Office of the Historian

45. Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Robertson) to the Secretary of State1

Washington, June 25, 1956.

SUBJECT

  • Economic Assistance to Burma

Discussion:

The attached cables concern the reopening of economic assistance negotiations with Burma (Tabs A, B and C2).

On June 14, 1956 you indicated that a favorable response should be given to U Nu’s request for grant assistance in return for a token rice payment. You also noted that additional funds should not be requested [Page 73] quested but rather a sum of $5 million for this purpose should be taken from the $25 million already earmarked for dollar loans to Burma.

In view of Congressional sentiment and the possibility that grant aid appropriations may be seriously curtailed, Mr. Hollister has informed the Department of his reluctance to commit any funds for additional grant assistance programs and has asked that we discuss only loans with the Burmese at this time.

In the light of Mr. Hollister’s position and the difficulties involved in obtaining Agriculture’s concurrence to the token rice payment formula, it is suggested that Embassy Rangoon attempt to negotiate loan agreements with Burma, leaving aside the question of grant aid until Burma again raises the subject.

Recommendations:

1.
That you approve the above courses of action.3
2.
That you sign the telegram containing a personal message to Prime Minister Ba Swe as a follow-up to the communications between U Nu and President Eisenhower. (Tab B)4
  1. Source: Department of State, Central Files, 411.90B41/6–2556. Secret. Sent through Under Secretary Hoover, whose initials, indicating his approval, appear on the source text.↩
  2. The tabs, not attached to the source text, were telegrams 1305, 1306, and 1307 to Rangoon; Documents 47, 48, and 49.↩
  3. No indication of approval appears on the source text.↩
  4. All three telegrams were signed by Dulles.↩