14. Telegram From the Embassy in Burma to the Department of State1

123. Prime Minister asked me to call on him last evening. He started by saying he wanted explain his policy to me. After exposition his personal struggle between idealism and practical necessity for obtaining financial assistance for Burma he said he had sent Minister for Trade Development U Raschid to Delhi yesterday afternoon to request financial assistance of India. If India was unable grant request he would then have to turn to US and asked if we could help him.

Nu recalled that before his departure on world tour he had told me of his reluctance to accept his Cabinet’s recommendation that he seek an American loan. He had however instructed Cabinet drastically reduce estimates for next year’s budget during his absence. On his return he found out Cabinet had done so but had not gone far enough. He therefore insisted that further large cuts be made in estimates; therefore this had been done. His Ministers had accepted this willingly. They also told him they were willing accept additional cuts required in absence outside assistance but at same time pointed out serious effects such further cuts would have on country’s economy and security. Furthermore full impact would be felt just about one month before general elections taking place next April with possible disastrous results for his government. He therefore reluctantly felt obliged suppress his idealism and accept his Ministers’ advice request outside assistance.

India was only country he felt he could turn to other than US. If India could assist him he would still be able to talk strongly frankly to Chou En-lai with clear conscience that he was under no obligation to US. He thought it vitally important that head of at least one government should be in this position. Should he borrow from US he feared Chou would no longer completely trust him. Nevertheless if Indians could not assist he must accept fact and realistically turn to [Page 18] US for financial aid. Raschid would probably see Nehru today and be able to let him know very shortly outcome his conversation.

In reply to my query as to amount needed he said his Ministers told him that total would be about fifty million dollars. Robert Nathan who arrived Rangoon 8th had attended Cabinet meeting yesterday morning and talked to him privately afterward. Nathan indicated best source of loan would probably be Export-Import Bank as it would very likely be impossible get anywhere near amount desired from foreign assistance bill recently approved by President.

I told Nu that only assurance I could give him was that if he made request it would be given sympathetic consideration by my government. It was impossible to say however what if any amount would be available since we were now in a new fiscal year and situation since previous discussions this subject had changed. I did not yet know exactly what restrictions Congress had placed on foreign assistance funds. It might moreover be necessary request smaller amounts for specific projects. I would however be glad pass on his request when and if made and was sure that as result his conversation with President and Secretary they would understand his position and give request every possible consideration.

Nu had prefaced foregoing exposition of Burma’s serious economic situation with explanation of why he had taken so strongly a personal stand against requesting a loan. In addition to reasons of corruption reported Embtel 1146 May 192 (which he did not mention last night) he said that on departing on his world trip he felt passionate desire to make a contribution toward relaxation world tensions and maintenance peace, he therefore wanted be under no obligation to anyone.

Nu explained that talking to Chou En-lai and Chinese Communist officials was often very difficult. When in Peking last December he had received a telegraphic request from Sir Anthony Eden to take up with Chou En-lai question of releasing US airmen.3 British Chargé who passed on Eden’s message at same time sent him personal message that he thought time was inopportune because of violent press campaign being carried on in Peking against US at that time. Nu nevertheless felt desire to carry out Eden’s request. When he did so Chou reacted violently and was angry for a long time. He finally calmed down however and discussed matter more rationally. Moreover when Nu made his speech4 in which he praised US (which was [Page 19] only passage not receiving applause), Chou replied moderately and from that time on has no longer attacked American people. Further proof of Chou’s confidence in him could he felt be found in messages sent him while he was in US. He did not wish claim undue credit for himself but felt Chou had accepted his advice several times and trusted him and that he also had our confidence.

It was in view foregoing and in belief that if he was under no obligation to US he could continue to influence Chou that he had turned first to India. He asked me emphasize this point and expressed hope my government would understand and sympathize with his position.

Nu also remarked that if he obtained loan from US he could no longer feel clear in his conscience in giving US advice. To this I remarked that Nehru obviously felt no such compunctions since India had received a very large amount indeed of American assistance. His only reaction to this was to laugh. He added that for many practical reasons his government would prefer an American to an Indian loan.

In view tenor Nu’s remarks I gave him gist Secretary’s letter summarized Deptel 106,5 with which he seemed very pleased. Letter itself has not arrived yet.

I gathered impression that Nu does not feel very optimistic about obtaining desired amount of financial assistance from India. If such turns out be case he indicated he would get in touch with me again soon and I will then endeavor obtain more details regarding kind of loan desired and period over which he would wish receive it.

  1. Source: Department of State, Central Files, 790B.00/8–1055. Secret; Priority. Repeated to New Delhi.
  2. Document 7.
  3. Regarding U Nu’s intercession with Chou En-lai in 1954 concerning 11 U.S. airmen imprisoned in the People’s Republic of China, see telegram 390 from Phnom Penh in Foreign Relations, 1952–1954, vol. XIV, Part 1, p. 1039.
  4. In the speech under reference, made in Peking on December 10, 1954, U Nu declared his intention to work for understanding between the United States and the People’s Republic of China; the speech was summarized in telegram 463 from Rangoon, December 13, 1954. (Department of State, Central Files, 790B.13/12–1354) For U Nu’s description of the speech and its reception, see U Nu—Saturday’s Son, pp. 239–241.
  5. Telegram 106 to Rangoon, August 5, summarized a letter from Dulles to U Nu, which was pouched to Rangoon. (Department of State, Central Files, 790B.13/8–555) The letter, dated August 1, commented on a message U Nu had recorded for Voice of America broadcasts to Burma and reported that although Dulles did not expect any major results at the Ambassadorial talks in Geneva between representatives of the United States and the People’s Republic of China, the fact of talking about U.S.-Chinese differences might help prevent their developing for the worse. (Ibid., 790B.13/8–155) In a letter of July 14 to Dulles, Nu had urged the initiation of direct U.S.-Chinese discussions “at the highest possible level”. (Ibid., 790.00/7-1455) For documentation pertaining to the U.S.-Chinese Ambassadorial talks and information concerning subsequent correspondence between U Nu and Dulles on this subject, see volumes II and III.