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FOREIGN RELATIONS OF THE UNITED STATES 1964-1968, Volume XXV South Asia
Department of State |
416. Telegram From the Embassy in India to the Department of State/1/ New Delhi, January 19, 1967, 1313Z. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, SOC 10 INDIA. Secret; Exdis. Passed to the White House at 10:55 a.m. Rostow's party included Heck, Schnittker and Martin Abel from Agriculture, and Walter G. Farr of AID/NESA. 10326. Pass White House. From Rostow and Schnittker. 1. At meetings today with Chaudhuri, Subramaniam, Mehta and ranking civil servants: 1. The Indian Government confirmed that it fully concurs in our approach to the solution of the Indian emergency food problem for this calendar year and succeeding years. It has instructed its Embassies in the capitals we shall visit to make appropriate representations. 2. FinMin Chaudhuri conveyed an expression of regret from the Prime Minister who was unavoidably out of town campaigning. Chaudhuri indicated her great appreciation for the President's letter/2/ and for the effort the President has undertaken in India's behalf, and Chaudhuri expressed his own appreciation of the President's interest. 3. We discussed whether we should aim for a single consortium meeting, or two meetings, one devoted to food and the other to the broader program of economic assistance. The merits of these alternatives might be explored during the week with the staff of the IBRD. We explained that this was a question we would keep in mind during our remaining consultations. 4. A fuller list of detailed points raised will be reported later by Embassy. /2/See Document 415. Bowles
417. Telegram From the Embassy in Italy to the Department of State/1/ Rome, January 20, 1967, 0837Z. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, SOC 10 INDIA. Secret; Exdis. Passed to the White House at 8 a.m. 3769. Pass White House, AID, USDA/AmEmbassy New Delhi. From Rostow and Schnittker. During a private conversation Thursday evening with Messrs. Subramaniam and L.K. Jha, the Ambassador and Leonard Weiss also being present, our tentative planning figures from American participation in the 1967 food delivery program for India were revealed in strict confidence. Both Jha and Subramaniam strongly urged an interim allocation at least sufficient to carry India's minimal food deliveries through June, taking other sources of supply into account. Problem of deliveries during second quarter of CY 67 also arose several times during our earlier discussions with Indians. They made point that all food deliveries in sight during first quarter totaled 2.3 million tons which is below target of 850,000 tons per month. To compensate for these shortfalls and reduced offloadings during monsoon GOI requires million ton arrivals monthly between April and June to meet 10 million ton target for year. As of now, with exception of Canadian offer and indicated interim US allocation no deliveries in sight after March. Subramaniam estimated needs during second quarter to be 3 million tons and both he and Jha urged that an interim allocation of only one million tons announced now would be politically dangerous especially for officials and ministers closely identified with economic liberalization policies. Pending assurance of supplies for April-June GOI considering a further cut in allocation to states during February which would reduce quotas to Bihar and in ration areas to 700 calories a day. Other subjects discussed during conversation will be covered in telegrams from Embassy Delhi./2/ /2/In a January 23 memorandum to Freeman, Schnittker also reported he found that Subramaniam and other Indian officials had grave reservations about supporting the idea of funneling food assistance to India through the India consortium. They were also concerned about the self-help requirements of the new Food for Peace legislation. (Johnson Library, National Security File, NSC Histories, Indian Famine, August 1966-February 1967, Vol. V) Reinhardt 418. Memorandum From the Under Secretary of State for Political Affairs (Rostow) to Acting Secretary of State Katzenbach/1/ Washington, January 27, 1967. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, POL 7 US/ROSTOW. Secret. Concurred in by Schnittker. Sent to the President under a January 27 memorandum from Katzenbach, stating, "I am authorized to say that Secretary Freeman and Administrator Gaud approve the recommendations in the report, as I do." SUBJECT Our party returned late Wednesday/2/ night from Tokyo, New Delhi, Rome, Paris, Bonn, London, The Hague and Brussels./3/ The list of capitals includes all the members of the Indian Aid Consortium except Austria and Canada. Austria has been consulted by the Ambassador, and Canada has been briefed in advance. /2/January 25. /3/Reporting telegrams from Rostow detailing the progress of his mission, which began in Tokyo on January 16, are in National Archives and Records Administration, RG 59, Central Files 1967-69, POL 7 US/ROSTOW and SOC 10 INDIA. Our posture throughout was that we were appearing in support of requests made by the Government of India, whose Ambassadors did in fact appear in each instance, and make the necessary case for aid. We explained that we were undertaking confidential consultations, as part of the process through which our Government and others could reach decisions on emergency food aid to India. We told the host governments that the President was considering a message to Congress on the subject, but would make no decision and take no action until this round of talks was concluded. His decision, we said, would turn in considerable part on the views of other governments. Except for Bonn, which will report its views within a few days, all the governments we saw authorized us to report: 1. That feeding India during the period of its transition to self-sufficiency in food should be accepted as an international responsibility; 2. That the consortium is a practical and successful device which should be used at this time; 3. That the emergency food plan for India should not be allowed to diminish the flow of resources coming forward under other development programs, but should be considered additional to the targets for each country suggested by the I.B.R.D.; 4. That in general the arithmetic we suggested seemed acceptable as a working basis for consideration, although it should be stressed that no government made a firm promise to meet its consortium quota. Each did, however, promise to make its best efforts to find the necessary funds indicated by the consortium plan, within the limits of existing or politically possible budgets. 5. All agreed that food aid should be planned on a relatively long-term basis, in the context of India's general economic plans, so as not to interrupt progress under those plans, or to justify a suspension of India's trade and investment liberalization measures. Everyone agrees that if the Indians have to use a good deal of their foreign exchange for food, they will be required to suspend their trade liberalization programs, as Pakistan has done. So far as Germany was concerned, no key ministers were in town when we arrived. We had a thorough briefing with officials and junior ministers. Their preliminary reaction was positive, despite the obvious restraint of Dr. Strauss' budget. We were assured an early decision, both in terms of the general idea, which they found attractive, and with particular reference to the offset possibility. The talks with the Government of India were positive. The doubts represented by Ambassador Nehru's position here were much in evidence. But at a meeting with Indian Ministers, we were told the Government of India was entirely satisfied with our explanations, and would take full responsibility for our position. Their main concern, in terms of their own planning, and their election, was that we publicly announce a sufficient interim allocation to assure minimal food supplies for the year. We were told that rations in Bihar and Utter Pradash will be reduced to 700 calories a day. We gave the figures about our own probable participation in the program only to Agriculture Minister Subramanian and to L.K. Jha over drinks at the Ambassador's house at the end of the day. The thought that we should now make an interim allocation of only 1 million tons fell like a stone. They said it would be exploited badly in the election. "Look", people would say, "those candidates have relied on the Americans, and this is all they could get." Subramanian emphasized that the pipeline would run out in March, and that there was literally nothing in sight for him to plan on at the moment except for what we could do now, and Canada later. With these considerations in mind, we strongly recommend a present interim allocation of 2 million tons. Anything less might spoil the political effect of the message in India; weaken Subramanian and other staunch friends; and, in some Indian minds, justify undoing trade liberalization. We believe the results obtained in these talks justify going forward with the proposal as planned in the earlier drafts of the message. If the message is to be released early next week, we should inform each of the consortium governments in advance, as well as Australia. We should also explore the possibilities of approaching the U.S.S.R. A separate message should go to the Government of India. We expect that follow-up work by the Indians and by our Embassies, together with the effect on each government of the favorable decision of others--notably the German commitment for $35 million, which we hope to obtain soon--should help move the total level of commitments towards a reasonable pattern of sharing. We are not able at this time to estimate these contributions with any degree of certainty; the most we can say is that food assistance mobilized under the Consortium will not be effectively translated into significant food grain deliveries before the second half of calendar 1967, and may, although substantial in amount, even then fall short of our goal of $120 million. The group accompanying me on the trip worked extremely well and enthusiastically. And the help of our Ambassadors and Embassy staffs was superb. They had prepared the way with imagination and zest, and I am sure they will follow up well. Recommendations: We recommend: 1. That the President proceed with his message to Congress for an international and additive effort to meet India's food needs under the general supervision of the World Bank Consortium. 2. That he announce in the message an interim allocation of 2 million tons of food grains to help fill the food gap of the next few months,/4/ avoid endangering Subramaniam and others we support, and permit India to plan without suspending its trade liberalization measures. (Note. Under Secretary Schnittker calls attention to the alternative possibility of providing an interim allocation of 1 million tons now and another 1 million tons a month from now.) /4/Another copy of this memorandum was revised by President Johnson to read: "1 million tons of food grains . . . of the next month" (Johnson Library, National Security File, Country File, India, India's Food Problem, Vol. 3) 3. That he also announce the approval/5/ of a $25 million grant under the PL-480 Title II for distribution by CARE and other voluntary agencies. The mission was asked about this program in New Delhi and its need seems clearly indicated. /5/Johnson changed recommendation 3 to read "That he also ask for the approval . . ." 4. That the President authorize the initiation of interim allocations of food grains by reimbursable Purchase Authorizations (PAs) so that shipments can begin immediately even though it will take several weeks to complete an agreement with India. 5. That we be authorized to proceed forthwith to work with the I.B.R.D. in planning the next meeting or meetings of the consortium, and in following up all member governments with Bank help to get government positions as firm as possible before the meeting. Eugene V. Rostow
419. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, January 27, 1967, 7:15 p.m. /1/Source: Johnson Library, National Security File, Country File, India, India's Food Problem, Vol. III. Secret. SUBJECT Gene Rostow's report (Tab A)/2/ lays the foundation for your message to Congress. He did not, of course, come back with signed pledges from the other consortium members for full matching. He did get agreement in principle, including agreement to go to work via the World Bank Consortium on the basis you outlined. The next step is to surface your program publicly via your message to Congress and to get the Congress aboard. Simultaneously, we'll push for a consortium meeting as soon after India's elections as possible. /2/See Document 418. We have a draft message (Tab B)/3/ as cleared by Freeman and Katzenbach. It could use some editing and shortening, but is a serious piece of work. /3/Dated January 27. Before editing, however, you will have to decide the key questions as follows: 1. Size of the interim allocation. At our meeting on 12 January you preferred 1 million tons. Gene's report in effect asks you to reconsider and recommends 2 million. When he discussed this in strictest confidence with Subramaniam and L.K. Jha, they told him that the smaller allocation would cut the ground out from under those leaders who have staked their positions on following the agricultural and economic policies we're pushing. The argument for 2 million tons, in addition to the political, is that we will need time to get the machinery Gene has activated into full swing. The Indians should unload about 5.3 million tons before the monsoon starts in late June. That means they need 3 million tons beyond what is in the pipeline; and it is most unlikely we can move to full sharing quickly enough to do the January-June job. Gene feels that we'll have greater leverage with the other consortium members if we don't appear to be unloading India all at once. 2. Sharing the burden for the rest of the year. Secretaries Rusk and Freeman and Bill Gaud have recommended (Tab C)/4/ that we use a planning figure of 6 million tons total U.S. contribution for CY 1967. They recommend that we phase into proportional burden sharing this way: /4/See footnote 2, Document 411. --2.3 million tons are already in the pipeline--1.6 U.S. and 0.7 other. --2 million tons at the time of your message would help keep the pipeline flowing, but India would still need to pick up another 1 million tons before 30 June. --4.7 million tons would be needed July-December, and we would plan to do half. Congressman Poage's recommendation/5/ was similar to this--moving to matching by the second half of the year. /5/See footnote 3, Document 411. In the message, we have deliberately described this formula vaguely--"a further allocation provided that the other countries of the world contribute their proportionate share." This way, we don't tip our hand on amounts for the rest of the year and we don't tie our hands with the Congress. Gene made clear to our consortium partners what we expect; but it seems wise in a prolonged negotiation of this kind to maintain maximum flexibility. 3. What we ask Congress for. Charlie Schultze has explored the possibility of seeking an appropriation. As I understand him, he fears that approach will severely limit your maneuverability and recommends you consider alternative ways to meet your objective. I will send you Charlie's memo setting out the alternatives as soon as he has signed off./6/ You will want to read it carefully. /6/Memorandum from Schultze to the President, January 27. (Johnson Library, National Security File, NSC Histories, Indian Famine, August 1966-February 1967, Vol. IV) 4. The CARE program is tentatively included in the draft message, and we need your final yes or no on this. 5. Reimbursable purchases. If you plan to hold this message past the first of the week, Secretary Freeman would like to tell the Indians to start buying grain and booking ships on a reimbursable purchase basis, if and when Congress acts. 6. I recommend a meeting tomorrow (Saturday) for you to hear argument and decide these matters, if you so wish. Walt Set up a Saturday meeting/7/ /7/Johnson checked this option.
420. Circular Telegram From the Department of State to Certain Posts/1/ Washington, February 2, 1967, 3:38 p.m. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, SOC 10 INDIA. Secret. Drafted by Mary S. Olmsted (NEA/INC); cleared by Handley, Heck, Deputy Assistant Secretary George S. Springsteen (EUR), O'Neill (USIA/IAN), Hirsch (USIA/IPS/EO), and Wriggins; cleared in draft by Fried, Novak, and Farr; and approved and initialed by Eugene Rostow. Sent to Bonn, Brussels, The Hague, London, Paris, Rome, Tokyo, Vienna, Canberra, and Ottawa and repeated to Cairo for Ambassador Battle, New Delhi, Moscow, and Rawalpindi. 129901. Subject: Indian Food Aid. Ref: Depcirtel 127928./2/ /2/Circular telegram 127928, January 30, sent to the same posts as telegram 129901, circulated an interim report on the Rostow mission. (Ibid., POL 7 US/ROSTOW) 1. Rostow mission presented its report on results of trip to President Johnson January 28. 2. Today President has sent message to Congress reviewing situation and outlining our next steps./3/ (See Wireless File for summary.) U.S. will provide two million tons grain under PL-480 for interim allocation. President asked Congress approve U.S. commitment to share fully in international effort and proposed U.S. allocate up to three million tons more provided that it is appropriately matched. President also recommended approval of allocation of $25 million emergency program in drought-stricken areas to be administered by CARE and other voluntary agencies. /3/For text, see American Foreign Policy: Current Documents, 1967, pp. 757-763. 3. Presidential message strongly stressed: (a) Self-help--"I am convinced that the War on Hunger can be won only by the determined efforts of the developing nations themselves." "India must herself take prompt steps to increase her fertilizer investment and production and improve distribution." (b) Multilateral approach--"We must support the Indian Government's efforts to enlist the aid of other nations in developing a systematic and international approach to the problems of Indian agriculture." (c) Coordination through the Aid India Consortium organized under the chairmanship of the IBRD. (d) Additive nature of food aid so that this program will not diminish flow of resources for other development programs. (e) Matching--Additional foodgrain will be allocated "provided it is appropriately matched." 4. These are all points accepted in principle by countries visited by Rostow mission. Now that USG has laid its cards on table we hope other countries will begin to translate their agreement in principle into action by series of announcements of donations of food, fertilizer, shipping, or added program assistance. You should approach host Government to inform them of Presidential message and leave no doubt that we now expect other countries to do their share./4/ /4/Bowles reported on February 3 that the reaction to the President's message in India had been excellent. He stated that key Indian leaders deeply appreciated the vote of confidence in their efforts. (Telegram 11129 from New Delhi; National Archives and Records Administration, RG 59, Central Files 1967-69, SOC 10 INDIA) On February 6, Congressmen Poage and Dole introduced resolutions in the House of Representatives supporting the President's message on food assistance for India (House Joint Resolutions 262 and 267), and Senators Miller and Gale McGee introduced a similar resolution in the Senate (Senate Joint Resolution 29). Rusk
421. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, February 16, 1967. /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. SUBJECT 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 /2/Johnson checked this option.
422. Telegram From the Department of State to the Embassy in Pakistan/1/ Washington, March 3, 1967, 6:51 p.m. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, AID (US) 15-8 PAK. Confidential. Drafted by Guy C. Mallett (NEA/PAF); cleared by Horbaly (USDA/FAS), and Palmer (AID/NESA); and approved by Spain. Repeated to Lahore and the Embassy Office in Karachi. 148588. 1. Deputy Chairman Planning Commission MM Ahmad accompanied by Ambassador Hilaly met with Agriculture Under Secretary Schnittker and Assistant Secretary Jacobson March 2 with requests for 250,000 tons wheat for FY '67 (Hilaly) and 1.5 million tons for FY '68 (Ahmad) with deliveries of latter to commence in June./2/ /2/During his visit to Washington Ahmad pressed his request for food assistance for Pakistan in meetings with Eugene Rostow on March 6, with Wriggins on March 6, and with Jacobson on March 10. (Ahmad's meetings with Rostow and Jacobson were reported in telegrams 150823 and 153129 to Rawalpindi, March 8 and 10 respectively; ibid.; his meeting with Wriggins was summarized in a March 6 memorandum from Wriggins to Walt Rostow; Johnson Library, National Security File, Country File, Pakistan, Vol. VII, Memos, 10/66-7/67) 2. Schnittker agreed to look into both requests. In regard to FY '68 request and timing of these deliveries Schnittker said, in the context of U.S. supply situation and forthcoming consideration of global requests, that "we'll do our best on the timing." 3. Ahmad's presentation of food situation followed same lines as earlier talk with Gaud (reported separately) and he provided same Aide-mémoire./3/ He stressed two additional points (1) GOP approval of policies and resources for agricultural production which would enable FY 1970 to be last year of concessional wheat imports, and (2) provisional decision to shift to local currency convertible payment as follows: FY '68 one-third, FY '69 one-half, FY '70 three-fourths. /3/Not found. Rusk
423. Telegram From the Department of State to the Embassy in Pakistan/1/ Washington, March 11, 1967, 1:13 p.m. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, POL INDIA/PAK. Secret; Priority; Limdis. Drafted by Coon and Laingen on March 10, cleared by Spain, and approved by Handley. Also sent to New Delhi and repeated to London, Moscow, and CINCMEAFSA. 153467. For Ambassador. Ref: Rawalpindi's 3349,/2/ New Delhi's 12963./3/ /2/In telegram 3349 from Rawalpindi, March 10, the Embassy reported that Foreign Secretary Yusuf had discussed a letter received by Foreign Minister Pirzada from Indian Foreign Minister Chagla. Chagla's letter, a copy of which was conveyed to the Department on March 15 by the Indian Embassy, was written in response to the opening offered by Ayub in a speech on January 28 at the Pakistan Institute of International Affairs in which he spoke of the need to divert the resources being used by India and Pakistan for the production of arms to the production of food and the necessities of life. Chagla expressed agreement with the sentiments expressed by Ayub and, on behalf of his government, suggested a meeting to discuss the question. Yusuf noted that his government had responded that it was prepared to discuss arms limitations, but only in the context of related political problems, in particular Kashmir. (Ibid.) The text of Chagla's March 2 letter was transmitted to New Delhi in telegram 156560, March 16. (Ibid.) /3/Telegram 12963 from New Delhi, March 9, summarized a discussion on March 8 between Bowles and C.S. Jha. Jha reviewed India's efforts to initiate discussions with Pakistan following Tashkent to improve on the spirit of the agreement. He read to Bowles the letter written by Chagla to Pirzada on March 2. Bowles commented to the Department that the Indian Government seemed to be making a genuine effort to resolve its differences with Pakistan. (Ibid.) 1. We are troubled at what appears to have been abrupt cold shoulder by GOP to Indian initiative picking up Ayub's public call for reduced arms expenditures and renewed effort lower Indo/Pak tensions. Paks can be skeptical of Indian motives if they like and can hold rigidly to insistence that "political" talks and arms limitation discussions must proceed simultaneously. However, we and other friends of Pakistan can hardly be expected to have much sympathy for policy that has effect of precluding any and all movement toward what we consider vital objectives (i.e., arms limitation and reduced defense spending). 2. We believe you should now seek opportunity convey our position to Ayub directly. You should say that USG regrets apparently negative attitude conveyed by Yusuf on an Indian proposal that rests on commendable public initiative on Ayub's part. You may say that we can appreciate GOP's determination not to be taken in by a "gambit". We also recognize Pakistan's problem in wanting to be able to point to some movement on Kashmir. 3. Pakistan cannot expect its friends however to go along with position that in effect rejects possibility movement almost anywhere unless something done simultaneously on Kashmir. Such position applied to issue as vital to Pak security as arms buildup strikes us as particularly unfortunate and counter-productive Paks own interest. Moreover, we find GOP position hardly one likely contribute to any flexibility in future Indian Government, whether Chagla stays on or not. USG hopes strongly that last word has not been said on Indian proposal by either party. 4. We do not believe you should link GOP response directly to policy problems in South Asian security field still pending with us here. But we hope you can find way discreetly to remind Ayub that what we can do for Pakistan (and India) is not unrelated to impression created official Washington of degree to which both countries genuinely interested in limiting arms race, irrespective but without prejudice to progress on other bilateral issues./4/ /4/Locke reported on March 15 that he discussed the Chagla letter with Ayub and made the points suggested in telegram 153467. Ayub indicated that he was unaware of Chagla's letter and said he would discuss it with Yusuf. He ruled out as politically impossible arms limitation talks with India that did not involve discussion of the Kashmir question. He did not rule out the possibility of secret talks however. (Telegram 3428 from Rawalpindi; ibid.) 5. For New Delhi: You authorized take appropriate opportunity convey to MEA our encouragement at Indian initiative and our hope GOI will persevere in effort but you should not inform Indians our exchange on subject with GOP. Rusk
424. Editorial Note The general elections held in India February 15-21, 1967, returned the Congress Party to power with a somewhat reduced majority. A number of prominent political figures were not reelected, most notably Minister of Food and Agriculture Chidambara Subramaniam. Indira Gandhi formed a new government on March 13. The most significant addition to her cabinet was Deputy Prime Minister and Minister of Finance Morarji Desai. M.C. Chagla, Swaran Singh, and Y.B. Chavan continued as Ministers of External Affairs, Defense, and Home Affairs, respectively. Jagjivan Ram replaced Subramaniam as Minister of Food and Agriculture.
425. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, March 16, 1967. /1/Source: Johnson Library, National Security File, Country File, Pakistan, Vol. IX, Memos, 5/68-11/68. Secret. A handwritten note in the margin reads, "Rec'd 11:35 a." SUBJECT As a follow-up to our "Tuesday luncheon" of Monday, March 13, Nick and Secretary Rusk would like to send out the attached telegram explaining the full military supply package for both India and Pakistan./2/ It is their understanding that on Monday the total package was agreed to. It is my recollection, however, that you agreed only to the spares for Pakistan, because of Gene Locke's change of plans. /2/As ultimately approved, the telegram was sent to New Delhi and Rawalpindi on March 31 as telegram 166539, Document 431. Proceeding with spares for Pakistan is necessary to fulfill our understandings with Ayub. But the South Asia specialists, as well as the Secretary, believe that to do something only for Pakistan at this time would be a mistake. We must balance this with meaningful steps in India particularly when we're also working on the Indians to sign the NPT. Secretary Rusk believes the total package should be approved and acted on, though the exact timing of each component should be left to the discretion of those closest to the problems on the subcontinent, depending upon progress made toward arms limitation. In addition to the spares for Pakistan, Secretary Rusk recommends the following as part of our overall effort to limit arms expenditures on the subcontinent: (a) withdraw the MAAG and USMSMI missions in Pakistan and India to dramatize that we are not, repeat not, returning to our earlier relationship with Pakistan. Adequate follow-on supervision could be provided through the military Attaché's office; (b) discourage the sale by third countries to India and Pakistan of equipment produced with U.S. technology, co-produced with us, or produced in the U.S.; (c) re-institute training slots for key Indian and Pakistani military personnel; (d) disperse remaining obligated '67 credit sales funds only where these will contribute to U.S. security interests, e.g. for Star Sapphire ground radar in India or to support the general policy on arms limitation; (e) permit credit sales on non-lethal items for both countries only on a case-by-case basis, depending on progress toward arms limitation, up to but no higher than $75 million for FY 68, a figure which would be not a target but an absolute ceiling and would not be communicated to either country. They argue that only if State has such chips to play in both countries will we have a real hope of getting commitments to limit arms. A piece-meal approach won't do; the whole must be available as part of the talk from the beginning. State and DoD agree on this balanced package. But Tom Hughes in INR, like Chet, worries about the Indian reaction and Dave Linebaugh in S/P thinks we are counting on getting too much from the Pakistanis for what is too small and too late. Nick is confident that the problem on the Hill is entirely manageable, although there have not been advance soundings because of the classification problem. In my view, we are not likely to get a more balanced or carefully thought-out package. As Secretary Rusk says in the attached recommendation/3/ to you, "I believe the problem was thoroughly reviewed, taking into account all the relevant points of view held within the Government." I think we should go ahead./4/ /3/Reference is to an advance copy of a March 17 memorandum from Rusk to the President, sent to endorse the attached recommendations of the Senior Interdepartmental Group concerning military supply policy toward Indian and Pakistan. (Johnson Library, National Security File, Country File, India, Vol IX, Memos and Miscellaneous, 3-7/67) /4/Rostow added a handwritten postscript that reads: "Given your letter to Ayub, this should ideally move forward very soon." Walt Approve whole package /5/Johnson checked this option and added the following handwritten note: "Let's talk about this on plane going out." His reference was to an impending trip to Guam to meet with officials of the South Vietnamese Government on March 19-20.
426. Circular Telegram From the Department of State to Certain Posts/1/ Washington, March 18, 1967, 5:31 p.m. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, SOC 10 INDIA. Confidential. Drafted by Rostow's Special Assistant Alan R. Novak, and approved and initialed by Under Secretary Rostow. Sent to Bonn, Brussels, London, Paris, New Delhi, Rome, The Hague, Tokyo, Canberra, Ottawa, Vienna, Helsinki, Stockholm, Oslo, and Copenhagen. 158201. India Food. 1. Passage of Congressional Resolution/2/ supporting President's India Food Program should be signal for renewed diplomatic activity in all country posts where possibility of obtaining food or food-related contributions to match food grains offered by U.S. Our objective to maximize commitments forthcoming at April 4 Consortium Meeting in Paris. /2/House Joint Resolution 267, "To support emergency food assistance to India," was adopted as P.L. 90-7 on April 1. (81 Stat. 7) Printed in American Foreign Policy: Current Documents, 1967, pp. 763-764. 2. It should be stressed that overwhelming support from both houses of Congress for President's program demonstrates depth and seriousness of U.S. commitment to this program. 3. Government of India asked to begin new round of diplomatic representations in coordination with our own efforts. 4. Previous support diplomatic efforts by Australians and Canadians most helpful. Effort should be made to enlist their help again. 5. Stress that various kind contributions acceptable so long as additive and helps free Indian foreign exchange for food purchases. Point out debt relief favorable contribution if on good terms and to be encouraged. Report progress as it develops. Rusk
427. Telegram From the Department of State to the Embassy in India/1/ Washington, March 22, 1967, 3:43 p.m. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, SOC 10 INDIA. Secret; Exdis. Drafted and approved by Rusk and cleared by Handley. A marginal notation reads: "OK/L," suggesting that the cable was cleared by the President. 160135. Eyes Only for the Ambassador from the Secretary. Just a personal comment on the occasion of the passage of the India Food Bill. It now becomes extremely important for India herself to put on a major diplomatic effort to mobilize resources from other governments. Although we shall try to be helpful, India must take the primary responsibility. Quite frankly, our own political capital is running out where we go soliciting other governments for financial help for somebody else. Further, India should discover for herself where the responsibility will lie if President Johnson's courageous action should fail to produce the necessary resources. It would be helpful if you could keep us closely informed as to the progress of India's diplomatic effort so that we can coordinate our own desire to be helpful./2/ /2/On March 23 Bowles reported that he had met with Subramaniam's successor Jagjivan Ram to discuss the food crisis. In the course of the conversation, Bowles stressed the importance of a vigorous diplomatic initiative by India to solicit contributions from other nations to match the food being contributed by the United States. (Telegram 13819 from New Delhi; ibid., POL 15-1 INDIA) Personal regards. Rusk
428. Telegram From the Embassy in India to the Department of State/1/ New Delhi, March 28, 1967, 1320Z. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, POL 15 INDIA. Secret; Priority; Exdis. 13991. For President and Secretary Rusk from Ambassador Bowles. 1. Mrs. Gandhi's new government stands at critical crossroads in domestic economic policy and in its relationship with USG. Variety of forces including determined and substantially strengthened parliamentary opposition, persisting food crisis, slow down in industrial growth, lag in exports and need to decide finally on size and shape of fourth plan, are forcing GOI to undertake fundamental reappraisal of its economic goals and policies required to achieve them. 2. That this reappraisal should occur on heels of recent election setback is neither surprising nor contrary to our interests. Indeed, on the plus side, we will be dealing with a strong Finance Minister who is favorably inclined toward us and generally well-disposed to economic policies we have been urging. Moreover, very magnitude of problems facing GOI has created a badly needed sense of urgency. 3. Major question mark among new leadership is ability and willingness of USG to support GOI's effort to speed rate of economic growth and particularly push forward with liberalized economic program which was adopted following devaluation. 4. Unfortunately, atmosphere in which estimate of future US stance is being made is heavily fogged by widespread public and parliamentary uneasiness regarding admitted and alleged CIA activities,/2/ persistent rumors about renewed US military supplies to Pakistan,/3/ and general concern about ability of USG to maintain required level of assistance here in view of demands in Vietnam. /2/Bowles attributed the political furor that developed in India over alleged CIA activities in part to Soviet-sponsored forgeries designed to exacerbate U.S.-Indian relations. (Telegram 13640 from New Delhi, March 21; ibid., POL INDIA-US) CIA Director Richard Helms sent a letter to Rusk on March 24 in which he noted that during the course of a debate in the Indian Parliament on March 23 on the CIA in India, several members of the Lok Sabha referred to statements made by former Ambassador Galbraith in his article on the CIA in The Washington Post on March 13. In that article, Galbraith wrote that CIA activities in India "were generally known to and involved no conflict with local authorities." (Ibid., Rusk Files: Lot 72 D 192, Secretary's Misc Correspondence) Helms sent a memorandum to the President on March 28 in which he noted that he had discussed with Galbraith the impact of his article in India. He told Galbraith that that article had "raised unshirted hell in India and has provided the central point of an acrimonious debate in the Lok Sabha." Galbraith professed surprise and dismay, and promised to be more discreet in future. (Central Intelligence Agency, Job 80-B01285A, DCI (Helms) Files, Chrono Jan-July 1967) /3/In telegram 13994 from New Delhi, March 28, Bowles added the following observation: "I am assuming that we do not intend to embark on a policy which would provide lethal military supplies to Pakistan. If we should do so we would utterly destroy the very real hope of negotiating the Indo-Pak arms ceiling which we have been pressing for so many months. In present atmosphere of doubt and suspicion engendered by sharp public and parliamentary reaction to CIA revelations, it would also jeopardize our relations with a new government which, with our support and a little luck, could emerge as more realistic and U.S.-oriented than any since independence." (National Archives and Records Administration, RG 59, Central Files 1967-69, AID (US) 15 INDIA) 5. Against this background it is important for us to make it clear to GOI and its leaders that we mean to do all we can to assist new government to get India on the move. Since leadership can move towards more liberal economic policies only if they feel confident about resources available, a US declaration of intent, perhaps by Gene Rostow in consortium context or in personal letter from the President to the Prime Minister, will provide a major shot in the arm. 6. In concrete terms I am hopeful (a) that we will be as forthcoming as possible at the critical India consortium meeting early April and (b) that we will make earliest possible decision in regard to additional food shipments before public and parliamentary anxiety again becomes focused on diminishing flow through pipeline. 7. Regarding consortium I am keenly aware of problems in respect to aid legislation. However, I believe that it is essential, in addition to non-project assistance required to sustain import liberalization program, that we provide a substantial amount from Ex-Im Bank for projects. (Note: until 1965 the Ex-Im pledged India about $50 million per year; since then it has contributed next to nothing.) Ex-Im project loans of say $150 million for each of next two years, on top of adequate [garble] non-project assistance to sustain import liberalization, would help give Indian economy and national confidence boost they urgently need at this stage. 8. In regard to food shipments pipeline appears assured through early June. While I recognize that additional 3 million tons approved in Congressional Joint Resolution are tied to appropriate assistance from other nations, I believe we should somehow come through with our full share early enough to avert another food price crisis which would have grave impact on central government and state-center relationships both of which are now extremely fragile. Three million tons would take India through the middle of September. By that time we expect that more normal rains and new technology will assure harvest which, with additional assistance from other nations (hopefully including Soviets), should cover all or almost all of rest of 1967. 9. While fragile is appropriate word to describe present situation here and while Mrs. Gandhi's government faces acute new political problems on top of perennial economic ones, I believe ingredients for dramatic economic progress are also at hand. Such progress will require our timely, substantial and astute assistance. It would, in turn provide a new and I believe more stable and mutually satisfactory basis for Indo-US relationships. Bowles
429. Memorandum From the President's Special Assistant (Rostow) to President Johnson/1/ Washington, March 30, 1967. /1/Source: Johnson Library, National Security File, NSC Histories, Indian Famine, August 1966-February 1967, Vol. IV. Confidential. A handwritten notation reads, "Rec'd 10:36 a." A handwritten "L" indicates the memorandum was seen by the President. Sent to the President at the LBJ Ranch in Texas as telegram CAP 67230, March 30. (Ibid., Country File, India, Vol. IX, Cables, 3-7/67) SUBJECT George Woods' consortium meets 4 April (a) to nail down matching food aid from other donors, and (b) to round up enough additional general economic aid to keep India's import liberalization program going until the consortium's October pledging session. Agriculture will top the agenda, but Woods will also use the meeting to keep up our end of the broad economic bargain he and Mehta made last spring with your backing. Woods concludes that the Indians have stuck to the terms of that deal, and meeting his targets is essential to keeping it alive. That general economic program plays an important role in the success of agricultural reform. It's essential to India's buying or producing its agricultural requirements, but it's also important to the politics of reforming the agricultural system. Mrs. Gandhi's new government faces hard bargaining with recalcitrant states to get them to go along with reasonable food-sharing programs. Her leverage comes from having outside resources to allocate to best developmental and political advantage and from her ability to produce the results consortium aid promises. Woods' main goal at this meeting--apart from rounding up matching food contributions--is to make a breakthrough in softening the terms of other donors' aid. This beginning attack on India's debt burden is crucial to forcing others to share the aid burden more fairly. If we don't soon solve that problem, India will be repaying some donors more than it gets in new aid, and our aid will just go to pay India's European creditors. The attached memos from Schultze and Gaud/2/ spell out a two-step strategy which includes a $33-48 million non-project Ex-Im loan on newly flexible terms and the offer of an early $50 million AID non-project loan (from FY 1967 funds) against our FY 1968 program. Gaud would come back to you before determining the size of that overall pledge and our share next fall. /2/Reference is to a March 26 memorandum from Gaud to the President and a March 28 memorandum from Schultze to the President, both entitled "The India Aid Consortium Meeting." (Ibid., India's Food Problem, Vol. IV) What they are asking you for now is authority to make these two limited offers. Since we've already made our big food offer, we're proposing just enough more in strategic forms to improve our leverage on both the Bank and other donors. Gene will lead our delegation and is fully aware of your overall objectives. We think this will give him enough to negotiate with. I recommend you use Schultze's memo (attached) as your decision document, since it details our conditions./3/ /3/Schultze's memorandum indicates that President Johnson approved the two proposed loans on April 2. Walt
430. Telegram From the Department of State to the Embassy in India/1/ Washington, March 31, 1967, 10:46 a.m. /1/Source: Johnson Library, National Security File, Memos to the President, Walt W. Rostow, Vol. 25, April 1-15, 1967. Secret; Nodis. Drafted by Handley on March 30; cleared by Battle, Heck, and Spain; and approved by Rusk. 166136. Personal for Ambassador from the Secretary. 1. You and Gene Locke should shortly be receiving a statement on our new policy regarding military supplies to India and Pakistan as well as instructions on how this policy should be implemented. On the instructions of the President, Secretary McNamara, AID Administrator Gaud and I, as well as other key officials have given long, serious and careful consideration to all aspects of this new policy. Your views have been taken into account by all concerned. 2. This has not been an easy decision but I am confident that what we are proposing is the right course for the United States to follow in the months ahead. We do not seek a military buildup in the subcontinent. There is too much of that already and India is far from being without blame. In fact our new policy has just the opposite objective. We believe that, together with our diplomatic, economic and food efforts, it is an essential element in our endeavor to divert Indian and Pakistani energies and substance from the arms race and channel them instead towards economic programs which could within a few years substantially improve prospects for economic and food self-sufficiency. We realize we cannot by our own actions bring this about. We will therefore enlist the help of the Bank, our allies, and, if at all possible, even the Soviet Bloc. 3. We fully agree with you that our objective in all this is an arms agreement between these two countries. Our efforts should be in that direction and we think we will be more influential in this process if our policy is broad enough to give us a wide range of inducements and incentives especially with the GOP. 4. We all recognize that our new policy could cause us immediate problems in India, but I urge you not to be defensive with the Indians. There is much in the new policy that should appeal to them. For example: A. We will be terminating grant military assistance to Pakistan and ending a basic military relationship we have had with that country since 1954. B. The withdrawal of MAAG from Pakistan (and USMSMI from India) will be publicly announced at an appropriate moment. C. The package will include funds for completion of Star Sapphire on terms far more concessional than we are offering elsewhere at present as well as a substantial credit sales program for non-lethal equipment. D. We are in fact reverting to a military relationship with both countries similar to the one we had in the fifties with India (when it was on friendly terms with Communist China and the Soviet Union). E. By being in a position to sell military spares to Pakistan, we will have an opportunity of slowing down the re-equipping of Pakistani military forces. Were we to continue to prevent Pakistan from maintaining for the time being its American supplied military establishment, we would surely be running the risk of a major, sudden expensive change-over and modernization process which would almost certainly be detrimental to Indian interests. The fact is that by this new policy we will be doing no more and indeed less than other suppliers of military equipment to India and Pakistan, i.e. Britain, France, Italy, Germany, Communist China and the Soviet Union. Moreover, we know we will be less forthcoming than other military suppliers because we intend to scrutinize requests more carefully than they do. 5. It seems to me that the GOI should see our new policy in the perspective of our total relationship with India, a relationship in terms of economic, food, political and other support that is clearly based on USG conviction that India is central to our interests in South Asia. Since World War II four US administrations have steadfastly supported the independence of India as well as massive American assistance to India's economic development. In the days immediately ahead we will be moving forward on a number of fronts and these should not be ignored or discounted. They include: A. $25 million total package for voluntary agencies. B. A non-project loan of $132 million. C. Project GROMET./2/ /2/Project GROMET was the code name for an Indian rain augmentation project initiated with U.S. support at the end of 1966. D. AID level discussions at the Consortium meeting in early April. E. Another tranche of PL-480 Title I shortly after the Consortium meeting. F. Continued diplomatic efforts to mobilize an international food program for India. 6. In the light of our changed relationship with Pakistan and considering the totality of our relations with India, I am confident that you can explain our new policy in such a way that the Indians will appreciate our objectives and will not forget the advantages that accrue to them through their overall relationships with the United States. Rusk [Continue with the next documents]
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