Foreign Relations of the United States, 1955–1957, East Asian Security; Cambodia; Laos, Volume XXI

9. Memorandum of a Conversation, Secretary Dulles’ Office, Department of State, Washington, January 27, 1955¹

Washington, January 27, 1955

PARTICIPANTS

• The Secretary
• Mr. Murphy, G
• Mr. MacArthur, C
• Mr. Waugh, E
• Mr. Nolting, S/MSA
• Mr. Sebald, FE
• Mr. Barbour, EUR
• Mr. Young, PSA
• Mr. Calloway, C

SUBJECT

• Meeting in Secretary’s Office on Handling of Economic Matters under the Manila Pact

Mr. MacArthur pointed out that certain Manila Pact countries and the Asian countries in particular want something tangible in economic terms to result from the Bangkok meeting. These countries believe that by joining a collective defense organization they have taken on additional liabilities and should receive special consideration in economic matters. Mr. MacArthur said there was a Pakistan proposal for accelerated economic development and a possible economic organization under the Manila Pact, a Thai proposal for a Manila Pact common development fund, and an Australian proposal² for a post-Bangkok meeting of experts to discuss Treaty area economic problems. He said all countries strongly supported the Colombo Plan and probably would not insist on creation of economic machinery under the Treaty, but he stressed that Asian countries wanted the Bangkok communiqué to indicate preferential treatment for the Manila Powers.

Role of Colombo Plan—Mr. Waugh mentioned that the Dodge Committee had substantially approved the NSC Ad Hoc Committee proposal on Asian aid with increased emphasis on the Colombo Plan and said he hoped the Manila Pact could concentrate on military and anti-subversion activities, leaving economic questions to the Colombo Plan. The Secretary agreed that we should not create a new organization. He suggested that since Colombo Plan arrangements for aid were ultimately bilateral it might suffice to state in the Bangkok communiqué that we would endeavor to give special consideration in the Colombo Plan forum to Manila Pact countries. Messrs. Murphy and Waugh warned that such a public announcement of preferential treatment would have most adverse political and propaganda effects. Mr. MacArthur agreed but pointed out our dilemma because the Asian Manila Pact countries wanted some such indication.

Stress on Existing Increases in Aid to Manila Pact Countries—Mr. Nolting commented that Pakistan, Thailand and the Philippines are in fact already receiving distinctly preferential treatment, particularly in the form of defense support funds. He suggested that if there were not too much pressure for a new organization under the Treaty we could accept the objectives of the Pakistan paper without creating new machinery. Under this scheme we could point to our increased efforts under the Colombo Plan for Asian economic development and cite existing aid figures as the differential for belonging to a collective security organization such as the Manila Pact. Mr. Waugh supported this idea and proposed that we try to influence people such as the Pakistan Ambassador to accept such an approach. Mr. MacArthur remarked that the Asian countries wanted public recognition of their special status and wouldn’t be satisfied so easily.

Meeting of Economic Experts—Mr. Sebald said he didn’t see any great harm in a meeting of economic experts and didn’t see how we could refuse this proposal. Mr. MacArthur also thought this might be a solution. The Secretary remarked that he was leery about such a meeting stating that the experts would feel compelled to make recommendations for more aid.

Use of Appropriate Resolution and Communiqué at Bangkok—The Secretary concluded the discussion by saying that he thought the problem might best be overcome by a communiqué at Bangkok which would state that: 1) the Ministers had considered economic matters at Bangkok; 2) representatives of the Treaty countries would maintain close and fraternal contact during regional meetings such as the Colombo Plan; 3) conversations on defense support activities would be carried on bilaterally; and 4) any special emergency problem of an economic nature could be referred to the Manila Council.

1. Source: Department of State, Central Files, 790.5/1–2755. Confidential. Drafted by William H. Gleysteen, Jr., who is not listed among the participants.
2. Additional information on the proposals mentioned here is in the collection of minutes of meetings of the Manila Pact Working Group, ibid., Conference Files: Lot 60 D 627, CF 432. The Working Group, made up of representatives from the Department and from the Washington Embassies of all the other Manila Pact powers, held its last meeting on February 7. For minutes of two of the meetings held during 1954, see Foreign Relations, 1952–1954, vol. XII, Part 1, pp. 1028 and 1038.