Office of the Historian

530. Memorandum From the Officer in Charge of Economic Affairs, Office of Southeast Asian Affairs (Whittington), to the Deputy Assistant Secretary of State for Far Eastern Economic Affairs (Palmer)1

Washington, October 22, 1957.

SUBJECT

  • Aid Policy Toward Thailand

Bangkok’s 1056, October 52 (Tab B) recommends placing future aid commitments to Thailand on an ad hoc basis pending determination of the political direction of the new government which will emerge after the elections in December, 1957. We concur in the desirability of this approach on policy grounds.

We have discussed with the working level in ICA the specific steps proposed by the Embassy to implement this approach, and found agreement that they appear to be operationally and technically feasible for the next two or three months. Specifically:

1.
Project agreements (PROAG’s) for FY 58 will represent almost completely the furnishing of additional funds for projects already under way. Except as indicated below, information (to the extent available in Washington) indicates sufficient funds are available from prior years’ funds to continue DS projects without interruption for at least two or three months, and thus defer signing new PROAG’s:
a.
As stated in Bangkok’s 1056, additional funds are needed urgently for the Northeast Highway and should not be held up for political reasons.
b.
Delay in making available FY 58 funds may mean holding up the initiation of construction on the north end of the Bangkok–Suraburi Highway, but engineering can proceed with presently available funding. We would not consider it undesirable to have the start of construction delayed pending clarification of the political situation.
c.
Some FY 58 funds might be needed for the police program within a short time, especially if it is determined that the border patrol is running short of ammunition.
2.
As stated in Bangkok’s 1056, $4.7 million out of FY 58 non-project aid totalling about $16 million has already been made available to Thailand through the issuance of PA’s. It appears that further PA’s can be held up temporarily without reducing local currency availabilities below working level requirements.
3.
From Embtel 1056 comments on military aid program it appears that the possibility of using this program for political leverage is limited but that the Embassy and JUSMAG may make further proposals on the subject. On this basis Defense concurred in the draft outgoing telegram.

Recommendation:

That you sign the attached cable3 (Tab A) to Bangkok.

  1. Source: Department of State, Central Files, 792.00/10–557. Secret. Drafted by Mendenhall and Bushner and sent through Young.↩
  2. Not found attached to the source text; printed as Document 528.↩
  3. Not found attached to the source text; sent to Bangkok as telegram 1102, October 24, a joint State–ICA–Defense message, which reads: “Concur aid program approach proposed your 1056.” (Department of State, Central Files, 792.00/10–557)↩