Office of the Historian

S/S–NSC files, lot 63 D 351, “NSC 5409—Memoranda”

Memorandum by the Executive Secretary (Lay) to the National Security Council1

secret
Washington, March 2, 1954.

Subject:

  • U.S. Policy Toward South Asia

References:

  • A. NSC 54092
  • B. Memo for NSC from Executive Secretary, same subject, dated February 23, 19543

The enclosed revised Financial Appendix for the reference report on the subject is transmitted herewith for Council information in connection with its consideration of NSC 5409 at its meeting on March 4, 1954.4 The enclosure supersedes the Financial Appendix transmitted by the reference memorandum of February 23 which should be destroyed by burning.

James S. Lay, Jr.
[Page 1121]

[Enclosure]

U.S. Policy Toward South Asia (NSC 5409)

Financial Appendix

summary

1.
Estimated expenditures for FY 1954 through FY 1956 total $366 million (Tables I–A and I–B).
2.
At the beginning of FY 1954, there was an unexpended carryover of $90.5 million available for proposed programs. Based on the current programming of appropriations already made for FY 1954 and requested for FY 1955, new funds of $280.1 million would be provided in these years, compared with expenditures of $208.5 million. There would be an unexpended balance of $162.1 million at the end of FY 1955 available for future expenditure.

Special Note: Amounts programmed as funds available are subject to future executive decisions to transfer funds from one program to another, and to Congressional decisions on current appropriation requests. All estimates are subject to the following assumptions, footnotes and detailed comments shown below.

Assumptions

1.
That the countries of South Asia will continue their own efforts to expand their economies so that U.S. assistance, though important will be only a small percentage of their own self-help efforts.
2.
That there will be no local war involving any of the South Asian countries within the period of the financial estimate.
3.
That although the threat of a general war between the Free World and the Soviet Union will continue, war itself will not materialize during the period of the financial estimate.
4.
That the increased aid projection for South Asia as shown in Tables I–A and I–B will not necessarily increase over-all foreign assistance expenditures if the anticipated decline in expenditures for Europe occurs.
[Page 1122]

Estimated Costs of the Proposed Policies

Table I–A. Expenditures By Program—FY 1952-FY 1956

(Millions of Dollars)

(Totals do not add because of rounding)

Actual Expenditures Estimated Expenditures
1952 1953 1954 1955 1956 Total
Economic Assistance (Total) 5.5 78.0 102.0 185.5
Afghanistan
Ceylon
India * * 1.5 65.0 86.0
Nepal
Pakistan * * 4.0 13.0 16.0
Technical Assistance (Total) 1.6 30.5 55.1 49.5 39.4 144.0
Afghanistan † .3 .6 .9 1.5
India 1.2 27.3 45.7 39.0 27.0
Nepal † .2 .4 .6 .9
Pakistan .3 2.7 8.5 9.0 10.0
Military Assistance (Total) ‡ 10.0 ‡ 10.0 20.0
Pakistan 10.0 10.0
Information Activities (Total) 4.2 4.1 2.5 4.1 4.1 10.8
Afghanistan .1 † † .1 .1
Ceylon .2 .2 .1 .2 .2
India 2.7 2.7 1.7 2.9 2.9
Nepal † † † † †
Pakistan 1.0 1.0 .6 .9 .9
Educational Exchange and Related Activities (Total) 1.5 1.2 1.7 2.1 2.4 6.1
Afghanistan † † † † †
Ceylon .1 † .2 .2 .2
India .8 .7 .7 .7 .7
India (Special)§ .5 .8 1.1
Nepal † † † † †
Pakistan .5 .4 .4 .4 .4
Total 7.2 35.8 64.8 143.7 157.9 366.4
[Page 1123]

Table I–B. Expenditures By Country—FY 1952-FY 1956

(Millions of Dollars)

(Totals do not add because of rounding)

Actual Expenditures Estimated Expenditures
1952 1953 1954 1955 1956 Total
Afghanistan (Total) .2 .4 .6 1.1 1.7 3.4
Economic Assistance
Technical Assistance ║ .3 .6 .9 1.5
Information Activities .1 ║ ║ .1 .1
Exchange Activities ║ ║ ║ ║ ║
Ceylon (Total) .4 .3 .3 .4 .4 1.1
Economic Assistance
Technical Assistance
Information Activities .2 .2 .1 .2 .2
Exchange Activities .1 ║ .2 .2 .2
India (Total) 4.7 30.7 50.0 108.3 117.6 275.9
Economic Assistance 1.5 65.0 86.0
Technical Assistance 1.2 27.3 45.7 39.0 27.0
Information Activities 2.7 2.7 1.7 2.9 2.9
Exchange Activities .8 .7 .7 .7 .7
Special** .5 .8 1.1
Nepal (Total) ║ .3 .4 .6 .9 1.9
Economic Assistance
Technical Assistance ║ .2 .4 .6 .9
Information Activities ║ ║ ║ ║ ║
Exchange Activities ║ ║ ║ ║ ║
Pakistan (Total) 1.9 4.1 13.5 33.3 37.3 84.1
Economic Assistance 4.0 13.0 16.0
Technical Assistance .3 2.7 8.5 9.0 10.0
Military Assistance ‡ 10.0 ‡ 10.0
Information Activities 1.0 1.0 .6 .9 .9
Exchange Activities .5 .4 .4 .4 .4
Total 7.2 35.8 164.8 143.7 157.9 366.4
[Page 1124]

additional factors not included in tables i–a and i–b

Economic Assistance

1.
An emergency food loan of $190 million was made to India at the end of 1951.5 To date India has paid approximately $5 million interest on this loan.
2.
An emergency wheat loan of $1.5 million was made to Afghanistan during FY 1953. The United States is now considering an additional request by Afghanistan for a grant of 20,000 tons of wheat and flour.
3.
Emergency wheat aid to Pakistan in FY 1953 involved a $15 million loan and a grant of a maximum of one million tons of wheat from the CCC stocks. Of the grant amount, 700,000 tons valued at $76 million is being shipped as rapidly as Pakistan can receive it. As of 10 February 1954, 86% of this tonnage had already been shipped and about 70% had arrived in Pakistan. The need for the balance of the one million ton grant has not yet been determined.
4.
Assistance to Ceylon was suspended after FY 1951 because of Ceylon’s shipments of rubber to Communist China. If the situation in Ceylon changes, technical and economic assistance may be resumed for FY 1955 and FY 1956.

Military Assistance

1. As of December 31, 1953, India and Pakistan had purchased military equipment in the United States under the Reimbursable Military Assistance Program amounting to the sum shown below and had secured these purchases with cash advances and letters of credit:

India $36.3 million
Pakistan $26.5 million

2. India’s purchases included 26 C–119 aircraft and 100 medium tanks.

3. Pakistan’s purchases included 352 medium tanks, 75 90mm gun carriages (M36) and various types of ammunition (up to 90mm in size).

[Page 1125]

Table II. Availability of Funds in Relation to Expenditures

FY 1953-FY 1955

(Millions of Dollars)

Total Economic Assistance Technical Assistance Military Assistance Information Activities Exchange Activities
Unexpended Carryover into FY 1954 90.5 §§ 89.3 1.2 ║║
Plus: FY 1954 Funds 138.7 75.0 38.1 ¶¶ 20.0 3.3 2.3
Equals: Total available for expenditures 229.2 75.0 127.4 20.0 4.5 2.3
Less: Estimated expenditures FY 1954 64.8 5.5 55.1 2.5 1.7
Equals: Unexpended Carryover into FY 1955 164.4 69.5 72.3 20.0 2.0 .6
Plus: FY 1955 Funds 141.4 105.0 29.5 * 4.7 2.3
Equals: Total available for expenditures 305.8 174.5 101.8 20.0 6.7 2.9
Less: Estimated expenditures FY 1995 143.7 78.0 49.5 10.0 4.1 2.1
Equals: Unexpended Carryover into FY 1956 162.1 96.5 52.3 10.0 2.6 8
  1. Copies of this memorandum and the enclosure to it were furnished to the Secretary of the Treasury, the Director of the Bureau of the Budget, the Chairman of the Joint Chiefs of Staff, and the Director of Central Intelligence.↩
  2. Dated Feb. 19, p. 1089.↩
  3. Not printed. (S/S–NSC files, lot 63 D 351, “NSC 5409—Memoranda”)↩
  4. See the memorandum of discussion, infra.↩
  5. Included under technical assistance in FY 1952 and FY 1953. [Footnote in the source text.]↩
  6. Included under technical assistance in FY 1952 and FY 1953. [Footnote in the source text.]↩
  7. Included under technical assistance in FY 1952 and FY 1953. [Footnote in the source text.]↩
  8. Included under technical assistance in FY 1952 and FY 1953. [Footnote in the source text.]↩
  9. Less than $100,000. [Footnote in the source text.]↩
  10. Less than $100,000. [Footnote in the source text.]↩
  11. Based on tentative assumption as to programmed funds in FY 1954. [Footnote in the source text.]↩
  12. Based on tentative assumption as to programmed funds in FY 1954. [Footnote in the source text.]↩
  13. Less than $100,000. [Footnote in the source text.]↩
  14. Less than $100,000. [Footnote in the source text.]↩
  15. Less than $100,000. [Footnote in the source text.]↩
  16. Less than $100,000. [Footnote in the source text.]↩
  17. Less than $100,000. [Footnote in the source text.]↩
  18. Less than $100,000. [Footnote in the source text.]↩
  19. Less than $100,000. [Footnote in the source text.]↩
  20. Less than $100,000. [Footnote in the source text.]↩
  21. Less than $100,000. [Footnote in the source text.]↩
  22. Less than $100,000. [Footnote in the source text.]↩
  23. Less than $100,000. [Footnote in the source text.]↩
  24. Less than $100,000. [Footnote in the source text.]↩
  25. Less than $100,000. [Footnote in the source text.]↩
  26. Expenditures from “Educational Fund, Interest Payments by the Government of India, State”; a program of grants and exchanges to rehabilitate the educational system of India. [Footnote in the source text.]↩
  27. Less than $100,000. [Footnote in the source text.]↩
  28. Less than $100,000. [Footnote in the source text.]↩
  29. Less than $100,000. [Footnote in the source text.]↩
  30. Less than $100,000. [Footnote in the source text.]↩
  31. Less than $100,000. [Footnote in the source text.]↩
  32. Less than $100,000. [Footnote in the source text.]↩
  33. Less than $100,000. [Footnote in the source text.]↩
  34. Less than $100,000. [Footnote in the source text.]↩
  35. Less than $100,000. [Footnote in the source text.]↩
  36. Less than $100,000. [Footnote in the source text.]↩
  37. Less than $100,000. [Footnote in the source text.]↩
  38. Less than $100,000. [Footnote in the source text.]↩
  39. Less than $100,000. [Footnote in the source text.]↩
  40. Less than $100,000. [Footnote in the source text.]↩
  41. Included under technical assistance in FY 1952 and FY 1953. [Footnote in the source text.]↩
  42. Included under technical assistance in FY 1952 and FY 1953. [Footnote in the source text.]↩
  43. Expenditures from “Educational Fund, Interest Payments by the Government of India, State”; a program of grants and exchanges to rehabilitate the educational system of India. [Footnote in the source text.]↩
  44. Less than $100,000. [Footnote in the source text.]↩
  45. Less than $100,000. [Footnote in the source text.]↩
  46. Less than $100,000. [Footnote in the source text.]↩
  47. Less than $100,000. [Footnote in the source text.]↩
  48. Less than $100,000. [Footnote in the source text.]↩
  49. Less than $100,000. [Footnote in the source text.]↩
  50. Less than $100,000. [Footnote in the source text.]↩
  51. Less than $100,000. [Footnote in the source text.]↩
  52. Less than $100,000. [Footnote in the source text.]↩
  53. Less than $100,000. [Footnote in the source text.]↩
  54. Less than $100,000. [Footnote in the source text.]↩
  55. Less than $100,000. [Footnote in the source text.]↩
  56. Included under technical assistance in FY 1952 and FY 1953. [Footnote in the source text.]↩
  57. Included under technical assistance in FY 1952 and FY 1953. [Footnote in the source text.]↩
  58. Based on tentative assumption as to programmed funds in FY 1954. [Footnote in the source text.]↩
  59. Based on tentative assumption as to programmed funds in FY 1954. [Footnote in the source text.]↩
  60. For documentation regarding U.S. aid to India under the India Emergency Assistance Act of 1951, see Foreign Relations, 1951, vol. vi, Part 2, pp. 2085 ff.↩
  61. Included under Technical Assistance. [Footnote in the source text.]↩
  62. Included in Information Activities. [Footnote in the source text.]↩
  63. Tentative assumption. [Footnote in the source text.]↩
  64. The amounts to be programmed under the proposed policy of military assistance to Pakistan cannot now be estimated [Footnote in the source text.]↩