891.03/4–751: Telegram

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

confidential

2728. 1. We hope Dept in studying our recommendations re Deptel 1613, April 41 will bear in mind certain differences between situation India and most other countries US has been extending economic aid. With their new independence Indians extremely sensitive at what might seem lack trust in them or fon supervision or interference. Altho mass Indians backward economically and culturally, elements controlling govt and policies highly educated with almost razor edge sensibilities. These elements our main target in campaign for friendly mutually beneficial cooperation with India. And what might seem them crass attempts to gain favorable publicity for ourselves with Indian masses or ill-considered efforts safeguard interests Amer tax-payer [Page 2140]against machinations untrustworthy Indian officials wld in our opinion alienate these elements and be harmful interests US.

2. We believe India has effective rationing system under supervision honest officials. Most black marketing and other illegal operations in food not thus far connected with distribution system per se. Certain inevitable amount petty under-counter sales and graft uncovered from time to time in lowest levels (ration shops) despite best efforts GOI. Thousands Amer observers cld not greatly change these local situations. We believe therefore that Amer observers shld be limited in number and duties shld be for most part symbolic and of liaison character.

3. Similarly we shld keep to minimum number US officials in India to cooperate with GOI in controlling counterpart funds. One tactful official wld be required soon to act in liaison capacity between two govts in deciding manner in which these funds are to be expended. Initiative re projects shld formally at least rest with GOI altho it shld be understood from beginning that all expenditures must meet US objectives expressed in food aid agreement. There shld be another official who wld engage primarily auditing duties of checking incoming and outgoing flow funds. In view exceptional sensitiveness Indian officials this work shld be carried out with circumspection and not in spirit of detective investigating suspected law breakers.

4. In our opinion it wld be unfortunate for US officials overtly attempt insure adequate publicity in India. This task shld rest primarily with GOI altho doubtless one US official shld be detailed to USIS to cooperate with GOI on this matter.

5. Specifically our tentative recommendations for assignments are: (a) Three officials to observe grain distribution; (b) One official to serve liaison capacity re expenditure counterpart funds and another official for auditing work re counterpart funds; (c) One person for liaison work re publicity.

6. Since only one country and only food grains involved, and in view delicacy this whole operation, we believe these officials for time being shld be assigned to Emb for all India work and shld not this juncture undertake operate as separate ECA mission. Later as situation clarifies, other needs become apparent, and suspicions removed, number cld if found necessary be increased and if considered advisable distinct ECA org cld be established.

Henderson
  1. Telegram 1613 to New Delhi requested the Embassy to estimate the number of American personnel which would be required to undertake the following functions with respect to the food grain program: (1) to observe the distribution of grain to insure that there was no discrimination and no diversion to unauthorized uses, (2) to control with Indian Government officials the use of counterpart funds, and (3) to insure adequate publicity. The Embassy was asked whether this last function should be handled under the regular USIE program, augmented as necessary, or whether a separate information group should be established. (891.03/4–451)