Foreign Relations of the United States, 1950, East Asia and the Pacific, Volume VI

611.92/10–1550

Policy Statement Prepared in the Department of State¹

secret

[Washington,] October 15, 1950.

Thailand

a. objectives

The principal US objectives in Thailand are: to strengthen ties of friendship and trust between Thailand and the US; to include Thailand, as a supporter of US policies, wherever possible in the various organizations of the UN; and to help Thailand establish itself against Communist forces in the Far East by encouraging it in every feasible way to achieve (1) internal political stability, (2) a strong and solvent economy, and (3) a situation wherein the average Thai citizen might have the maximum benefit possible for modern technological advances.

b. policies

The threat of Communism is ever present in the minds of Thai politicians. They see the Communist movement as one of the two major political forces in the Far East with which they must come to terms, the other force being western democracy. It has been traditional Thai procedure to balance the political forces which beset Thailand in order to remain independent. If one force became strongly dominant, Thailand in the past has opportunistically made terms with that force in order to survive. Until overt Communist aggression commenced in Korea on June 25, 1950, it was believed that Thailand was continuing her traditional policy for survival. Some Thai leaders were making public comment to the effect that little aid could be expected from the western democracies against the forces of Communism, and that therefore Thailand should prepare to resign itself to a period of Communist domination. Their fears were based on the success of the Communists in China and the continuing strength of the Communist-led Viet Minh forces in Indochina.

Thailand’s Government, however, undertook a departure from its traditional policy of balancing political forces, when on February 28, 1950, it officially recognized the Governments of Laos, Cambodia, and Vietnam, thus aligning Thailand against the forces of Communism in Indochina. Thailand has also resolved not to recognize the Chinese Communist Government and is prepared to resist its entry into the United Nations. An even more decisive move was made by Thailand on July 21, 1950 when it became the second nation (China was the first) to offer ground troops to the United Nations in support of UN forces in Korea. Thailand has thus irrevocably severed its ties with Communist countries and committed itself positively to the cause of the free nations.

The US has attempted to consolidate Thailand’s position among the non-Communist nations and has opposed infringement by other states on Thailand’s political and economic sovereignty. It has also attempted by various means to promote Thai prosperity as an example to the emerging states of Southeast Asia of the advantage of good relations with the US, and the advantages of democracy over Communism. In formulating our policy toward the Thai Government we have kept the UK and France informed on certain matters of mutual interest so that all might act along similar lines when necessary.

The frequent changes of government in the past have tended to weaken Thailand’s defense against Communism. Since World War II there have been nine administrations. The present government, however, has been longer-lived than any of its predecessors and gives promise of continuing at least until the next general election, to be held about December 1952. The Prime Minister, Phibun Songgram, achieved control of the nation by a coup d’état on November 28 [7–8], 1947 and made himself Prime Minister on April 8, 1948. Although he was Prime Minister during World War II and actively collaborated with the enemy, declaring war on the UK and the US, he has conducted his Government in a manner friendly to the US and has openly declared himself opposed to communism.

It has become increasingly evident that effective resistance to Communism must be based on widespread internal public support within the country. It is equally evident that the US cannot create that support; primary responsibility must be assumed by the government or by the anti-Communist leadership of the country itself. Our Ambassador has frequently expressed as strongly as possible US interest in stable government in Thailand, urging the Prime Minister and other officials to reconcile the dissident political groups for the good of the nation. During the frequent changes of government the US has carefully avoided supporting any one political group against the others.

It is now US policy to provide military aid to Thailand, to the amount of $10,000,000 in the fiscal year 1950. In view of the world situation, active consideration is being given to the necessity of providing further military aid in 1951. So that our military aid should not become a disturbing factor in the internal political situation in Thailand, the arms are given on a balanced ratio to the various armed services. The effect is to increase the strength of the Government with respect to dissident elements amongst the Chinese or Viet Minh, without impairing the dominant position of the Government over those Thai elements which might desire a coup d’état. Military aid, therefore, not only tends to assure the independence of action of Thailand in opposition to external communism but also to stabilize the internal political situation.

The Thai Ministry of Defense has been studying the organization and administration of the US Services in order to lay plans for the reorganization of the Thai Army, Navy and Air Force in accordance with US practices. In connection with military aid to Thailand, a military mission of a technical nature will be dispatched to instruct the Thai military in American practices.

The US Department of the Air Force has for sometime desired to negotiate a military air agreement with Thailand for aviation rights to provide for necessary flights. At present, however, there is an informal arrangement whereby US military air needs are met on an “ad hoc” basis, and it is present policy to delay formalizing the agreement in order to avoid jeopardizing the present satisfactory informal arrangements and to save Thailand from the multiple difficulties which would arise if other nations—possibly less friendly than the US—sought similar air rights.

In the belief that a nation which stands alone is especially susceptible to Communist attacks from both within and without, the US has sought to draw Thailand fully into the activities of UN organizations. This task has been helped by the fact that Thailand is located on the air crossroads of the Far East—sixteen airlines use Bangkok as a transit point. The US has encouraged the establishment of regional offices at Bangkok of such UN organizations as the Food and Agriculture Organization, the International Rice Commission, and the Economic Commission for Asia and the Far East (ECAFE), and the Thai Government has given a warm welcome to them. Thai delegates are encouraged to take an active part in other organizations which convene in other parts of the world. In general Thailand follows the US position in controversial matters before UN organizations.

In order to help the Thai public form a broader view of the world situation and of US actions, we are using the instruments of press and radio, a library, educational films and study materials, and pamphlet and magazine distribution. The US is encouraging the exchange of students and technical experts; and the US and Thai Governments have signed a Fulbright Agreement.²

Special attention is being devoted to countering Communist propaganda activities which are in a large part promoted by segments of the Chinese minority in Thailand. Special pamphlets and press materials are prepared in Chinese for this group.

Thai cultural traditions place a low premium on trade and industry. For many generations these activities were largely the province of alien trading communities, particularly Chinese, and in more recent times European, especially British. Hence, in a special sense, Thailand’s economic policies have been largely means through which Thailand successfully pursued its major and modest objective of preserving its independence, since direct governmental interests in economic affairs was relatively small. Thai Government economic positions have traditionally been taken on grounds consistent with the Government’s total view of Thailand’s political position.

It was thus easy in the past for Thailand to accommodate itself to a world trading system of relatively little governmental intervention in trade and currencies, since a general policy of non-discrimination and grants of non-exclusive rights was in the Thai political interest. But the increasing breakdown of the liberal world economy during the past two decades has encouraged increasing Thai governmental action on economic matters. Related phenomena were the Thai variant of the world-wide intensification of nationalism during the 1930’s, which remained consistent in form with the authoritarian Thai political traditions. Hence, in more recent years Thai government practices have continually presented minor points of conflict with our liberal and generally non-discriminatory principles and our private enterprise economy. So long as we are able to preserve, however, the elements of a world economic system based on our own policies, so long will Thai policies be adapted in practice to avoid major points of conflict with so powerful a country as the US.

Thailand is now in the fortunate position of being economically one of the strongest countries in the world, with a relatively high and rising standard of living, favorable terms of trade, a stable price level, no significant fiscal problems, a “sound” currency (even by orthodox standards), and no troublesome internal or external debt structure; furthermore Thailand is evidently able to borrow fairly freely for her capital needs.

It is against such a background that in the recent past we find Thailand rejecting invitations to ITO conferences, rejecting invitations to join in GATT negotiations, and informally stating that International Monetary Fund recommendations on Thai exchange rate practices are so displeasing that Thailand may withdraw from the Fund. Similar shows of independence have come in various Far East regional UN meetings of ECAFE and the FAO, at which the Thais have opposed regional schemes of economic cooperation.

We will, however, continue to take all reasonable opportunities to encourage full Thai participation in our international arrangements relating to trade and monetary practices. At this particular time, the Thai Government apparently wishes, on most fundamental political grounds, to give evidence of its adherence to US policies and support of US views. For example, it is reported that Thailand is reconsidering its former unfavorable attitude toward GATT, and we will seek for favorable occasions on which to encourage their participation in GATT. Through the meetings of the International Monetary Fund, we will actively encourage serious consideration by Thailand of the recommendations made by the Fund, designed radically to simplify the complex multiple exchange rate practices engaged in by Thailand, although we recognize that the baht-sterling rate cannot be brought into complete accord with the baht-dollar rate in the near future. We shall wish to take special action, however, to ensure that Thailand does not continue its practice of affording a discriminatory rate favoring imports from Japan as against the US, since this does not require full international action. We shall encourage, however, the growing revival of normal trade relations with Japan and, in line with our general policies, encourage all developments that will place such trade upon a more normal basis than does the present quasi-barter agreement.

We have a specific interest in the further economic development of Thailand because it has a politically stable and friendly government. We are particularly concerned to assist its efforts to increase the production of rice, in view of the continued rice shortage in the Far East. To this end, it is necessary for Thailand to develop its technical agricultural services, to improve and extend its control over water supply and to improve its internal transportation system as well as its port facilities. The Thai Government is fully aware of these problems and has taken steps to meet them. We shall cooperate fully within the restrictions imposed by our limited appropriation for economic assistance. With regard to the first of these problems, that of increasing the productivity of her present resources, we shall continue to assist through such means as the ECA program for Thailand, possibly through limited Point IV assistance and through our participation in international organizations. The last-named problems, water control and transportation, involve an increase in the Thai capital plant, and will for the time being be met partly by the ECA program but largely through a loan from the IBRD, which we have supported and will continue to support.

Through the ECA and other channels for providing technical assistance we will also help to lay the groundwork for exploitation of Thai reserves of non-ferrous ores. We have already given assistance in connection with partial Thai geological surveys and will continue to help Thailand in this respect. The Thai, as well as ourselves, are concerned to create those conditions in the form of investment policies and tax practices which will stimulate US private investment in Thai mineral resources. Encouraged by recent official Thai statements, we shall take every opportunity to clarify and solve these issues.

We are concerned with various Thai Government practices increasing that Government’s direct participation in international trade to the exclusion of private enterprise, although we recognize these practices derive from its political position. The Thai Government’s monopolization of the rice export trade does not, however, significantly injure any direct American economic interests, and we concede that governmental profits made by this monopoly are a highly convenient fiscal instrument and also constitute a measure of not too inefficient control over the Chinese trading community. We are more concerned with Thai Government activities in the field of petroleum imports, storage and distribution. Continual US intercession has limited Thai restraints on private petroleum interests, and further intercession will undoubtedly be required in the future. We are currently particularly interested in these problems because of our interest in controlling the distribution of war potential materiel in the Far East.

The 1947 Bilateral Air Transport Agreement between the US and Thailand provides adequately for the air rights desired by each country in its respective stage of aviation development.³ The US Civil Aeronautics Board (CAB) has received applications to conduct trans-Pacific services from two Thai companies, Trans-Asiatic Airlines (Siam) and Pacific Overseas Airways (Siam) Ltd. In the light of available information on the potential air traffic between the US and Thailand, it appeared that the CAB would find it difficult to justify the operations of two Thai carriers to the US as being in the US public interest. The CAB suggested that the Department try to persuade the Thai Government to withdraw its endorsement of one of the two carriers. Largely at the request of the Thai Civil Aeronautics Board, the matter has been held in abeyance pending possible amalgamation of the two Thai carriers. Recognizing that Thailand has the right to designate two carriers under the agreement, the Department will not request the Thai Government to waive its rights, but will continue informally to assist the US Civil Aeronautics Board to solve this problem.

c. relations with other states

The UK has supported the Phibun Government and generally cooperated with the US in strengthening the economic and military position of Thailand in the face of possible Communist aggression. With the other members of the British Commonwealth, the UK has instituted a Southeast Asia economic assistance program. Thailand was invited to participate in a conference in London in September 1950, to discuss the Commonwealth program. Thai and British military forces have coordinated their efforts to suppress Chinese terrorists along the Malayan border and the UK has provided military equipment for Thailand on a reimbursable basis. Liaison between the Thai and British Governments was highlighted by the conversations between the British Commissioner General in Southeast Asia and Prime Minister Phibun in December 1949.

The UK is also endeavoring to rebuild its economic relations with Thailand. The UK had dominant influence there before World War II because of its large investments and its control of Thai fiscal policies. Since the war British influence in the country’s economic life has been somewhat lessened owing to the UK’s weakened economic and political position and the fact that the US has been better able to fill Thailand’s rehabilitation needs. Nevertheless, the UK has retained considerable influence through the extensive mining and lumber interests of British subjects, through Thailand’s favorable trade balances with sterling areas, and through the influence of the British financial adviser to the Thai Government.

The UK has been particularly interested in procuring Thai rice and in March 1950, contracted to purchase 464,500 tons for areas under British control in Asia. Following the devaluation of the British pound in 1949 the Thai Government announced an increase in the sterling price of rice but after vigorous protests by the UK agreed to maintain the pre-devaluation rice price. In May 1950 agreement was reached for settlement in a lump sum of certain British Commonwealth claims against Thailand for war damages to property owned by Commonwealth nationals. The claims were paid through the release of frozen sterling assets in London.

Australia’s interest in Thailand as a key area in Southeast Asia has been most evident in the vigorous support that dominion has given to the Commonwealth aid program for Southeast Asia. Australia’s principal economic interests in Thailand are in tin mines. By the terms of the Australian-Thai Agreement of April 3, 1946, Australia gained a possible advantage in certain future economic agreements: Thailand agreed to inform Australia before it entered into any economic agreement with third nations, in order that Australia might have an opportunity to become a party to such agreements.

Relations between India and Thailand are friendly, although Thailand has not been inclined to respond to Indian attempts to assume leadership in stimulating interstate cooperation in Southeast Asia, partly because of fear of Indian hegemony in the area. In 1949 Thai statisticians were sent to India for training. This assistance possibly presages further technical cooperation between Thailand and India.

The return of the border territories in Laos and Cambodia which the Vichy Government, under Japanese pressure, had ceded to Thailand in 1941 brought about some improvement in Franco-Thai relations. Thailand accepted a French invitation to send a military mission to Saigon in September 1948 to discuss problems of border patrol and mutual defense against Communism. Thailand and France raised their respective Legations to Embassies in 1949 as a symbol of their good relations. However, the activities of Indochinese in Thailand in support of the revolutionary movements in Indochina continue to place a strain on relations between France and Thailand. Thailand continues to be a channel for shipments of arms and other supplies to the revolutionaries in Indochina, despite sporadic efforts by the Thai Government to improve border controls in response to French representations. The US has also attempted to impress the Thai Government with the importance of checking this traffic. On the other hand, the Thai Government did assist acceptance of the French-backed Bao-Dai regime by becoming the first Asian state to recognize Vietnam. Apart from the problems created by the dissident movements in Indochina there persists a latent Thai antagonism toward the French which stems from what the Thai consider the historic French encroachments on Thailand’s eastern border.⁴

Formal relations between China and Thailand were established for the first time by the Treaty of Amity between the Chinese Nationalist and Thai Governments in 1946. The status of the Chinese minority of some three million in Thailand has been the key issue in the relations between these two countries. The Thai Government has attempted with indifferent success to ease the hold of the Chinese community on the economy of the country and to force assimilation of this important group by restricting occupations to Thai nationals, and controlling Chinese schools and organizations in Thailand. At the same time Chinese immigration quotas have been lowered and there are periodic attempts to roundup illegal Chinese entrants. The Chinese minority is posing increasingly critical problems with the growth of Communist influence among the Chinese. The Chinese Nationalist Embassy in Bangkok declined rapidly in influence in 1949–50. The Chinese Nationalist diplomatic mission in Thailand is now headed by a Chargé d’Affaires and the five Chinese Nationalist consulates in Thailand are closed. There is no Thai Ambassador in Formosa.

The newly constituted Chinese Communist Government has leveled several propaganda attacks against the Thai Government alleging mistreatment of the Chinese minority and subservience to the western “imperialists”. Meanwhile the Peiping regime has increased its hold on the Chinese community in Thailand by developing the framework of a Chinese Communist apparatus in Thailand designed to exploit favorable political opportunities. The Thai Government has not recognized the Chinese Communist Government.

The termination of US purchases of Thai rice for China under the ECA offshore procurement program resulted in considerable loss in Thailand’s dollar income. There are increasing indications that Thai rice is now being shipped indirectly to Communist China.

Relations between Thailand and Japan in the postwar period have centered on the revival of normal trade relations between the two countries. In 1946, at the invitation of SCAP, Thailand dispatched a mission to Japan to buy Japanese textiles. In June, 1948, SCAP invited a Thai trade mission to Japan to negotiate sales of railroad equipment, machinery, textiles, and other commodities in exchange for rice and other Thai products. In December, 1948, Thailand and SCAP signed a $60–million barter agreement for the re-establishment of trade connections along these lines. This was followed by another barter trade agreement in 1949 calling for the exchange of $90,000,000 worth of commodities. Several Japanese trade missions visited Thailand in 1949–50 to promote commerce between the two countries. In August, 1950, SCAP approved the establishment of a Thai diplomatic mission in Tokyo.⁵

Before World War II the Thai conducted negotiations with the USSR concerning the exchange of diplomatic missions. Agreement was reached in December, 1946. A Thai Minister went to Moscow in April, 1947; the Soviet Minister arrived in Bangkok in March, 1948. There have been limited contacts between the Thai Government and the Soviet Legation in Bangkok. The Soviet diplomatic mission conducts an information program in Bangkok and probably maintains covert contact with the Vietnamese and Chinese Communist minorities. The staff of the Soviet Legation was augmented in 1950 by the arrival of eight new members, presumably information specialists. The USSR maintains an office of the Soviet trading company in Bangkok. However, trade has so far been promoted chiefly through Czechoslovakian and Chinese business firms.

The US is following the activities of the Soviet Legation in Bangkok in order to counteract Soviet propaganda and to determine the extent of liaison between the USSR and Communist-led political movements in Thailand and adjacent areas. The US is also interested in Soviet attempts to procure strategic materials in Thailand and possibly to channel rice shipments to Communist-held areas, particularly China. The western orientation of Thailand’s foreign policy has minimized the likelihood that the Thai Government will play off the USSR against the US despite occasional rumors of covert Thai dealings with the Soviet Legation.

Thailand’s relations with the metropolitan countries controlling adjacent colonies have influenced and complicated its relations with its neighbors in Southeast Asia. Some Thai attempted to lead the countries of Southeast Asia into regional cooperation through the short-lived Southeast Asia League that was organized in Bangkok in September 1947. In 1949 Prime Minister Phibun proposed a conference of Southeast Asian countries but deferred to a similar proposal by President Quirino of the Philippines. The Thai delegate to the resulting Baguio conference was instructed to eschew any military commitments and to emphasize social and economic discussions.⁶

As a member of the United Nations Thailand willingly undertook military obligations in support of the UN and Republic of Korea armies in Korea. Thailand has also been active in other UN activities and organs, particularly such specialized agencies as ECAFE and FAO, both of which maintain regional headquarters in Bangkok.

The Thai Government is apprehensive of the mounting Communist threat in the Far East and has generally cooperated with efforts of the western powers to block Communist expansion. The degree to which these efforts are successful in checking Soviet imperialism will be a determining factor in shaping the pattern of Thailand’s foreign relations.

d. policy evaluation

US policy actions since World War II have been successful in helping Thailand re-achieve a substantial position in the family of nations. We have helped Thailand express its sovereignty in political and economic matters in connection with newly negotiated international agreements. Our active interest in Thailand’s rehabilitation has made the country less susceptible to the rising tide of Communism in the Far East. Our support of Thailand in various UN organizations has led it generally to take the US position in controversial matters and Thailand has willingly cooperated in selling her principal products under international allocations as desired. The fact that Thailand is the only comparatively peaceful area on the Far Eastern mainland from Korea to India is significant. A continuation of present US policies toward Thailand should help it remain free from Communist domination and should strengthen the bonds of friendship between Thailand and the US.

1. Policy statements on various countries were prepared and updated periodically in the Department of State.
2. For the text of the Agreement for the financing of certain educational exchange programs (Fulbright Agreement), signed into force at Bangkok on July 1, 1950, see Treaties and Other International Acts Series 2095, 1 UST 529.
3. For the text of the Air Services Agreement, signed into force at Bangkok on February 26, 1947, see Treaties and Other International Acts Series 1607, 61 Stat. (pt. 3) 2789.
4. For further documentation on the United States policy on Indochina, see pp. 690 ff.
5. For further documentation on United States policy on Japan, see pp. 1109 ff.
6. For further documentation on the Baguio conference and attempts to form a pacific Pact, see pp. 1 ff.