493.919/7–2653: Telegram
The Ambassador in India (Allen) to the Department of State1
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193. Excon. Loftus had long extremely frank conversation tonight with Deshmukh re thorium nitrate case, drawing upon direct observation congressional attitudes these matters as reflected aid bill hearings (including lengthy off-record interrogation Loftus by Representative Battle re India’s attitude and compliance). Embassy made following points:
- (a)
- Reliance by India on possibility reinstitution aid under section 104 after termination extremely precarious;
- (b)
- Since general attitude of Congress not highly sympathetic aid to countries not clearly aligned with free world in terms reasonably concrete undertakings, disclosure India’s action this matter (if consummated) might jeopardize whole outcome non-military aid requests, and this raises question India’s responsibility in free world;
- (c)
- Time had come to clean away verbal confusions resultant India’s tendency to make official pronouncements re “aid without strings”.
- Re (a) above Embassy emphasized that, even if administration willing recommend immediate reinstitution aid under section 104 (which questionable in light public opinion re China trade questions) reprieve thus granted likely be only temporary for duration fiscal year 54, since sincerity India’s intentions cooperate with free world would be most closely and scrupulously scrutinized in any congressional consideration future aid request. Also pointed out that in any case reinstitution under 104 would as practical matter have to be preceded by explicit request on India’s part—which would mark end gentlemen’s pretence India not asking United States aid and which would create obvious political difficulties internally for India.
- Re (b), emphasized United States aid programs represent essentially pattern re-allocation world resources for freedom; hoped India would not by its separate action prejudice this general re-allocation.
- Re (c) Embassy said that aid could be said to be with strings if, after aid extended, United States asked for political action of some sort; but this had never been case. In fact, position was that Battle Act provisions were condition or circumstance precedent Indian acceptance United States aid since notification Battle Act requirements had been made to Kripalani in Washington on December 17, 1951, [Page 1700] whereas Indo-United States agreement signed Delhi January 5, 1952.2 These limitations on United States freedom of action in aid matters fully known to Government of India from outset joint economic development efforts.
Deshmukh agreed all preceding points sound and said would communicate them immediately to Prime Minister. Added gratuitous observation he thought United States Battle Act legislation entirely reasonable and sensible. Said main difficulty, perhaps insuperable, would be to find legal basis for off-loading cargo. This matter under intensive all night study by appropriate experts but he pessimistic about chance finding feasible solution. Deshmukh tried make considerable point of fact India has sold monazite to United States and argued quantities in that case much greater than now involved in China shipment. Embassy replied these matters very complicated from technical point of view and argument could be pursued indefinitely about strategic difference 500 tons monazite against one ton thorium nitrate. However, fact was thorium nitrate was extremely strategic commodity undoubtedly wanted for military ends and in any case absolutely prohibited under Battle Act for shipment in any quantity. Deshmukh assented this position in his view reasonable.
Interview concluded with reciprocal expressions hope that outcome no matter what it might prove to be would be accepted in dignity and without unjustified reciprocal recriminations.