890D.2311/8–1852: Telegram

The Acting Secretary of State to the Embassy in Pakistan1


292. Suggest you express regret delay involved and inform PM US prepared extend 35 year, two and one-half percent loan for $15 million to Pak for purchase wheat (approximately 150,000 tons) in US as measure to assist Pak meet its critical need for food (Embtel 1402 May 20 et seq.).2 General understanding covering loan wld be discussed Wash and cld be taken care of by exchange [Page 1819] letters between Emb and Dept. Loan agreement and note wld be signed with Ex-Im Bank. This not, however, Ex-Im Bank loan since MSA auth involved making possible much better terms. World Bank official stated loan this character in his view wld not affect Bank’s loans to Pak now contemplated, while Ex-Im loan wld do so. This important consideration and of course in Paks interest in pressing its econ development. MSA funds so limited impossible get more than $15 million and it is hoped this much wheat will do job per PM’s comment in reftel and purchases already made other sources. Believe best raise question details understanding involved in Wash after indication Pak’s willingness proceed. Suggest GOP instruct its Amb open discussions with Dept.

Re PM’s comment (penultimate para Embtel 230 Aug. 18)3 Spanish loan was under direct Congressional mandate with specific reference in legis; UK loan made under special provision MSA legis relating to general instrs to MSA to extend ten percent of aid provided for in form of loan. Neither of these loans made under Ex-Im auth and policies.

FYI to use at ur discretion strenuous effort involved not only in Dept but in various agencies to arrive this conclusion which explains time taken. Hope GOP understands that US has made very great effort to help under difficult circumstances.

Vital there be no publicity this matter until understanding reached on details and you advised. Pls inform GOP re this.

Pak Emb informed.

  1. This telegram was drafted by Kennedy and cleared in the offices of Bryan (S/MSA), OFD, H, and NEA.
  2. Not printed.
  3. Not printed.