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

574. Telegram From the Embassy in Thailand to the Department of State¹

Bangkok, December 18, 1960—2 p.m.

1048. Reference: Icato 594.² (Regret in spite high priority this subject reply reftel has been delayed because burden of work from Laos crisis.)

1. Based total DS availability for FY 61 of $19.5 million and my judgment priorities after careful consideration and detailed discussions and study with Country Team, I recommended:

a. Economic program be given $15,775,000. This would use $875,000 of the $2.5 million from contingency funds for economic program. It would still leave economic program lower than level sought country program book or Congressional presentation. I feel $15,775,000 is lower than desirable in view many economic and political considerations in Thailand already discussed other messages.

b. Military construction program be given $3,725,000. This less than $4.6 million JUSMAG deems minimum essential, and I believe less than desirable, although it is more than original Congressional presentation. I recommend cut from $4.6 million in FY 61 military construction funds solely on basis weighing priorities between military and economic programs for the $875,000 involved.

c. My recommendation, therefore, represents cuts both for economic and military construction programs occasioned by limited DS availability. Availabilities for both programs are, I think, less than desirable. Parenthetically I might note my understanding that had approval been given USOM, as requested Toica A–2472,/2/ for direct purchase baht at Bank of Thailand in place present commercial procurement program, local currency availabilities would be several hundred thousand dollars more in FY 61, thus occasioning smaller cuts military construction and economic programs.

2. My decision in part based TG’s own priority for economic development, and undesirability DS program, which understood by Thais to be economic program, to place too much stress on military aspects. Sarit for example probably believes DS funds are all for economic purposes. (This not without reason in light our previous public handling this subject here.) While I do not intend enlighten him, his own subordinates probably will do so, in which case I must be in position stress that economic aid to Thailand continues receive highest priority by USG.

3. Specific projects involved reaching my decision were following:

a. Economic programs which will be possible from $875,000 are feasibility and engineering surveys (585,000) which are becoming increasingly critical if Thailand is to be in position seek loans from US and international lending institutions, and bridge replace program (290,000), one of our more successful programs in Thailand. Since many of bridges involved are in northeast, delay this program also has major military implications. Economic programs which will be delayed by cuts from earlier requests are Bangkok–Bangkapi street improvement project, which while highly important has less immediate priority than other projects mentioned above, plus additional surveys in fields irrigation and highways, which have high priority but which must nevertheless be delayed.

b. According Chief JUSMAG military construction needs FY 61 are approx $5 million. This composed $4.4 million (for which $4.6 million price earlier had been estimated) plus $600,000 for work left undone FY’s 55–60 as result increasing costs. FY 61 availability will be only $3,725,000. Deferrals which I am informed will be necessary are: all RTA construction Bangkok, including barge site and facilities for 2nd Signal Battalion; RTA construction for dependent housing NCO’s and junior officers at Uttaradit, Saraburi, Petchburi, and Chumporn; POL pier Sattahip which will affect RTN fleet operation; and POL storage building and access road at Don Muang which will affect RTAF. While these projects essential and their deferral may cause serious operational and morale problems, I believe their deferral has less serious implications for US position Thailand than deferral economic surveys and bridge replacement.

4. With respect questions under B reftel, projects, both economic and military construction, deferred, not dropped. Implications for future year DS programs obviously dependent on fund availabilities those years. I would hope FY 62 DS program sufficiently large cover these deferred as well as other needs.

5. In view necessity complete FY 61 DS program would appreciate urgent concurrence recommendations this message.³

Johnson

1. Source: Department of State, Central Files, 792.5–MSP/12–1860. Secret. Repeated to CINCPAC for POLAD.
2. Not printed.
3. No action was taken by the Department of State during the remainder of 1960.