41. Memorandum From John H. Holdridge of the National Security Council Staff to the President’s Assistant for National Security Affairs (Kissinger)1

SUBJECT

  • Representations by Thai Chargé on U.S. Interference with Thai Rice Deal

The Thai Chargé called on you this afternoon to pursue the matter of US interference with the sale by the Thai of 20 million tons of rice to the GVN, which lost them $2.5 million. [2 lines of source text not declassified]

The points which the Chargé stressed in his presentation to me were: (a) this is viewed by Thailand as a very serious matter (the word “blatant” was used in describing the incident,) (b) the Thai government is nevertheless willing to work closely with us to find ways in which the US might make “amends” by purchase of other goods from Thailand to an equivalent amount for use in aid to Vietnam and Laos, and (c) it is urgent that such amends be made by January 3–4 when the Vice President arrives in Bangkok “so that the circumstances of the Vice President’s visit will be the most favorable.” [2 lines of source text not declassified]

The amends business was suggested by Len Unger to Foreign Minister Thanat. [3½ lines of source text not declassified] Nevertheless, if anything can be done, I believe that appropriate steps should, in fact, be taken. The element of “face” is deeply bound into the situation, since the Thai Minister of Economic Affairs was actually in Saigon and the deal was all set to be concluded except for his signature when we intervened and killed it. I believe that they are smarting under what appears to them to be a low, and totally unexpected blow from a country which professes to be an ally. In addition, a great part of Thailand’s foreign exchange earnings comes from rice sales, and we have hit them where it really hurts even though their economy is not likely to collapse through loss of this one deal.

In my conversation with the Chargé, I simply told him that I would report carefully to you what he had said, and also expressed sympathy with the Thai position. I assured him of the constancy of our relationship [Page 91]with Thailand, and that we regarded the Thai as true friends and good allies. This, I said, was exemplified by the President’s remarks in Bangkok last July. I asked the Chargé if he had passed the word to the Department of State to which he informed me he had earlier today called on Under Secretary Johnson. The Under Secretary, it seemed, had taken the responsibility for having ordered the course of action which the U.S. had taken in this case.

As per your instructions, I have informed the Chargé that we will try to work something out by January 3rd.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 560, Country Files, Far East, Thailand, Vol. II. Top Secret; Umbra. Sent for information. Two notations in Kissinger’s handwriting read: “Let me call Allen tomorrow” and “Please move on this. HK”