891.2546/7–254

The Director of the Foreign Operations Administration (Stassen) to the Secretary of State

secret

Dear Mr. Secretary: There are transmitted herewith, in accordance with the instructions of the President, a copy of his Memorandum of Determination with respect to the purchase of thorium nitrate from and related technical assistance to the Government of India, and a copy of my memorandum upon which this action was based.

Sincerely yours,

Harold E. Stassen

[Enclosure 1]

Memorandum by the President to the Director of the Foreign Operations Administration (Stassen)

secret

Subject:

  • Purchase of Thorium Nitrate from and Related Technical Assistance to the Government of India

In accordance with the recommendation contained in your memorandum of June 29, 1954, I hereby determine, pursuant to the authority vested in me by Section 303(a) of the Mutual Defense Assistance Act of 1949, as amended, that up to $2.2 million of funds appropriated pursuant to that Section may be used for the purchase of approximately 230 long tons of thorium nitrate (to be resold to [Page 1763] the Atomic Energy Commission) from and for related technical assistance to the Government of India. I further determine that these expenditures will serve to accomplish the policies and purposes of that Act, and are important to the security of the United States.

The Secretaries of State and of Defense, the Chairman of the Atomic Energy Commission and the Director of the Bureau of the Budget are to be notified by you of this determination.

Dwight D. Eisenhower
  • Recommended by: W. B. Smith
  • The Department of State
  • A. C. Davis
  • The Department of Defense
  • Jos. M. Dodge
  • The Director of the Bureau of the Budget
  • Lewis L. Strauss
  • The Atomic Energy Commission

[Enclosure 2]

Memorandum by the Director of the Foreign Operations Administration (Stassen) to the President

secret

Subject:

  • Purchase of Thorium Nitrate from and Related Technical Assistance to the Government of India

Thorium nitrate is a source material for fissionable atomic energy uses as set forth in section 5 (b) (1) of the Atomic Energy Act of 19461 and by virtue of that is listed on Title I, Category A, item 203(e) of the Battle Act. This listing requires that aid be terminated forthwith, without exception, to any country receiving aid which “knowingly and willfully” ships such a material to the Soviet Bloc. In 1953 a shipment of this material was made from India to Communist China, which I have found not to be knowing and willful. Diversion or sale of such material to the Soviet Bloc is possible in the future in the absence of extraordinary efforts on the part of this Government to the end of preventing such shipments and/or diversions from India.

Negotiations have been underway which, if successfully consummated, will enable this Government to make a pre-emptive purchase of the estimated Indian production in excess of domestic requirements for the next several years. The political situation in India does not permit obtaining adequate assurances from the Indian Government that there will be no shipments to the Soviet Bloc in the absence of this pre-emptive arrangement. We have sought in negotiating this arrangement [Page 1764] to provide the utmost security both as regards the disclosure of this arrangement and the achievement of a net result which will bring about a denial of fissionable materials of Indian source to the Soviet Bloc and the availability of this important material to the defense needs of the United States and the free world.

It is planned to purchase approximately 230 long tons of thorium nitrate at $2.20 plus duty per pound through a contract between the General Services Administration, on behalf of the Foreign Operations Administration, and the Government of India. The additional costs to cover a 30% ad valorem duty and administrative overhead bring the total estimated landed cost to $1,530,000. The Atomic Energy Commission has agreed to repurchase all thorium nitrate procured under this contract at the contract price of $2.20 per pound. In addition, in order to conclude successfully these purchase arrangements with the Government of India, it will be necessary to provide technical assistance for scientific and industrial research in the amount of approximately $670,000 (equivalent to $1.30 per pound of the thorium nitrate to be purchased from the Government of India).

Section 303(a) of the Mutual Defense Assistance Act of 1949, as amended, authorizes the President to expend funds in the General Area of China to accomplish the policies and purposes declared in that Act. It is recommended that up to $2.2 million appropriated pursuant to this Section be made available for use as needed to defray these costs.

Although there is no specific legislative provision which requires the submission of a program determination of this nature to the President for approval, it has been the consistent practice within the Executive Branch to seek such approval whenever an entirely new program has been proposed for implementation under the broad provisions of Section 303(a) of the Mutual Defense Assistance Act. Accordingly, it is recommended that the President sign the attached determination.

This recommendation has the concurrence of the Secretary of State, the Secretary of Defense, the Chairman of the Atomic Energy Commission, and the Director of the Bureau of the Budget.

Harold E. Stassen
  1. Also known as the McMahon Act, it was signed into law on Aug. 1, 1946, as Public Law 585. For the text, see 60 Stat. 755.