Foreign Relations of the United States, 1951, Asia and the Pacific, Volume VI, Part 2

398.14/8–951

Memorandum of Conversation, by Mr. Leonard S. Tyson, Office of Philippine arid Southeast Asian Affairs

restricted

[ Washington ,] August 9, 1951.

Subject: IBRD Loans to Thailand.

Participants:	OFD—Mr. Stinebower,1
	PSA—Mr. Tyson

I called Mr. Stinebower to ascertain the results of Mr. Thorp’s conversation with the IBRD regarding an additional five million dollar loan for Thailand² in order to cover the gap between the twelve million dollars which the Thais have been led to expect from ECA for the next fiscal year and the seven million dollars which the Congress has been asked to appropriate for Thailand. I asked whether Mr. Griffin’s telegram³ (Ecato Bangkok, 796, August 3) is consistent with Mr. Thorp’s conversations.

Mr. Stinebower explained in some detail the various conversations which he and Mr. Thorp had held with Mr. Lacy and once or twice with Mr. Landon. According to Mr. Stinebower, Mr. Lacy told Mr. Thorp that PSA fully appreciated and concurred in the E position that IBRD must be given an opportunity to turn down an additional five million dollars in loans before approaching the Export–Import Bank. During Mr. Lacy’s conversation with Mr. Thorp, he continued, Mr. Thorp indicated his belief that probably the IBRD would decline to grant the additional credits and that Mr. Thorp would do nothing to encourage the IBRD to wish to undertake the loan. Mr. Lacy understood, however, Mr. Stinebower said, that should the IBRD not wish to step out of the picture, that then we would have no alternative other than to go ahead with IBRD financing of the additional loans. Pursuant to these conversations with PSA, Mr. Thorp discussed the problem with Mr. Black and learned that the IBRD did not wish to defer to the Export–Import Bank. Mr. Stinebower said that he felt certain that this closed the issue and that in accordance with the earlier understanding with Mr. Lacy, the Department’s position must now be that the IBRD, rather than the Export–Import Bank should carry the additional lending. Mr. Stinebower added that we should be able to obtain copies of Mr. Thorp’s conversations with Mr. Black from Mr. Springsteen of ED.²

Mr. Stinebower had not yet seen Mr. Griffin’s telegram but judging from the substance of it, Mr. Stinebower felt that it was fully consistent with Mr. Thorp’s conversations and with the Department’s present position. His only comment on the propriety of Mr. Griffin’s telegram was on the fact that Mr. Griffin authorized Mr. Flegel⁴ to advise the Thai Government, at his discretion, of the results of Mr. Griffin’s conversation with the IBRD.⁵

1. Leroy D. Stinebower, Director, Office of Financial and Development Policy.
2. See the memorandum of conversation, by Mr. Malenbaum, July 17, and footnote 2 thereto, p. 1621.
3. Not printed.
2. See the memorandum of conversation, by Mr. Malenbaum, July 17, and footnote 2 thereto, p. 1621.
4. Austin F. Flegel, Chief of Mission, Economic Cooperation Administration, Thailand.
5. According to the files of the National Advisory Council on International Monetary and Financial Problems (Lot 60 D 137, Boxes 362–369), no IBRD loan was extended to Thailand during 1951.