Foreign Relations of the United States, 1958–1960, South and Southeast Asia, Volume XV

277. Telegram From the Embassy in India to the Department of State¹

New Delhi, March 3, 1959—8 p.m.

2004. Ambassador returned Delhi February 27 after brief visit Kathmandu apprise King and top GON leaders of US offer of aircraft, attempt ascertain status Nepalese-Soviet aid negotiations and, if possible, counteract Soviet inroads.² Visit successful in Embassy’s opinion and justifies cautious optimism that we be able slow down Soviet offensive to extent keeping USSR out of field of aviation [2 lines of source text not declassified]. Highlights of visit were:

1) [2 lines of source text not declassified] King [less than 1 line of source text not declassified] responsive to Ambassador’s proposal for overall review GON’s needs next three, four years to determine whether they could be met from existing foreign aid. If additional assistance required, Ambassador suggested US, and possibly other foreign missions now in Nepal, might contribute balance thereby eliminating need another foreign mission. Desirability such review, especially in conjunction proposed monetary stabilization program readily accepted by Foreign Minister and Foreign Secretary with whom it also discussed. (Ambassador did not see Subarna who out of town on campaign tour.) Premature determine whether GON will actually undertake such exercise [3 lines of source text not declassified].

2) Exact status Soviet-Nepalese negotiations matter speculation but, from all indications, they not progressing too well from Soviet point of view. Soviet Delegation reportedly pressing for immediate conclusion broad agreement, but Nepalese resisting and demanding clarification all details before signing. King told Ambassador no definite agreement would be reached until after elections, while Foreign Minister twice stressed preliminary nature of talks, adding GON aware of risks of dealing with USSR.

3) GON’s fiscal and monetary difficulties finally appear to have penetrated Nepalese consciousness and for first time GON officials used word “bankruptcy” in discussing economic outlook. Concern manifesting itself in unusually energetic efforts of committee appointed prepare Nepalese recommendations for monetary stabilization program. Both Foreign Minister and Foreign Secretary emphasized importance embarking this program soonest possible. They informed US prepared consider any reasonable project which might strengthen Nepalese economy if accompanied by necessary fiscal, administrative and tax reforms.

4) Healthy Nepalese proud over way elections proceeding and unexpectedly large popular response. Results generating widespread interest Kathmandu Valley and have already given thinking Nepalese sense satisfaction and increased self-assurance over progress achieved to date in tackling country’s first major experiment in democratic processes.

Bunker

1. Source: Department of State, Central Files, 790C.5–MSP/3–359. Confidential. Repeated to Calcutta and Kathmandu.
2. Bunker was in Nepal, February 25–27. In despatch 1000 from New Delhi, March 4, the Embassy reported in detail on the Ambassador’s trip. (Ibid., 790C.00/3–459)