Memorandum by the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (McGhee) to the Secretary of State
Subject: Indian Bequest for Food Grains
Since the Indian Ambassador presented her Government’s request for assistance in obtaining 2 million tons of food grains on December 16, the Department has been studying the Indian food grain position and ways and means of meeting the request. We have consulted informally with Treasury, Commerce, Agriculture, ECA, and the Bureau of the Budget.
We find that the extraordinary sequence of floods and droughts which beset India has destroyed crops which would normally have produced in the order of 5 million tons of food grains. We find also that India would face very serious difficulties in financing the purchase of the total 6 million tons of food grains which it must import during 1951 to prevent mass starvation. Our statistics on these aspects of the situation require further refinement, but the foregoing general conclusions are valid.
Our own supply position is such that we can make available during 1951 2 million tons of food grains in addition to the quantities which the Indians intend to acquire in this country under their purchase program. Commerce has stated informally that ocean transport will be available. United States and Indian inland transport and terminal facilities are deemed capable of bearing the added burden.
The cost of 2 million tons of food grains is estimated at $180 million. Present indications are that few or no funds are available from previously appropriated ECA funds. It will almost certainly be necessary to ask Congress for new money for the Indian food grain program.
The newly appropriated funds should provide at least $90 million to be used for the procurement of 1 million tons of foodgrains in fiscal 1951, the balance of the request to be subject to review and appropriation of funds which must be available in the first half of fiscal 1952. This approach will permit a final evaluation of: (1) India’s addition food grain import requirement on the basis of crop-yields and domestic procurement in the first half of 1951, (2) India’s ability to finance further importation of food grains, on the basis of trade [Page 2096]developments in the first half of 1951, (3) our supply position in the light of other requirements which may develop, and (4) the availability of shipping and United States inland transport.
In order that procurement, loading and shipment may begin immediately, the authorizing legislation should also authorize the RFC to make available $50 million, pending the appropriation of funds for the first 1 million tons.
The aid agreement which will be negotiated with the Government of India for this program, should specify that the aid will generate counterpart funds which will be used for local expenditures involved in Indian programs: (1) to maximize Indian food production, (2) to provide for educational exchanges of the type now carried on under the Fulbright Act, (3) to establish technical and welfare institutes and (4) to develop health, sanitation and other similar projects for the benefit of the people of India.
In view of the grave impact of the program on the United States economy in general and on grain reserves and the price of grain during this period of crisis in particular, the Government of India must make every effort, in addition to that made possible by United States aid, to alleviate the present problem. In this respect, the agreement should specify that India maximize her effort: (1) to produce more food grains and (2) to increase procurement of food grains from other sources such as Pakistan and the Commonwealth. As an additional point the agreement might also specify that India maximize the production of strategic materials which are urgently needed by the United States.
For the purpose of administering the program, the President should appoint a Personal Representative for Indian Food Aid. Prior to the appropriation of funds for the last half of the program, the President’s Personal Representative should report to Congress on fulfillment of the terms of the agreement and should recommend Congressional action in the light of further information on: (1) India’s requirements, crop-yields and procurement, and (2) India’s ability to finance additional imports, as judged from trends in her balance of payments position in the remainder of fiscal 1951. The President’s Personal Representative should also supervise the deposit of counterpart funds, see that the food grains are distributed so as to achieve the maximum benefit for the people of India and see that the program receives full publicity in India.
The Government of India should bear the cost of transportation to India. The United States, however, should assist in making ships available through bareboat chartering or other means.
The Indian request collides with a highly unsatisfactory Indian position on the Far East crisis. We must focus attention on the humanitarian aspect of the Indian request and on the longer-range [Page 2097]aspects of our relations with India. If we do not assist India in its present crisis, elements inimical to the United States and the Western world generally will be strengthened. Our friends will despair of convincing the Indian masses of United States good will toward them and interest in them. If, as is probable, millions die of starvation, we shall find it difficult to live with our own consciences, and our dwindling credit in much of Asia will be further reduced.
If we do assist India, our friends will gain greater influence with the masses and with Nehru and his Government. We could mitigate much of the anti-Western bitterness which enables Nehru to maintain his present posture in foreign affairs. No overnight change can be expected, but the basis for a developing United States–Indian rapprochement will have been provided.
We have reached the stage in our examination of the Indian request at which an Executive decision is required. We can continue to compile and study statistics, and review possible legislation and sources of finance indefinitely. What is now needed to give direction to our efforts is a determination that it is in the United States national interest to meet the Indian request, in whole or in part and by such methods of financing as we can devise in consultation with the Congress.
This is the more true as considerable independent interest in this problem has appeared on the Hill. Senator Smith of New Jersey and Representative Javits1 are attempting with some success to line up bipartisan support for food for India. They and some of their colleagues are becoming increasingly convinced of the necessity of early legislative action.
The Executive cannot longer delay its decision. Food grains from a grant program must begin to move to India by April at the latest if a breakdown of the rationing system and possible starvation is to be averted.
That you sign the attached memorandum to the President2 seeking his decision to give Administration support to Congressional action providing for a grant food grain program for India.
E and H have concurred.[Page 2098]
Memo to the President
Paper on Economic Considerations
Paper on Political Considerations3[Page 2103]
- Correspondence with Senator H. Alexander Smith and Representative Jacob K. Javits, not printed, is in file 891.2311/1–2451.↩
- Memorandum to the President dated February 2, p. 2109.↩
- Papers on economic and political considerations are printed respectively as Annexes I and II, below.↩
- Herbert Hoover, U.S. President, 1929–1933; associated with a number of U.S. relief efforts abroad both before and after his presidency.↩
- Harold E. Stassen, President of the University of Pennsylvania.↩
- Robert A. Taft, U.S. Senator from Ohio.↩