791.56/7–653: Telegram
The Chargé in India (Drumright) to the Department of State
29. Embassy has received Government of India’s reply to request for final settlement under war surplus property agreement and for renegotiation of mid-1948 cut-off date. Re Embassy’s despatch 1797, February 17, 1953.
Government of India now confirms 25.122 crores of sales to end of June 1948, but some sales later cancelled or varied which change this figure to 23.96 crores net value, excluding customs duty. Realizations 23.92 crores. Deduction of rupees equivalent to $50 million (16.5 crores) leaves 7.42 crores divisible, of which US share 3.71 crores. This substantially checks with Embassy’s data.
Note mentions 7,495,000 rupee payment to US and 268,235 rupees received by US for four Dakota aircraft leased to Air India, which subtracted leaves 29,336,765 rupees payable to US.
[Page 1696]Refers to stores left in Pakistan, on which Government of Pakistan has reported sales of slightly less than 10,000 rupees by cut-off sales, in which two have resulted in adverse decisions relevant 9.71 lakhs, and remaining suit pending for compensation and damages of 6.8 crores. Says final settlement with US not possible until decision reached.
Says 36 crores sales to end May 1949 (middle 2 paragraphs, page 2 of enclosure 1, Embassy despatch 1797) included roughly 9 crores customs duties, making sales from cut-off to end May 1949 only 2 crores and not 11 crores.
Government of India note gives tonnage figures to show that by mid-1948, 96 percent vehicles, trailers and 77 percent other stores had been sold. Says its share of divisible portion through June 1948 (above $50 million worth rupees) only 3.71 crores against custodial and organizational costs of [garble] .25 crores. From cut-off to January 1953 costs were 5.83 crores against estimated realization of 6.4 crores. Future receipts from stores now remaining estimated 10 lakhs, with storage and sales costs bound to exceed this figure.
Says surplus transaction has, on whole, not been profitable, and that in circumstances perhaps Embassy will agree no purpose will be served in reviewing agreement terms for September US sharing of sales made after June 48.
Loftus carrying copies Government of India notes on his arrival Washington scheduled July 7.