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FOREIGN RELATIONS OF THE UNITED STATES 1964-1968, Volume XXV South Asia
Department of State |
500. Memorandum From Edward Hamilton of the National Security Council Staff to the President's Special Assistant (Rostow)/1/ Washington, June 26, 1968. /1/Source: Johnson Library, National Security File, Agency File, SIG, Vol. V, 40th Meeting, 6/27/68. Secret; Sensitive. A handwritten note on the memorandum reads: "Mr. Rostow did not attend SIG meeting." SUBJECT The Problem You should try to read through the attached State papers--both the issues paper and the NEA position paper./2/ They are better than most. /2/"The Issues" was the subtitle of an undated 3-page paper drafted by Spain on June 21 and entitled "U.S. Military Supply Policy for India and Pakistan." The NEA position paper was an updated 7-page paper drafted by Spain, Prescott, and Coon on June 21 and entitled "US Military Supply Policy for South Asia: NEA's View." (Both ibid.) You know our present military supply policy in South Asia, announced in April 1967. We do not sell lethal end-items to either India or Pakistan; we do sell spare parts (which is meaningful only to Pakistan) and we concur in third-country sales on U.S.-controlled equipment, on a case-by-case basis, when we think the sale will not contribute to an Indo-Pak arms race or seriously disrupt the power balance on the subcontinent. We have used this policy to sell modest amounts of spare parts, including ammunition, to Pakistan and to approve two third-country sales--British jet aircraft to India, and Italian or Belgian-owned tanks to Pakistan. Nobody argues that this is a tidy policy. Both countries resent the arms embargo; it neither suppresses arms appetites nor effectively cuts off arms supplies in either country; it has encouraged both countries to turn very largely to Communist arms suppliers, with some undeniable political complications for us; it is especially hard on the Paks because they are American-armed and because the Indians have the political clout to close off all other suppliers except the Chinese and perhaps the French. When combined with the stresses induced by the Conte Amendment, this adds up to a constant and powerful irritant which is clearly poisoning our political and economic relations with both countries. The main question at issue now is whether this situation would improve if we change our policy to permit direct U.S. sales of end-items on a case-by-case basis. Ben Oehlert very strongly favors such a change, largely on the ground--formidable, in view of our experience--that third-country sales simply don't work as a means of keeping Ayub supplied with the arms he has to have to keep his throne and maintain some leverage with India. Chet Bowles argues precisely the reverse: that we should extend the embargo to spare parts and third-country sales and put our chips on helping the two countries toward self-sufficiency in arms production. NEA proposes a compromise solution weighted toward the Oehlert end of the spectrum: that we should permit direct sales where we can get substantial arms-limiting conditions--such as a ceiling on defense spending--and that we should make a positive technical assistance effort to encourage self-sufficiency in arms and introduce cost effectiveness analysis into both military programs. Merits I think everybody agrees that, all other things being equal, it would be very pleasant if the President had unfettered authority to make arms sales to India and Pakistan when and if they made sense. Most of us also agree that this authority would help, not hurt, our efforts to get both countries to be sensible about their military spending. Unfortunately, other things are far from equal. As matters now stand: 1. Even if we wanted to, we could not sell any jet aircraft or other sophisticated weapon to either country without making an equal cut in economic aid unless the President determined it to be vital to our security. This would be difficult in the case of India. It would be next to impossible for Pakistan. 2. Even if we wanted to, we would not be able to make credit sales--which are necessary if we are to be competitive on most items--after June 30 unless the military credit sales bill or equivalent authority is enacted. Even if it were enacted, the money we have requested is fully earmarked for other countries (Korea, Iran, etc.) where we have outstanding commitments. 3. There is no sign that the Congressional tide which last year produced a rash of amendments limiting arms sales to poor countries has run its course. Indo-Pak tension was an explicit and oft-cited example of the kind of thing the Congress is concerned about. However wrong-headed they may be about how to go about dampening arms races, we must face the fact that we have not persuaded them that arms sales are a good instrument to this end. As a practical matter, therefore, we could expect real trouble on the Hill if we proposed to make sales on the subcontinent. The question is whether we eliminate one of several major barriers to arms sales to India and Pakistan--and, whether the removal of one will strengthen or weaken the others. The scenario might well run as follows: 1. We would presumably make our policy public in connection with the sale of the second 100 M-47 tanks which we are now committed to try to get for Ayub. The reaction in India would be immediate and very strong. Our main argument to justify the Italian/Belgian deal for the first 100 tanks has been that we don't want to fuel Pakistani paranoia directly, but that we are prepared passively to concur when Ayub can be persuaded to buy old, cheap, U.S.-controlled equipment from others rather than new stuff from the French or the Chinese. This has consistently been labeled a smokescreen by many Indians; this change would expose it as just that. Bowles (overstating the case) now argues that the third-country tank deal may well "kill us" in India. Certainly, it is fair to say that a subsequent direct sale would cut our political influence--though perhaps not our economic policy influence--to the vanishing point. 2. The Paks would see this as a door thrown wide and would rush in with any number of requests for credit sales of high-powered weapons, particularly aircraft. (They have already given us a list of items they feel they must buy somewhere in the near future.) When confronted with the constraints presented by the Conte Amendment, the military credit sales problem, and the general attitude on the Congress, they and we would rapidly discover that all we can really do in the way of major sales are M-47 tanks. We could not, for example, supply the F-5's and F-104's Ayub wants. The resulting frustration could very well nullify whatever advantages flow from our policy change. 3. If and when the specific irritation of the tank sale to Pakistan settles down and the Indians looked seriously at the new policy, they would, in my judgment, probably still conclude that it was heavily weighted toward Pakistan. India is now almost entirely dependent on Soviet weapons systems for modern arms. She is committed to the maintenance procedures and systems involved. However much many Indians would like to balance things a bit, it would not make much economic sense for India to take on new and wholly different major weapons systems--even if we could make them available. Beyond that, U.S. cash sales couldn't possibly compete with Russian barter arrangements, which spread payment over 10 years. The real effect of the amendment would be to permit us to sell largely to Pakistan, which has no competitive alternatives--and no real threat other than India. In short, we could expect very little if any softening of the Indian position over time. Indeed, we could expect strengthening of forces in Indian politics which argue that we are out to rebuild Pakistan into a military threat and that India must build even greater military superiority over Pakistan. The result: higher Indian defense budgets--followed by higher Pakistani defense budgets. 4. Our determination to help the two countries become self- sufficient in arms--much as I wish it weren't--would be superfluous with respect to India and infinitesimal with respect to Pakistan. India now has about 30 ordnance factories, including a plant to manufacture MIG-21's. Pakistan doesn't even produce her own steel: it would be many years, even with heavy American aid, before she would be in a position to produce the weapons that worry us and worry the Indians. The current proposal talks only of technical aid. It is a nice gesture, but we can't expect it to be taken very seriously by either country. At best, it would worry the daylights out of the Paks. I suspect it is clear that I just can't see what benefits we could get through direct sales which would be worth the costs in the subcontinent and in the Congress. We should not delude ourselves; for the foreseeable future, the question reduces to whether we amend our overall policy in order to get 100 tanks into Pakistan. We cannot go a single step beyond that without knocking down other barriers which are largely beyond our control. I am a devout supporter of the proposition that a workable policy in South Asia depends on some means of getting a minimal flow of modern weapons into Pakistan without forcing a substantial reduction in U.S. economic aid. I am just as irritated and frustrated as anyone else by the delays of third-country bargaining. But it seems to me far preferable to try to make that approach work better with the second 100 tanks than to buy more trouble in India and on the Hill by offering direct sales. I do not believe it can be shown that U.S. interests have yet been badly hurt by Communist military sales to either country, or that, even if they have been, we are going to be in a position any time soon substantially to reduce those sales. Nor do I think it important to our interests, for example, to "be in on the ground floor" of the build-up of a largely superfluous Indian navy. The only real benefit involved is the expediting of the tank deal with Pakistan. I just don't think it is worth it. Timing We are all agreed that now is not the time to announce a change even if we decide on one. The aid bill would be severely threatened by an announcement; Katzenbach's upcoming talks in Delhi would be blown out of the water; and we don't need to provide the second 100 tanks immediately. Any announcement should wait until the Congress adjourns. One other timing factor occurs to me. I would argue that it would be a considerable disservice to a new President to inherit the situation I think this change may stimulate. If possible, I think we should let a new administration build its own policy in South Asia without this albatross./3/ /3/The Senior Interdepartmental Group met on June 27 to consider, inter alia, the question of a military supply policy toward the subcontinent. Ambassadors Bowles and Oehlert, both in Washington for consultations, participated. Bowles argued for the suspension of both direct and third-country sales of lethal weapons, and Oehlert argued for a more flexible military supply policy that would countenance direct sales where the situation dictated. Battle contended that, in light of the impending change of administrations and problems with Congress, it was a bad time to contemplate a change in policy. After discussion, the SIG agreed to recommend maintenance of the existing policy, and to encourage the tank sale by Belgium to Pakistan to meet Ayub's immediate problem. (Summary of discussion and decisions at the 40th SIG meeting, prepared by Katzenbach on July 5; ibid.) The SIG discussion and recommendations were summarized by Katzenbach in a July 3 memorandum to the President. (National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 12-5 PAK) EH
501. Memorandum From the Under Secretary of State (Katzenbach) to President Johnson/1/ Washington, July 5, 1968. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 15 PAK-US. Top Secret. Drafted by Spain and Major Wix on July 1 and cleared by Wolf, Battle, Curl (INR/RCI), and [text not declassified] (CIA). SUBJECT Recommendation: That Ambassador Oehlert be authorized to indicate to President Ayub your recognition of his problems and your willingness, despite the damage it will do to our interests, to agree to close out the Peshawar station, asking at the same time that in order to reduce the damage we be given adequate time beyond July 18, 1969, to close out the station along the lines suggested in the last two paragraphs of this memorandum./2/ /2/The memorandum does not indicate the President's response to the recommendation. A handwritten note by Harry Brock of S/S notes that the President's response to the recommendation was contained in his July 14 letter to Ayub which was transmitted to Rawalpindi in telegram 202058; see Document 503. The Deputy Secretary of Defense, the Director of Central Intelligence, and the Chairman of the Joint Chiefs of Staff concur in this paper. Discussion: President Ayub told Ambassador Oehlert in the course of a long and agitated statement on Peshawar on May 31 that the security of Pakistan requires that the United States communications station there be closed. Ayub's position confirmed the earlier delivery of a note by the Pakistani Ministry of Foreign Affairs and a public statement by the Pakistani Foreign Minister to the National Assembly that the GOP intended to terminate the communications facility when the present ten-year agreement expires on July 18, 1969. Ayub's statement seemed to overrule previous hints from the Pakistani Ministry of Defense that a way could be found to preserve the station--especially if United States military supply policy were to be changed to permit direct arms sales to Pakistan. When pressed by the Ambassador, Ayub said the only possibility he could think of, apart from complete withdrawal, was replacement of the present Peshawar station by a smaller, less visible installation in a different location under complete Pakistani control. The [less than 1 line of source text not declassified] Peshawar [less than 1 line of source text not declassified] is still important to the United States intelligence community and we would like to retain it as long as possible. A recent comprehensive technical assessment prepared under the cognizance of the Director of Central Intelligence indicated that Peshawar is substantially less important now than it was a few years ago and that the loss of intelligence on [less than 1 line of source text not declassified] can, to an acceptable degree, be offset provided that we can find alternative facilities elsewhere in the area, Iran being the most promising. From a technical viewpoint, [1 line of source text not declassified], but there is no realistic substitute facility available to obtain the information now derived on certain targets in [less than 1 line of source text not declassified]. This information, though desirable, is not vital in itself. Development of these alternatives presents certain technical and political problems. A contingency facility planned for Iran, for example, could not be ready before the spring of 1970 and we might not find it advisable to introduce into Iran the full number of personnel planned for this facility in accordance with the contingency plan for Peshawar (NSAM 348)./3/ However, it appears at present that alternatives are likely to be available at least to the degree where it would not be in our interests to offer a substantial price to Pakistan in an effort to maintain the facility at Peshawar. /3/See footnote 2, Document 340. For this reason, and because we feel that our basic policy decisions on economic aid and military supply should be made on the basis of broader United States interests vis-à-vis Pakistan, we do not believe that any major change in these policies is likely to be desirable for the specific purpose of affecting the Pakistani position on Peshawar. Ambassador Oehlert will, of course, make continued tactical use of our military sales and of our AID program in ways designed to help us get the most advantageous possible settlement of the Peshawar question. However, we do not believe prior decisions are necessary either to give Ayub something beyond that permitted by our present military supply policy in order to save Peshawar or to deny him something otherwise possible under this policy or under our economic aid program in order to pressure him into meeting our requirements on Peshawar. Within this framework, our purpose is to hold as much as we can at Peshawar as long as we can. Probably the most acceptable arrangement would be one in which we accepted Pakistani termination of the ten-year agreement as of July 18, 1969, but sought to arrange an indefinite additional period during which we would actually move out. During this period we might dismantle some of the antenna which are not essential to us, seek other ways to reduce the visibility of the activity, see whether or not the Pakistanis would be interested in some of the equipment which we do not want to relocate, and attempt to eliminate or greatly reduce our exclusion area so that the Pakistani presence on the base could be complete. Should Ayub insist on setting definite dates for completion of the move, we might first ask for a maximum of three years, aim at getting two, and settle for the most we get. The possibility of establishing some kind of smaller United States-operated facility, [1 line of source text not declassified] agreeable to the GOP, will also be explored. Ayub himself has already mentioned the possibility of Pakistani continuation of a part of the Peshawar operation in a smaller, less visible facility in a different location completely under GOP control. This too will be investigated. Detailed supporting guidance for Ambassador Oehlert's discussions with President Ayub is now being prepared. Nicholas deB Katzenbach
502. Telegram From the Embassy in Pakistan to the Department of State/1/ Rawalpindi, July 9, 1968, 0901Z. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 12-5 PAK. Secret; Exdis. 6039. Please pass White House. From Ambassador. 1. Spent an hour with Ayub after twenty minute session with McCormack and Griffith of COMSAT. 2. Several matters discussed will be covered septel./2/ /2/In telegram 6040 from Rawalpindi, July 9, Oehlert reported on the effort he made in the conversation with Ayub to point up the problems being experienced by a number of U.S. companies trying to compete in the Pakistani economy. (Ibid., FN 9 PAK-US) 3. Except for a few brief flashes of his old energy Ayub seemed disinterested and lethargic. He has lost more weight. He has definitely retrogressed since my last visit with him. 4. Upon departure COMSAT representatives Ayub said "The Foreign Minister is waiting. Would you mind terribly if I asked him to come in?" I responded "Mr. President, as you know, I had asked to see you alone but of course the decision is yours." He then said "It would save me having to take notes and repeat the conversation." He then sent for the Minister who came in with Mohiuddin Ahmad, the successor to Mansur Ahmad on the American desk, who took copious notes. 5. With respect to tanks, I assured him that the Belgian deal was still very much alive, pointing that: A. There had been bureaucratic delays due to the changes of government; and B. That the Belgians felt no particular incentive because they wouldn't make any money and had no public excuse such as they would have if the transaction provided work and profit. 6. I then suggested that he consider: A. Sending for the Belgian Ambassador and impressing on him both Ayub's deep personal interest and the needs and merits of the situation; and B. Offering to have half of the tanks rehabilitated in Belgium in order to provide incentive and to lessen burden of rehabilitation on GOP. 7. He seemed a bit vague about the status of the Belgian deal, commenting that the Belgians had indicated that they want to talk again but that so far they had not been willing to discuss reasonable prices and terms for rehabilitation. 8. He did not commit himself either re whether or not he would send for the Belgian Ambassador what response would be given to the alleged Belgian desire to talk again or what his reaction was to a half and half deal. 9. I did not indicate that if the Belgian deal fell through we would seriously consider a direct sale because I felt that to do so would cause him to drop the Belgian transaction in favor of direct purchase. 10. During the course of the conversation I pointed out the significance of the Conte-Long amendment, mentioning specifically that it would require us to make a deduction from aid for the acquisition of sophisticated weapons unless the President certified to Congress that the acquisition was in the national security interests of the USG, emphasizing that of course he could not do so with respect to weapons acquired from a Communist country so that such acquisition would mean in effect that GOP would have to pay a double price for such weapons. 11. On the Peshawar question, not having received my expected guidelines, I had nothing to try to sell so I contented myself by saying that: A. President Johnson had been greatly disappointed in the way the termination notice had been handled; did not and never had wished to embarrass Ayub unduly since he fully understood Ayub's problems; but believed that the matter could be handled to the satisfaction of the USG and GOP; and B. My government had been interested in Ayub's suggestion of "A smaller less visible installation in a different location under complete Pakistani control" and had requested me to explore that possibility fully. 12. At that point the Minister spoke up for the first time and said "Mr. President, may I make a comment?" Ayub acquiesced, whereupon the Minister said "While I was not present at the previous meeting I have studied the record very carefully and, Mr. President, you did not state the matter as the Ambassador has suggested." 13. With a flash of his former self Ayub said, somewhat heatedly "Oh yes, he did. That's exactly what I said. The Ambassador has quoted me exactly." 14. The Minister did not speak again on the subject. 15. Ayub then took up the conversation, saying: A. He had said exactly what I said he did, and he had meant it, but that there had been fresh developments since then; B. The Russians had since predicted that USG would suggest a smaller, less visible installation in a different place under GOP control, but that the USSR would know all about it at once and would consider it a very hostile act; and C. Therefore, sorry as he was about it, he could no longer consider that possibility. 16. After pleading surprise since the suggestion had been Ayub's own, I closed the conversation by noting that under the circumstances I would have to seek new instructions. 17. Comment: It seems clear to me that: A. Ayub's health has deteriorated; B. He has been carefully hemmed in by his Ministers and Secretariat (see septel re other matters brought up in which he would previously have shown great interest but which today he merely asked me to take up with Agriculture Minister Doha and Commerce Minister Hoti); and C. His Foreign Ministry is most hostile to USG. I have no doubt that someone in the Ministry, and I personally suspect the Minister himself, leaked to the Russians the suggestion Ayub had made at our previous meeting. 18. When I receive guidelines about "phasing out" I will of course seek a further audience to present them. FYI: Ayub's schedule calls for departure to Lahore and Karachi July 13, to Iran 20, to the UK 22. 19. Today's developments emphasize importance of a good word from Iran and Turkey, as suggested in Rawalpindi 6038./3/ /3/Oehlert suggested, in telegram 6038 from Rawalpindi, July 9, that Ayub's visit to Tehran July 20-22 would offer an opportunity for Iran and Turkey to encourage Ayub to extend leniency to the United States with regard to the facility at Peshawar. (Ibid., POL 7 PAK) Oehlert
503. Telegram From the Department of State to the Embassy in Pakistan/1/ Washington, July 14, 1968, 0009Z. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 15 PAK-US. Secret; Immediate; Nodis. Drafted by Katzenbach; cleared by Helms, Nitze, and Rostow at the White House; and approved by Samuel G. Wise (S/S-O). 202058. For the Ambassador. The following letter from President Johnson should be delivered promptly to President Ayub. "Dear Mr. President: In the spirit of honesty and frankness that has always been at the heart of our relationship, I feel I must tell you of my deep concern over the reports I have received during the past several weeks from Ambassador Oehlert about your Government's attitude toward our communications facility at Peshawar. I have delayed writing to you personally until now because I hoped that some mutually acceptable solution could have been worked out by this time. I was surprised and disturbed that your Government saw fit publicly to announce its position on the Peshawar facility before any real discussion between our two Governments was possible. And it was particularly distressing to learn that your Government's action may have been taken because of threats and demands by another power. I had thought that you and I shared a conviction that our own security--as well as the security of many other nations--was well served by our cooperation in maintaining the Peshawar facility. Accurate technical and scientific information on the intentions and capabilities of others can, as you know, be a stabilizing element in the present uncertain state of the world. In all frankness, the actions of your Government do not seem to me to be appropriate to the close relationship that has existed for so many years between our two countries and which has been manifested in our contribution of more than $3 1/2 billion in aid to Pakistan. I accept, of course, your right to terminate the 1959 Communications Agreement,/2/ although I would hope that even now you could reconsider that decision. I do want you to know, simply and unequivocally, that the closing down of the Peshawar facility in July 1969 will give us real problems. /2/For text of this agreement, signed in Karachi on July 18, 1959, see 10 UST 1366. In this connection, I must point out that this facility is a complex one. Some of its elements can be moved relatively easily. Others will take more time. Their hasty removal could result in significant gaps in our understanding of the intentions of others and thereby diminish the sense of security we both seek. If, however, your decision is firm, I would hope and expect that you might allow our representatives to discuss an arrangement whereby the various elements of the facility can be phased down and closed out in an orderly way during a period beyond the formal termination date of July 17, 1969. I have asked Ambassador Oehlert to convey these views to you and to be prepared to enter into full discussion of them at an early date. I cannot hide from you the fact that the loss of the Peshawar facility will be a real blow to what I believe to be our mutual interests. But I do think that if we can agree to arrangements that will permit a reasonable withdrawal period it will lessen the impact. Such arrangements, if arrived at through imagination and good will on both sides, would make the transition easier to accomplish. I do not think, old friend, this is too much to ask. Sincerely, Lyndon B. Johnson." Rusk
504. Telegram From the Department of State to the Embassy in Pakistan/1/ Washington, July 16, 1968, 0001Z. /1/Source: National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 15 PAK-US. Secret; Immediate; Nodis. Drafted by Spain, Wolf, Wix, and Sheldon on July 15; cleared by Curl, Country Director for Turkey John M. Howison, NEA Deputy Assistant Secretary Stuart W. Rockwell, Country Director for Iran Theodore L. Eliot, Jr., Heck, Nitze, and Helms; and approved by Katzenbach. Walt Rostow was informed. 202781. Ref: Rawalpindi 6173./2/ Subject: Peshawar Communications Facility. /2/In telegram 6173 from Rawalpindi, July 14, Oehlert indicated that he was reluctant to deliver the President's letter to Ayub without guidelines concerning the position to take in discussions concerning the future of the facility at Peshawar. (Ibid.) 1. Please deliver Presidential letter to Ayub/3/ ASAP. /3/See Document 503. 2. As you know, now appears likely Belgian-Pak deal will go through. We will take up matter with GOI at appropriate time. Language announcement virtually agreed. Anticipate we will be able handle Belgian desire be even-handed with Indians more or less along lines para 3 Rawalpindi 6174./4/ However, there can always be additional last minute snags and in any event we wish see how Ayub reacts to Presidential letter on Peshawar. If Ayub queries on this subject, therefore, you should not go beyond already stated position that Belgian tank arrangement seems be in last stages and we remain hopeful it will be consummated under terms and conditions previously discussed. /4/In paragraph 3 of telegram 6174 from Rawalpindi, July 14, Oehlert suggested that Belgium be informed that U.S. military supply policy applied equally to India as well as Pakistan, on a case-by-case basis. (National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 19-8 US-BEL) 3. We agree would be useful to get Shah and Turks to put in good word with Ayub at proper time, but here too would rather wait; if possible, until after we have had chance assess Ayub's reaction to Presidential letter. Also, the more people who know details of our Peshawar problems, the more chance there is for information to get to Russians who would use for additional mischief-making. We propose, therefore, defer action on this item at least for few days. 4. You may draw on following in attempting to get maximum possible phase-out period from Ayub: (a) We of course wish to remain in operation as long as we reasonably can in order to reduce the damage to our interests from termination of Peshawar. During the phase-down period, we can dismantle and remove some antenna which will make our preparations for departure obvious. Alternatively, should Ayub prefer, we can leave most general purpose antenna intact, even after we've ceased to use them, so that they could be inherited by Paks. (FYI: Exactly which antenna could go first will have to be worked out with US technical authorities. End FYI.) (b) To further reduce visibility, we can begin to remove personnel and some miscellaneous equipment on a schedule to be worked out with GOP. This could include relinquishing off-base housing, removing dependents, and cutting back on support activities. (c) FYI: Present estimate is that 12 months is desirable for orderly withdrawal with about 6 months possible on crash basis. Should you believe it worthwhile, in terms our objectives keeping as much as possible as long as possible, we could begin phasedown schedule to take effect before July 17, 1969, but we would hope to decide finally on this only after further discussions with GOP. End FYI. (d) FYI: Only exception to 12 months period above, as far as retention priorities are concerned, DOD considers Sugar Tree most important for continued operation until mid-1971, if possible. End FYI. (e) We can grant Pakistanis permanent possession of communications electronic equipment now on loan to them, and possibly some additional similar items. However, most of our equipment at Peshawar will be needed for other US requirements because of stringent budgetary restrains on new procurement. For security reasons we must remove all our sophisticated equipment, which would not be usable by Paks anyway. (f) Re exclusion area, if it would be helpful, we will use our best efforts to make entire base accessible to Pakistanis with, of course, exception communications center. (g) After thorough consideration, our conclusion is that we not prepared pay additional rental for any time extension. (h) Some additional quid might be available through consideration of what removable non-technical property to which Paks not legally entitled we could leave in Pakistan upon departure. (FYI: This depends on DOD requirements elsewhere and may not be very large. See 40 USC 512. End FYI.) 5. We recognize foregoing alone not likely persuade Ayub on extension, which likely depend more on his reaction to letter. In light Ayub reaction, we will provide further guidance./5/ /5/Printed from a copy without a stamped signature. Oehlert delivered the Presidential letter to Ayub on July 17. He reported that he had no opportunity during a brief meeting with Ayub to make the additional points contained in telegram 202781 to Rawalpindi. (Telegram 6235 from Rawalpindi, July 17; ibid., DEF 15 PAK-US)
505. Letter From President Ayub to President Johnson/1/ Rawalpindi, July 19, 1968. /1/Source: Johnson Library, National Security File, Head of State Correspondence File, Pakistan, Vol. 3, President Ayub Correspondence, 12/31/67-[sic]. No classification marking. Delivered to the White House by the Pakistani Embassy on July 31. Dear Mr. President, I thank you for your message of July the 16th,/2/ delivered by your Ambassador in Pakistan and appreciate very much the directness and candour with which you have referred to the issue of the US communications facility near Peshawar. /2/See Document 503. 2. In a spirit of equal honesty and frankness I would like to explain to you the position as we see it. 3. To the best of our knowledge, the Peshawar facility monitors a variety of activities and operations. Or to put it in your own words, it provides "accurate technical and scientific information on the intentions and capabilities of others". I concede that this facility is valuable to your country but by its very nature it lays us open to the hostility and retaliation of powerful neighbours. 4. The close relationship between our two countries in the security field, to which you have alluded in your letter, Mr. President, has progressively been whittled away. Only last year when your Ambassador communicated to us the new United States arms supply policy, he said that "a fundamental and historical change" had come about in our relationship. Your Secretary of State told our Foreign Minister last October in Washington that there was now "no special relationship" between Pakistan and the United States. 5. We in Pakistan cannot remain unmindful of the swift changes which are taking place in the world and especially around us today. We cannot ignore the threats which are developing to our existence, particularly from the feverish arms build-up in India. The arms supply policy of your country provides us with no comfort. If anything, it aggravates the imbalance between India and Pakistan. 6. The Peshawar facility on our soil in no way contributes to our security useful though it may be to your country. For us it constitutes a danger. 7. Changes in world politics make it imperative for Pakistan to improve its relations with neighbouring countries and for this purpose to remove irritants and obstacles to the development of friendly relations. I believe this is an objective to which your own Administration is dedicated and I recall with satisfaction the many significant steps which you have taken for achieving détente and a lessening of tension around the world. The Peshawar facility negates the attainment of this objective. It would have been logical in the light of circumstances to which I have referred above for Pakistan to request that it be given up a long time ago. But on the contrary we decided to carry out our commitments under the agreement fully in an honourable manner even though thereby we have run the risk of damage to our political interests and national security. 8. You, Mr. President, have referred to the aid which your country has been generous enough to give to Pakistan over the years. We have always gratefully acknowledged the valuable role which this assistance has played on our economic development. Pakistan-United States amity and co-operation has in no small measure contributed to the maintenance of stability in this important region of Asia and there is no doubt in my mind that the removal of the Badaber facility will not come in the way of our close co-operation in the field. It is, therefore, with faith in your statesmanship and far-reaching vision that I ask you to appreciate the problems of a small country which is hemmed in by powerful neighbours. 9. I have directed my officers to start immediate discussions with your representatives on the mechanics of dismantling the Peshawar facility so that the operation may be carried out in a smooth and orderly manner./3/ /3/Ambassador Hilaly called on Rusk on August 2 to follow up on the delivery of Ayub's letter. He said the decision not to renew the agreement concerning the Peshawar facility had been a "heart-rending" one, and he attributed it in part to Ayub's need to protect his domestic political position. (Telegram 214843 to Rawalpindi, August 3; National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 15 PAK-US) With best regards and good wishes for your continued health, Yours sincerely, Mohammad Ayub Khan
506. Telegram From the Ambassador to Pakistan (Oehlert) to the President's Special Assistant (Rostow)/1/ Rawalpindi, July 24, 1968, 0709Z. /1/Source: Johnson Library, National Security File, Country File, Pakistan, Vol. IX, Memos, 5/68-11/68. Top Secret. Sent [text not declassified] from Ambassador Oehlert to the White House for Walt Rostow. 334. 1. When I left your office at approximately 1700 hours on Friday, June 28, you and I, along with Nick Katzenbach and everyone else concerned at State, Defense, Joint Chiefs and the intelligence community, were in full and complete agreement that we should move heaven and earth to insure that the Belgian tank deal went through as immediately as possible. 2. After considerable delay on the part of the Belgians, Brussels sent its 8001/2/ on July 12 setting forth the bases on which the Belgians were prepared to move. /2/In telegram 8001 from Brussels, July 12, the Embassy outlined the grounds on which the Belgian Government was prepared to proceed with the sale of tanks to Pakistan. The Embassy noted that the only new element of importance among the Belgian conditions was the Belgian desire to inform India that Belgium was prepared to sell tanks to India on similar terms. (National Archives and Records Administration, RG 59, Central Files 1967-69, DEF 19-8 US-BEL) 3. There were no conditions in the Belgian proposition that we had not discussed in advance and agreed we should comply with. In fact, we were willing to go much further than the Belgians required. 4. Thirteen days have now gone by with no response to Brussels from Washington, despite two intervening messages from me to Washington. 5. I can understand why Washington would be interested in Ayub's response to President Johnson's letter,/3/ but on the other hand we ought to be willing to look at the other fellow's side of it, which may be briefly outlined as follows: /3/See Document 503. A. Our April 1, 1967 announcement of a new military supply policy encouraged GOP to believe that at long last it would be able to obtain some American-made equipment. B. The Paks then worked up a deal with Germany, which we refused to approve because instead of selling direct, the Germans insisted on selling through a third country. Admittedly, there was a difference between this proposal and our new policy, but it didn't appear to the Paks to be a difference of substance. C. Nevertheless they accepted our position and worked out a deal with Iran which was precisely in accord with our policy. Nevertheless, we refused to approve this deal for reasons which the Paks could never be expected to understand. It was precisely in accord with our policy and our only reason for rejecting it was because we did not want the Shah to spend too much of his own money buying equipment from us, even though such sales would be to our labor, profit, taxation and balance of payments interests. D. We then put the Paks in touch with the abortive Italian-German deal which many of us knew from the beginning could not possibly succeed because: I. The Italians had no tanks of their own, but had to acquire them from Germany; II. The Italians would not move until they had customers for all the 750 tanks; III. The Italians were insisting on outrageous prices; IV. The Germans insisted on a clause in the Italian contract which would prohibit resale to Pakistan. 6. Then we steered the Paks to Belgium. We have every reason to believe that the Belgians have indicated to the Paks that they are ready and willing to proceed, but that we are dragging our heels, which, in fact, we are. Under all these circumstances, I think we should have some appreciation of Ayub's difficulty in making any affirmative response to President Johnson's letter. 7. We are committed to the tanks. We all recognize that. We should fulfill our commitment. We can not expect any Peshawar success unless we do, nor can we expect to have any credibility or influence with the Paks unless we do. 8. I am counting on you, personally, old friend, to break this deadlock in accordance with our agreement./4/ /4/President Johnson considered and accepted Oehlert's advice at a luncheon meeting on July 24 with Rusk, Clifford, Helms, Rostow, and Generals Earle Wheeler and Maxwell Taylor. (Memorandum for the record by Rostow; Johnson Library, National Security File, Files of Walt Rostow, Meetings with the President, May-June 1968)
507. Memorandum From Edward Hamilton of the National Security Council Staff to President Johnson/1/ Washington, August 5, 1968. /1/Source: Johnson Library, National Security File, Country File, India, Vol. XI, Cables, 2/68-10/68. Confidential. A handwritten note on the memorandum indicates it was received at the LBJ Ranch on August 6 at 8:30 a.m. SUBJECT Herewith Messrs. Freeman, Gaud and Zwick recommend a $169 million PL-480 agreement with India. Zwick's memorandum (Tab A)/2/ is a concise summary of the proposal. The more detailed Freeman/Gaud memorandum is at Tab B./3/ /2/Reference is to an August 3 memorandum from Zwick to the President entitled "P.L. 480 Agreement for India." (Ibid.) /3/Dated July 26 and entitled "PL 480 Program for India." (Ibid.) This agreement would provide for the second half of calendar 1968. Last December you approved a $216 million bargain providing 3.5 million tons of grain to cover the first half. This agreement will provide another 2.3 million tons of grain, along with small amounts of tallow, milk and tobacco. Total: 5.8 million tons of grain to India in 1968--about the same as last year. The development case for providing the food is strong. The Indians have moved on all the self-help measures called for in the December agreement and are ahead of schedule on the important ones. The new wheat would go primarily to build buffer stocks to back the CCC-type price support operation we have been pushing the Indians to adopt. Taken with India's own bumper grain crop, this will provide the best grain supply situation and outlook in recent Indian history. However, this agreement gives us little new political leverage because the Indians aren't in the dire need of the famine years. The most compelling argument for the agreement is our domestic wheat situation. Despite reduced acreage the 1968 U.S. crop will be another record, and the wheat price has now dipped under $1.25 for the first time in a decade. Freeman frankly does not expect to reach our wheat export target of 750 million bushels for this crop year. But this agreement is the core of any fighting chance he may have. Commercial Purchases India now plans to acquire 1.5 million tons of grain in 1968 beyond the amounts we provide through PL-480. At least one million tons of this will come in food aid from other donors. This leaves 500-700,000 tons to be bought on the world market. We have pushed hard to get the Indians to buy as much as possible from the U.S. So far this year they have bought 146,000 tons from us (and 200,000 tons from others). We hope to get another 200,000 tons or so. Cuban Problems in the Wings As you consider this, you should know that we have evidence of a new transaction by an Indian firm in Cuba. An Indian engineering company has contracted with the Castro Government to do the plans for a metal refinery which will probably process products of an expropriated American mine. The Indian involvement is entirely private, so there is no legal restriction on PL-480 or other aid. But it is hard to believe that the aid-haters on the Hill would let this one slip by if it caught their attention. The deal has been in the Indian press but not, so far as we know, in the American papers. It may pass unnoticed, but it may also give us real trouble. We have made it clear to the Indians that we are unhappy about this, and that the Congress is likely to be more so. They have listened politely and explained that it is a private transaction over which the Government has no control. In fact, of course, the GOI could make it practically impossible for the firm to go ahead. But the Government would take a lot of political heat. State's judgment--which I share--is that the Indians aren't about to pay that political price to safeguard wheat they don't really need for immediate consumption. If we push them and make the wheat a condition, my guess is the only effect will be that we won't move the wheat. Recommendation I recommend you approve the agreement. EH Agreement approved /4/Johnson checked the disapproval line. A handwritten note on the memorandum by Jim Jones, reads: "Hold this long as possible then disapprove"; this note is apparently a quote from the President. On August 7 Freeman, who had been informed of the President's decision by Hamilton, sent a memorandum to the President expressing his concern over the decision. He noted that the 2.3 million tons of wheat involved was important to India to build up its buffer stocks of grain, but he argued that the proposed grain sale was critically important to the United States in light of the record U.S. wheat crop. (Ibid.) Bowles saw the proposed P.L. 480 agreement as an opportunity to reverse the gradual erosion in U.S.-Indian relations. In an August 29 letter to Rusk, Bowles stated that if the President had decided to disapprove the P.L. 480 agreement, "it is a blow that could scarcely come at a worse time." (Department of State, NEA/INC Files: Lot 72 D 132, AID 15-1, PL 480 General) [Continue with the next documents]
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