892.00–R/6–2751

Memorandum of Conversation, by the Ambassador in Thailand (Stanton)

confidential

Subject: ECA Program in Thailand

Participants: Mr. William C. Foster, ECA Administrator
Mr. Griffin, Director, Far Eastern Division, ECA
Mr. Edwin F. Stanton, American Ambassador to Thailand

I called on Mr. Foster and Mr. Griffin this morning and discussed with them the 1951 and 1952 programs for Thailand. With respect to the 1951 program, Mr. Griffin informed me that as a result of the combined efforts of ECA and the Department of State it would be [Page 1613] possible to restore a substantial portion of the cuts made in the 1951 program. More specifically he stated that $700,000 had been restored for the Highway Program and that he had instructed Mr. Berrigan to return to Washington from Bangkok in order to expedite procurement of the more essential equipment needed for the commencement of the Highway Program. Mr. Griffin also informed me that he had been able to divert several hundred thousand dollars to the program for Thailand from unexpended funds. He said he thought the grant total of funds which would now be available for Thailand for 1951 would be in the vicinity of $9,000,000. I expressed my appreciation of his efforts and said that the restoration of these cuts, which would make possible implementation of virtually the entire 1951 program, would be most heartening to the Thai Government and was bound to have a most favorable political and psychological reaction.

In discussing the 1952 program with Mr. Foster, he said that ECA had made every possible effort to obtain agreement for the inclusion in the 1952 budget of the $12,000,000 program which had tentatively been worked out by the STEM and the Thai Government. He said unfortunately these efforts had proved unavailing because of the adamant position taken by Treasury and the Bureau of Budget in view of the country’s favorable balance of trade. I inquired what tentative figures had been agreed-upon for 1952. He replied that it had not been possible to persuade Treasury to agree to more than $7,000,000 in grants. He added, however, that the Export–Import Bank was agreeable to extending loans to Thailand up to approximately $5,000,000 for approved projects. Mr. Foster emphasized that these figures were tentative as was the entire economic aid program for 1952 and that everything depended on the Congress. He added that depending on the legislation finally passed by the Congress, it might be possible to make some adjustment in the program for Thailand. I said this news was disappointing, although I fully understood the difficulties involved. I said it was incomprehensible to me why the political reasons for giving maximum economic aid to Thailand were not given greater weight by the Treasury and the Bureau of Budget.

I then asked Mr. Foster, with respect to the 1952 program for Thailand whether it would not be possible, after the 1952 American Aid Bill had been passed by Congress, to include in the announcement regarding Thailand some statement indicating that an Export–Import Bank loan of approximately $5,000,000 would be given favorable consideration by the Bank upon application by the Thai Government. I said this question had been raised by our Embassy at Bangkok in a recent telegram which pointed out the unfavorable reaction which might be anticipated on the part of the Thai Government to the publication of figures covering the 1952 aid program showing that Thailand [Page 1614] received less than any of the other countries of Southeast Asia.1 Mr. Foster replied that he saw no reason why information of the willingness of the Export–Import Bank to consider loan requests from the Thai Government should not be included in any announcement regarding the 1952 economic aid program for Thailand. He said that a statement along these lines had been issued in connection with the aid program for the Philippines.

The other matter I raised with Mr. Foster was the question of the heavy expense to the Thai Government of the administration of STEM. I said in a recent letter I had received from the Embassy at Bangkok they had informed me that almost 5 million baht had already been spent from Counterpart to meet administrative and operating expenses of STEM. Mr. Foster stated he realized how very important it was, particularly in countries like Thailand where ECA programs did not involve the sale of sizeable quantities of consumers goods, to keep the administrative and operative expenses at a minimum. He said, as did Mr. Griffin, that fresh instructions would be sent to STEM in Bangkok on this subject.

  1. Not printed; the telegram under reference is No. 2050 from Bangkok, June 9, (892.00–FA/6–951).