Delhi of Tibet Trade Mission”.

Tibet Trade Mission has now returned to Delhi from Calcutta and has been carrying on negotiations with GoI3 regarding desire of Government of Tibet to obtain dollar exchange to buy gold to be used as backing for Tibetan currency. According to Mr. V. M. M. Nair, Deputy Secretary, Ministry of External Affairs, GoI, despite strong line taken by Mission, is not disposed to comply with Tibetan request for dollar exchange. Two reasons why GoI does not look with favor on Tibetan demand are (1) its disinclination to reduce India’s precious reserve dollar exchange by granting exchange for purchase of unessential commodity such as gold and (2) its belief that Tibetans do not really desire gold as backing for currency but to smuggle it back into [India?] for sale, a transaction that would result in enormous profit for persons involved.

Nair said one of the reasons used by Tibet in support of their request was that they had committed themselves while in US to purchase gold and that it would be embarrassing for them to renege on this agreement. In reply to Mr. Nair’s question, Embassy official stated that he doubted extremely that any agreement regarding purchase of gold had been entered into between the Tibetan Mission and the US Government. Embassy would appreciate any information in possession of Department regarding this point and particularly whether Tibet actually reached fan agreement with private companies to purchase gold.

GoI, despite its disinclination to grant dollar exchange for purchase of gold, is desirous of doing everything possible to satisfy Mission. It is granting free entry for goods apparently purchased by members of [Page 1065]Mission privately while abroad and has also offered them, in Mr. Nair’s words, “several hundred thousand dollars” for purchase of essential commodities such as machinery and agricultural implements from abroad. Tibetans, however, show little interest in this offer but continue to press for dollars to buy gold.

Henderson
  1. Not printed.
  2. Government of India.