Office of the Historian

48. Telegram From the Department of State to the Embassy in Burma1

Washington, June 28, 1956—8:56 p.m.

1306. Joint State–ICA message. You may inform GUB US has made review US assistance to Burma. In light this review you are authorized reoffer GUB following loans mentioned Deptel 9892 subject to negotiation mutually agreed upon projects: up to $25 million in dollar assistance and $17.3 million in local currency loans from sales proceeds under PL 480 agreement.

GUB may be advised program will be built up over period of time, exact size under ceiling depending upon demonstrated desirability of project proposals and experience gained in implementation of program. US anticipates no formal announcement will be made re contemplated size of program.

Although we recognize indication U Nu letter of interest in grants to be offset by token payment rice, you should indicate US preference for loan on grounds:

a.
US aid legislation still uncertain but strong Congressional sentiment exists favor loans rather than grants and possible legislation may contain no grant funds for Developmental Assistance;
b.
US acceptance token payment rice difficult for US view our own surplus.

However, if in course negotiations with Burmese you detect strong Burmese interest in at least some portion of US aid on grant basis (say $5 million) with token repayment in rice (say 10,000 tons) and you believe US interest would be greatly furthered by such [Page 77] action, Embassy should promptly advise Washington. Washington could then consider matter further in light of legislation as finally enacted.

Secretary’s letter3 supersedes paragraph 2 and Battle Act reference first sentence paragraph 3 Deptel 989.

Implementation loan agreement responsibility ICA and ICA personnel will be assigned to Embassy but ICA does not contemplate establishment mission as separate entity. Minimum of publicity would be given assignment ICA representatives.

If question long-range assistance arises you may point out: US is not in position to make commitments provide any country a specific amount of assistance for a specific number of years, but assistance less-developed countries in development their economies is cardinal principle US foreign policy, and record of US assistance to less developed countries in last decade ample evidence that it has vigorously implemented this policy and year after year has provided steady support to many such countries.

Dulles
  1. Source: Department of State, Central Files, 411.90B41/6–2856. Confidential.↩
  2. Document 31.↩
  3. See telegram 1307, Infra.↩