Office of the Historian

452. Letter From the Ambassador in Laos (Parsons) to the Director of the Office of Southeast Asian Affairs (Young)1

Vientiane, June 25, 1957.

Dear Ken: I promised a few comments on your most interesting letter of June 4 on the meeting on the “Laos Outline Plan”.2 It is most encouraging to us to note the importance attached to Laos by the top people back home. We shall feel confident of support when we deserve it.

I particularly welcomed the emphasis given by the Under Secretary on foot dragging by Washington agencies. To you I would say that we have noted a distinct upswing in responsiveness from virtually all agencies back home over the past few months and I would give State’s efforts particular credit for that. There are two areas in which expedited action seems to me particularly desirable at the moment. One you have taken care of through your efforts with Captain Robbins and the promised telephone call from Walter Robertson to Mr. Sprague in Defense. Incidentally, a comptroller for PEO arrived last week—I hope a good one. The other area where we badly want hurry-up action is the one in which Mr. Hollister at the meeting in question rightly responded that it was not easy to lick the unfavorable exchange rate. Beginning I think last October or November, Carter de Paul and I set this forth as a problem of great urgency and I have at various times ruffled feathers I believe in repeating that it is just that and in viewing with some alarm academic approaches to it. With the visit of the IMF delegation and subsequently that of their boss, Dr Raj., I hope that we may soon, after nearly 8 months, be off dead center.3

As a footnote on the foregoing, I have my own private reservations as to the reaction of the Lao Ministers concerned when it comes to the point of really facing up to remedial measures. This thing has progressively further corrupted people in high places and the vested interests of all too many “Excellencies” may be involved. It is one of our more discouraging problems.

You will be interested to know that Rothwell Brown4 told me the other day that he believed that in the past three or four months, [Page 940] he has lately achieved a clear saving at the rate of at least 100 thousand dollars per annum through the prevention of graft on ANL travel orders to neighboring areas ($20,000 in June alone, an abnormally big travel month). You can see the profit possibilities, again thanks to the exchange cross rate between the kip and the baht. This would have been caught and stopped much sooner if PEO had been adequately staffed. There are many other loopholes to plug I feel sure, and in the end we shall count savings of considerably greater magnitude if PEO can do the job.

I agree with the comments which you made during the meeting, particularly with respect to reduction of the ANL and build-up of the police. You will remember that the U.S. agencies concerned went on record last fall as being willing to work towards a force level of 15,000 beginning a year after successful reintegration of the PL in accordance with our specifications.

The two versions of the outline plan5 have just come in and I hope to study them in the next several days. I thoroughly expect to find that these are excellent papers.

Best wishes as always,

Yours sincerely,

JEFF
  1. Source: Department of State, Central Files, 751G.00/6–2557. Top Secret; Official–Informal.↩
  2. Document 445.↩
  3. Although Laos was not a member of the International Monetary Fund, members of the staff visited Laos and prepared a draft report on the Lao financial and monetary situation. Dr. James S. Raj was Director of the IMF Asian Department. Documentation on the IMF in Laos and elsewhere is in Department of State, Central File 398.13.↩
  4. Head of the Programs Evaluation Office in Vientiane.↩
  5. Reference is to the abridged and unabridged versions of the Outline Plan.↩