Foreign Relations of the United States, 1961–1963, Volume XIX, South Asia

90. Memorandum From Robert W. Komer of the National Security Council Staff to the President’s Special Assistant for National Security Affairs (Bundy)⁰

Washington, January 12, 1962.

McGB

South Asia Issues Decided at Meeting with President 11 January 1962

1. Kashmir Dispute. Upon the Acting Secretary’s proposal, the President agreed that we should propose to both sides a high-level mediator. It was agreed both sides looked to us on this issue. An effort will be made to get Eugene Black right away, with second choice David Lilienthal. To justify Black’s use, we could say that Kashmir dispute jeopardizes IBRD stake in Indus Waters settlement.

2. With respect to Pakistani Resolution in SC, the President felt that in view of his commitment to Ayub, we would have to vote for relatively innocuous Pakistani resolution in SC, and had better tell Nehru if necessary However, we should attempt to persuade Paks against SC, arguing that it would undermine our other commitment to Ayub to get Indians to negotiate. State is to get a letter off pronto to Ayub urging him to call off SC action.

3. Upon State’s recommendation, President approved going ahead and starting to release aid to India into the pipeline, after waiting a week. A small DLF loan for $5-6 million which had been pending for a long time would be a good thing to start with.

4. Military Sales to India. We should hold up action until after the Indian election to avoid helping Krishna Menon. In any case, even then we should hold off on big items like C-130s. The President wanted it emphasized to both India and Pakistan that their “arms race” was ruining our economic aid program by diverting their assets from economic development.

5. Commitment to Pakistan Consortium. The President was concerned about so much aid going to India and Pakistan, in contrast to Latin America, for example. He directed a restudy to determine whether we could tighten up and increase interest rates on long term development loans. The purpose would be to make it easier to sell larger aid programs on the Hill, recognizing that we wouldn’t actually get the money back anyway in many cases. However, we shouldn’t worry about problems which wouldn’t be upon us until ten years from now. The President did agree to go ahead on the $500 million commitment to Pak consortium, contingent upon remainder of $945 million being found elsewhere.

6. Pakistan and Transit Trade. The President was very reluctant to agree to the extra outlays ($150 a ton as opposed to $50) required to ship aid goods to Afghan over temporary Iranian route. He could not see why we should pay extra to ship what was after all aid to the Afghans. He agreed to the eight week moratorium proposal permitting US aid goods already in Pakistan to go forward by the direct route but reserved judgment on the Iran route. When Assistant Secretary Talbot pointed out that Afghans would not accept moratorium proposal unless we agreed also to go ahead with subsequent shipments via Iran route, the President’s inclination was to let them stew, and tell them that Congress would not accept such a huge increase in transport costs. However, he reluctantly accepted Talbot’s plea that we take a gamble for a few months, using a quarter of the estimated $2 million it would take to ship the remainder of our aid over the Iranian route during 1962.

Bob K.

0. Source: Kennedy Library, National Security Files, Regional Security Series, South Asia, 1961-963. Secret.