Office of the Historian

421. Memorandum From the President’s Special Assistant (Rostow) to President Johnson1

Washington, February 16, 1967.

SUBJECT

  • Releasing Second Half of Indian Program Loan

Last spring you authorized an overall pledge of up to $335 million in non-project loans to India as part of George Woods’ deal to persuade the Indians to devalue the rupee and liberalize import controls. We pledged only $280 million and released the first slice of $150 million last summer. India’s self-help performance since then has been quite good in spite of the problems Mrs. Gandhi faces. Now AID is about ready to go with the second slice once Bill Gaud and Treasury agree on a few balance of payments details.

Bill’s normal timetable would be to authorize the loan sometime next week and to have the signing ceremony a couple of weeks after that. The Indian election will be over by 21 February, and there is no one time better than another in the next month. Therefore, I see no foreign policy reason for not letting him go ahead. However, you may prefer to hold off until after the Congressional resolution on food, which may not pass until just before the Easter Recess, even though this loan is not part of our food effort. I’d appreciate your guidance.

Just for your information, the second $70 million slice of the Pakistan loan which you approved right before Christmas should also be ready for signature within a week or two, but I see no problem there.

Walt

Go ahead with India signing when ready

Wait till after the Congressional resolution2

  1. Source: Johnson Library, National Security File, Country File, India, Vol. VIII, Cables, 9/66–2/67. Confidential. A handwritten note on the memorandum reads, “Rec’d 2–18–67, 1:20 p.” A handwritten “L” indicates that it was seen by the President.↩
  2. Johnson checked this option.↩