693.0031 Tibet/7–249: Airgram

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

A–224. In addition to inquiring regarding the purchase of gold for U.S. dollars in the United States of which the Embassy has already been informed, the Tibetan Trade Mission while in the United States also inquired about loans for use in purchasing machinery in the United States and in stabilizing the Tibetan currency. The Mission was informed that it was at liberty to approach the Export-Import Bank of Washington to discuss the possibility of obtaining a loan for financing the export machinery to Tibet and was given general information regarding the operations of the Bank. The Mission was further informed that there are no funds available at the present time to permit a loan to the Tibetan authorities for the purpose of currency stabilization.

During discussion of Government of India restrictions on the use of Tibetan dollar funds, the Mission was informed that it was not believed appropriate under the circumstances for the U.S. Government to raise with the Government of India the question of trade and exchange controls exercised over transactions between Tibet and other countries. The Department is, however, prepared to reconsider its position concerning a possible approach to the Indian Government on the matter of dollar exchange. The Tibetan Trade Mission while in Washington stated that the dollar exchange in question accrued on goods in transit from Tibet to foreign destinations but that its use was withheld by India except for purposes approved by India. The Department [Page 1078]realizes that this situation may result from lack of adequate banking and trading mechanisms or other sound reasons, and appreciates India’s special problems in connection with the gold in question. Furthermore, the Government of India has subsequently released some Tibetan dollar exchange for the purchase of gold in the United States. However, for India to assume, even with the best of motives, control over Tibetan foreign exchange on what is apparently considered by Tibet an arbitrary basis, might tend, if persisted in, to alienate Tibet from its favorable attitude toward the West and would seem to be contrary to the principles of freedom of international trade and intercourse which the United States supports. The Department has supplied this outline of its present views for your background information and for use in your discretion.

For the Embassy’s information, the Department does not consider that any of the courtesies extended to the Tibetan Trade Mission while in the United States have the effect of altering the statics quo among China, Tibet, and the United States. In particular the willingness of the U.S. to sell gold to the Tibetan authorities does not constitute recognition of the Tibetan administration as a sovereign government.

The Department is undertaking a review of U.S. Policy toward Tibet and expects to inform you of the conclusions reached.