9. Telegram From the Embassy in Burma to the Department of State 1

1185. As Department will have noted from Embtel 11742 reception given Baldwin rice mission by GUB was more cordial and friendly than anticipated. GUB seems in fact very grateful to us for sending mission here to explain our position and its visit here was most successful in that respect.3

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GUB (which is in truly dire financial straits) has in effect thrown itself on our mercy. It is therefore of highest importance to our position here that assurances contained in three numbered paragraphs of Baldwin’s instructions,4 which have, of course, been passed on to GUB in course of meetings, be scrupulously observed.

In spite of friendly and understanding official reception given mission we can give no assurance that reaction, once actual sales of our surplus rice in this area become known, will not be extremely bitter. To judge from highly emotional and illogical Burmese reaction to problem Chinese irregulars we can only contemplate with great uneasiness the lengths to which attacks on US economic policy may go. I therefore urge that we delay to latest possible moment actual sales of surplus rice except possibly to Cambodia and Laos.

While realizing that decision dispose surplus rice was made at high level and only after lengthy discussions I nevertheless feel that President’s and Secretary’s attention should be drawn to potential dangers created by decision to sell surplus rice in markets important to Burma. As I see picture, Burmese people and to some extent government are being softened up for penetration and infiltration at rather alarming rate both by GUB mistakes and by Chou’s friendship with U Nu. While true GUB is still anti-Communist in its domestic relations we see indications of reversal of this policy. During Baldwin mission conversations, emphasis placed by Burmese officials upon policy of increasing trade with Communist countries was significant. Moreover, exceptionally cordial relations between GUB and CPR give latter a very favorable opportunity to exploit situation.

Burma with its great potential riches and small population plus access to Indian Ocean must offer great temptation to Chinese Communists. While it seems unlikely they will carry out an armed attack on Burma in foreseeable future, possibilities of political infiltration and economic penetration with eventual imposition of a semi-satellite status seem rather ominous unless present trend is reversed. Is it not therefore, rather illogical that while spending astronomical figures to maintain and strengthen our defense perimeter in the western Pacific we should for the few million dollars involved in sale surplus rice to Asia risk further loss our prestige here and pushing Burma closer to Communism?

If therefore, it were still possible delay sale any considerable quantity surplus rice in markets important to Burma while at same [Page 12] time, as soon as the climate were appropriate, we could find an acceptable method of giving Burma some of the economic assistance it so badly needs, we could I am confident strengthen our own position here and at the same time reverse present trend toward closer ties with the CPR. As it is, we are, by selling our surplus rice in this area, running definite risk of seeing a hitherto strongly anti-Communist government so weakened politically that it may be overthrown and Burma itself become a Chinese Communist satellite.

  1. Source: Department of State, Central Files, 0411.90B41/5–2855. Secret. Repeated to Bangkok. Copies were sent to Benson, Humphrey, and Dodge with covering letters, dated May 31, from Acting Secretary Hoover. (Ibid.)
  2. Supra .
  3. Telegram 1205 from Rangoon, June 2, reported on a conversation between Raschid and Embassy representative during which Raschid said he “felt rice mission visit had served no useful purpose.” He claimed that U.S. competition was “unfair” and that the United States must stay out of Asian rice markets. Although the Embassy representative reiterated the Embassy’s arguments, they had no noticeable effect on Raschid. The Embassy representative concluded that the Government of Burma, “after studying matter following departure mission, simply refuses accept idea any US rice can be sold in Asia without harming Burmese-American relations.” (Department of State, Central Files, 411.90B41/6–255)
  4. Reference is apparently to a letter of May 14 from Robert Murphy to Baldwin that included instructions for the delegation’s consultations in Thailand and Burma. (Ibid., 411.90B41/5–1455)