493.919/7–2853: Telegram
The Ambassador in India (Allen) to the Department of State
priority
209. I called on Prime Minister Nehru at 6 p.m. today, accompanied by Loftus, to discuss thorium nitrate shipment to China. After reviewing facts (about which there has been no dispute at any stage), I said I wished to emphasize seriousness of situation created by this shipment. I said I would not be carrying cut my responsibilities if I did not bring it to his attention in most friendly and straightforward manner.
Nehru said he had just reviewed dossier and was quite clear that even if GOI wished to do so, it could take no action now to recover present shipment, which had already been paid for and was on foreign ship in foreign port. He added that even if GOI could take such action, political consequences, both internally and in relations between India and China, would be so serious as to render it impossible.
[Page 1701]Nehru stated categorically and with some vehemence that India had never and would never submit to derogation of its national sovereignty in permitting United States law to determine with whom and in what commodities India could trade. I pointed out that the American Government had transmitted copy of Battle Act to GOI on December 17, 1951 and that technical cooperation agreement between India and US was signed on January 5, 1952. Consequently India had been fully aware of terms under which aid could be granted at time agreement was signed. I added that on several occasions during the past 18 months Embassy officers had discussed provisions of Battle Act with Indian authorities and that as recently as February 25, 1953 we had sent further formal note to India1 stating that Act remained in full force and specifically pointing out that there had been no change in items in Category A. Nehru replied that India had never agreed to attachment of political strings to aid and repeated that he could not accept the conditions of Battle Act as binding on India.
I said I had every respect and sympathy for sovereignty of India but that every nation which received US aid had accepted terms of Battle Act. Loftus said he was not aware that any other nation had ever regarded Battle Act as infringement of its sovereignty. I remarked that any international agreement between two sovereign nations involved some voluntary limitation on their freedom of action.
Loftus reviewed history of discussions with GOI on Battle Act, pointing out that early conversations had led us to believe that GOI understood our legal position just as we understood their difficulties in taking overt statutory action, therefore, we had proceeded in good faith, relying on our understanding that India would meet the requirements of Battle Act by administrative action. Nehru said that evidently there had been a misunderstanding on this point.
Nehru asked whether signature of truce in Korea had made any difference in operation of Battle Act. I said it had not. He remarked that many people in Europe felt peace could be advanced by extending trade. He agreed with this view, although he was aware that some felt otherwise.
I asked whether authorities who had permitted this shipment had been aware of 1–A list at time they issued permit. He said he did not know. As far as he personally was concerned, it was not brought to his attention. He could not say what other officers involved may have considered.
Nehru summarized discussion by saying that two question’s were involved. (1) What to do about the present shipment, and (2) what could be done about the future. As regards (1), he reiterated that nothing could be done. As regards (2), he referred to failure of GOI to reach agreement with US Atomic Energy Committee on purchase of thorium [Page 1702] nitrate but said GOI was still ready to discuss with US question of disposal of commodities of this kind and was prepared to cooperate broadly in this field. He specified, however, that India would never be willing to give guarantee with regards to disposal of its commerce.
I said I would report this statement to my government, and that whatever consequences might follow, I would for my part, deal with resulting situation in dignity and friendship. He smiled, said “of course” and conversation terminated.
- Not printed.↩