891.03/5–751: Telegram
The Ambassador in India (Henderson) to the Secretary of State
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3124. For eyes McGhee NEA only.
1. Have just seen Bajpai his request. He said Nehru has made decision re food grain aid and Madame Pandit will probably convey it Dept on May 8 (Embtel 3113, May 6). Nehru plans in response query make statement in Parliament along following lines on May 10:
- (a)
- Bills which were presented to each of two houses US Cong have emerged from appropriate committees in forms somewhat different from originals. House bill seems to provide for supplying India food grain on loan basis. Senate bill apparently provides for supplying on basis half loan half grant. Senate bill attaches certain conditions to aid extended on grant basis. Study of these conditions indicates they are not discriminatory against India and are not of political nature. GOI finds terms both bills acceptable to it. If GOI was to express preference, however, it wld be for House bill since there is always possibility that conditions Senate bill, although not objectionable in themselves, might result in disagreement or misunderstandings. In settling loan GOI willing pay what it reasonably can in materials unprepared, however, furnish materials for use in connection with manufacture atomic weapons.
2. Bajpai outlined above to me without reference to notes and I was not in position to take notes. I believe, however, I have stated general tenor Bajpai’s remarks. He impressed on me extremely important no leak prior to Nehru’s statement, otherwise wld be extremely embarrassing to GOI and him personally. Bajpai, however, wanted Dept know in advance what Nehru’s statement wld be so Dept wld not be caught by surprise and wld have time discreetly to let friends in Cong know that perhaps loan preferable to loan-grant. He was extremely anxious, however, that no one outside Dept shld be informed on Nehru’s firm decision or that Nehru was to make statement.
3. I told Bajpai I was relieved learn Nehru wld make it clear he did not consider Senate bill attempt attach political strings or reflection on honor India. Nevertheless, I was disappointed decision was in favor loan. Bajpai said he shared my disappointment. He had [Page 2159] stressed to Nehru GOI’s hesitation re conditions attached to grant might have effect upon economic aid program for India and other countries Asia which US officials have been considering for some time. Nehru, nevertheless, was firm in his preference for loan.
4. I asked Bajpai if I shld infer that GOI preference indicated that GOI wld not care to be included in any US economic aid program if conditions were to be attached to grant aid similar to those contained in Senate bill. Bajpai replied in negative. He said that conditions of any economic aid of general character, grant or otherwise, which US might be willing to give India wld be considered on their merits. Fact that GOI preferred loan in connection with food grain aid did not necessarily mean it wld reject grant aid in any general aid program for South Asia.
5. In spite Bajpai’s statement, I am inclined believe that we shld not encourage Cong consider any bill for economic aid to India involving grants until we have had firm assurances from Nehru himself that conditions contemplated for extension grant aid wld be acceptable to him. I shall make this matter subject late telegram.