Foreign Relations of the United States, 1952–1954, Africa and South Asia, Volume XI, Part 2

493.918/8–353: Telegram

The Acting Secretary of State to the Embassy in India¹

secret

Washington, August 3, 1953—7:56 p.m.

128. Eyes only for Ambassador. We are trying in every possible way to work out a solution to the problem imposed on us by the thorium nitrate shipment and the mandatory provisions of the Battle Act. It is only this specific single shipment which causes us difficulty since informal commitments have already been received from the Atomic Energy Commission and FOA to purchase the annual production of thorium nitrate from India for at least a year, paying such price as is necessary, although it is hoped that some reduction in the direction of the current world price could be obtained from India. With regard to the shipment now at sea it is hoped, although there is no assurance of this fact, that FOA can be persuaded to accept some official statement, possibly by Pillai, to permit a decision on our part that the shipment of the thorium was not “knowingly permitted” within meaning of the Battle Act. So far the FOA authorities have been unwilling to do this and a decision on the highest level may be necessary with no assurance that it will be forthcoming. The only alternative of course is to cancel aid to India and renegotiate, with all of the difficulties inherent in this line of action. I am not by any means certain, however, that we will be able to avoid doing this and you should carefully prepare the way should this become necessary.

In the meantime request information as matter of urgency whether Pillai or similar official would be prepared to make official statement along following lines: (1) That recent shipment to China was intended for commercial purposes and not for atomic energy uses and that key officials unaware thorium nitrate was on prohibited list of Battle Act with related effect on continuation aid, and (2) that positive assurances will be given for administrative action to prevent future shipment to prohibited destination items on List I Battle Act. In return US prepared (1) give assurance there would be no release of above, although it should be understood might be necessary advise certain members of Congress in confidence, and (2) reopen negotiations US purchase thorium nitrate on basis suggested by Bhatnagar as reported Embtel 202, July 27.²

I know you have already made clear to Nehru and others that we are trying as hard as possible to help India without any infringement of her sovereignty and that we are confronted with a mandatory law in this country from which there is no escape. Matter has had Secretary Dulles’ personal attention prior to his departure and is now being handled personally by me. Since he knows me, Nehru should understand that we will go to great lengths to avoid even temporary cessation of aid or for its early reestablishment in the event the operation of our mandatory law makes cancellation necessary.³

Smith

1. This telegram was drafted and signed by Under Secretary of State Smith.
2. Not printed; the Embassy informed the Department that Bhatnagar had suggested the Department should urge the Atomic Energy Commission to resume negotiations with India but to offer better terms than previously for a contract obligating the United States to make extensive purchases of Indian thorium nitrate over the long term as a way to prevent a repetition of this type of episode (493.919/7–2753).
3. Ambassador Allen informed the Department in New Delhi telegram 253, Aug. 5, not printed, that Pillai had been provided with the suggestions set forth in the Department’s 128. Pillai confirmed the fact that the shipment to China of thorium nitrate was for commercial use; that Prime Minister Nehru had personally authorized the shipment; and that Pillai agreed that positive assurances for the future would depend largely on whether phraseology could be found which would take into account India’s concern for her sovereignty and U.S. concern for the implementation of the Battle Act. Ambassador Allen informed the Department that he was attempting to draft letters which he and Pillai could sign, subject to the approval of Under Secretary Smith and Prime Minister Nehru. (493.918/8–553)