890D.2311/6–1252

Memorandum of Conversation, by the Secretary of State 1

secret

Subject:

  • Pakistan’s request for wheat and Kashmir.

Participants:

  • The Secretary
  • Ambassador Avra Warren 2
  • SOA—Mr. Donald D. Kennedy

I asked Ambassador Warren what had caused the wheat shortage in Pakistan. He explained that this was not a recurring situation; Pakistan [Page 1820] had had some 400,000 tons in excess of its needs at the time of partition which had been sold mainly to Japan and Germany; the country was normally self-sufficient; but that last year there was a shortage and this year there would be another one because of various factors including some shift to cotton and rather serious drought conditions. The Ambassador also explained that although the request was for 300,000 tons of wheat, he believed 150,000 tons at a cost of around $15 million would be adequate since there was reason to believe that this amount would bring out the necessary additional quantities from private hoards.

On the matter of financing, Ambassador Warren explained that he understood MSA funds could be found although they were being held back for other programs; there no doubt would be some difficulty because of this. I asked if this was to be a grant; and the Ambassador replied that since the Pakistanis had requested a loan of wheat, it should be provided on a loan basis.

Dollars were necessary to make the wheat available since he was informed CCC would not ship without compensation. The next possibility was the Export-Import Bank but it would be very difficult to obtain the necessary funds from this source since they preferred not to enter into such transactions; the only occasion on which they had engaged in a loan for wheat was to Spain under Congressional pressure. Turkey had wheat which could be bought for sterling, but this was not considered desirable because (1) the Pakistanis had asked for our help and (2) the use of sterling would require gold settlement through EPU. Since arriving in Washington the Ambassador had learned that the Russians had approached the Pakistan Prime Minister with an offer of 400,000 tons of wheat, to be paid for with cotton and jute, now in surplus supply in Pakistan. The Prime Minister had not entered into any discussions as yet, and preferred not to.

Ambassador Warren said it was urgent to assist the Pakistanis in this respect. The need was there, we had adequate supplies of wheat with a bumper crop coming up, and it was the first time the Pakistanis [Page 1821] had ever asked for our help. Mr. Kennedy commented that we would be left in a particularly difficult position in Pakistan if we did–not do something because when India asked for our aid in obtaining wheat we went to great lengths to extend a $190 million loan on very easy terms. The Pakistanis would not understand a refusal to help them; and such refusal would be embarrassing because of the small amount of money involved as compared to what was done for India. I said I did not need convincing on this.

I indicated general agreement that we should assist Pakistan to obtain the needed wheat and asked that steps be taken in this regard.

Ambassador Warren said he wanted to discuss briefly Kashmir. He had had some very good conversations with Ambassador Bowles and Mr. Hickerson; the former was being very helpful. He thought that Dr. Graham and ourselves could be gotten off the hook if the two Prime Ministers met without agenda under Dr. Graham’s chairmanship. He and Ambassador Bowles should press the two governments to do this. Something might come of such a meeting; if not, we and Dr. Graham could not be censored since everything had been done to make success possible.

I said that I would like to talk about Kashmir more fully at a later time. The situation seemed to have changed considerably since I last discussed the problem.3

  1. This memorandum of conversation was drafted by Kennedy.
  2. Ambassador Warren was in Washington to discuss conditions in Pakistan with the Department of State. On June 13 he met with members of the Bureau of Economic Affairs and explained that he had advised the Prime Minister of Pakistan to withhold a formal request until Warren had completed his discussions in Washington. (Memorandum of conversation of June 13; 890D.2311/6–1352) 1352) Telegram 1345 to Karachi, June 14, informed the Embassy that an official of the Pakistan Embassy had transmitted a request for the U.S. Government to investigate the possibility of a loan of 300,000 tons of wheat, repayable in kind in 4 or 5 years. (890D.2311/6–1452) At a meeting with officers of the Department of State, held in the Department of Agriculture on July 21, Agriculture officials agreed that the wheat supply position of the United States would permit it to deliver 300,000 tons of wheat to Pakistan during the period from October 1952 to March 1953. (Memorandum of conversation of July 21; 490D.119/7–2152)
  3. For additional information on this topic, see pp. 1162 ff.