DEPARTMENT OF STATE Memorandum of Conversation
DATE: July 5, 1950
SUBJECT: Indo-Pakistan Relations
PARTICIPANTS: The Secretary Mr. N. A. H. Ispahani, Ambassador of Pakistan SGA - Mr. Weil
COPIES TO: S/S, UNP, USUN, DRN, CIA S/A - Mr. Jessup UNA - Mr. Hickerson S/P - Mr. Nitze G - Mr. Matthews NEA [?] SCA Embassies: Karachi, New Delhi, London, Moscow
The Ambassador of Pakistan called on me at 2 p.m. The request for the appointment had been made on June 20, at which time the Ambassador indicated a desire to present his Government's views on procurement of military equipment in the US, and on the division of military equipment and arms between India and Pakistan following partition of British India - subjects which his Government understood had been discussed with me by the Indian Ambassador on June 15.
I told Mr. Ispahani I was delighted to note Pakistan's support of the Security Council's resolution of June 27. Mr. Ispahani said he was glad to hear that his Government was approaching the Arab states with a view to obtaining their support for the resolution. I said I was sure this approach would be very useful; that in view of their attitude toward the US it would probably not help for us to approach them; and I was sure Sir Zafrullah could be helpful.
The Ambassador then said that after learning from the Indian press of the Indian Ambassador's call on me of June 15, his Government had asked him to present its views on the procurement of arms, and on division of military stores and equipment between India and Pakistan following partition. He said that 19 ordnance factories were all in India and that the Indians would not give Pakistan a share of the equipment but agreed on monetary compensation; that the Indians agreed to ship 165,000 tons of military stores to Pakistan but to date had shipped only 30,000 tons of "junk", such as over-size or under-size uniforms.
The Ambassador went on to say that ever since partition Pakistan had been buying arms from other countries. Referring to the unofficial embargo established after the outbreak of hostilities in Kashmir Mr. Ispahani said the US had not been interested in selling arms to India or Pakistan for some time but that after a while the US had said it would permit purchases. I said I assumed he was referring to commercial purchases and he confirmed this.
Mr. Ispahani said India had bought arms "everywhere"; he assumed I had heard of the shipload of munitions destined for India which had blown up in the Red Sea. He said his Government had made no protest against India's buying of arms from other countries and that the reason for India's representations regarding the purchase of arms was that India wanted the US to say: "We must keep out of this". The Ambassador said that all the material which his Government had bought had been of a defensive character such as land mines, and that his country had no territorial ambitions or any desire to attack any other country. He said that in case any representations contrary to this had been made, or if I had any questions, he would like to answer them.
I told the Ambassador that we had told the Indians there was no partiality whatsoever in the matter of arms purchases by the two countries. I said the law had not permitted us to provide procurement aid; that a law might be passed which might make procurement aid possible; but that the Korean situation might change the picture as to the availability of supplies from Government stocks. I said I agreed completely with what the Ambassador had said about our treatment of both countries. I said I would not comment on the question of the division of arms between India and Pakistan. I further remarked that there was no thought of re-imposing an embargo on shipments of arms from the US to Pakistan or India.
The Ambassador then said that on the surface Indo-Pakistan relations looked "smooth" and might appear to have improved but he had it from "the highest authorities" that they were "worse". I said I was sorry to hear this. Mr. Ispahani then discussed the canal waters dispute. He said that at the meeting held at Delhi at the end of May the Indians had increased their demands for a share of the waters of the Chenab and Beas; that they were now willing to permit Pakistan to use the waters of these two rivers only during the monsoon period; and that this was a "complete reversal of their former position".* \(*After returning to his Embassy the Ambassador telephoned Mr. Weil to say his statement regarding the Chenab and the Beas had not been quite accurate - that he should have said the Indians wished to divert the entire supply of the Beas except during the monsoon, and "a considerable portion" of the waters of the Chenab\). He said India was now unwilling to accept any form of arbitration or mediation and would not agree to submission of the dispute to the International Court of Justice. He said the matter would therefore now "have to come before the world".
I asked Mr. Ispahani whether India was now in a position to use the waters of the rivers in question. Mr. Ispahani replied that India was now constructing works which would enable it to use these waters and would not agree to stop construction.
Turning to the Karachi trade agreement the Ambassador said this had produced high hopes and had appeared to be the first step toward resumption of trade with India but Pakistan had again been disillusioned. He said India refused to buy Pakistan cotton and was paying a higher price for cotton purchased in the US; the Indians had said that unless the price of Pakistan cotton was reduced by 15% they would be unable to maintain their controlled price on cotton cloth; the Pakistan negotiators then offered their cotton at a reduction of 15% on the condition that India would sell cloth to Pakistan at the controlled price, but the Indian Government refused to accept this offer. The Ambassador said the Indian Government had agreed to resume shipments of coal to Pakistan if Pakistan released raw jute which Indian buyers had paid for; the jute had been delivered but the Indian Government then said they would not ship coal until Pakistan raw cotton was delivered to India on Indian terms.
I remarked that this seemed quite incredible.
The Ambassador said the Indo-Pakistan conference on resumption of railway services came to naught because the Indians endeavored to use this occasion "to compromise Pakistan's exchange rate". He said that when Mr. Nehru and Liaquat Ali Khan met in Karachi at the end of April, Liaquat Ali had spoken of the Indian troop positions on the Pakistan border, and Mr. Nehru had said not to worry about it - that he would see what could be done. The Ambassador said that since that time nothing had happened so far as troops on the West Punjab border were concerned and that as a matter of fact additional troops had been placed on the East Pakistan border "on a smaller scale". Referring to Mr. Nehru's recent statement in Delhi suggesting that Pakistan and India forget their minor differences, Mr. Ispahani said this was "for the outside world", but that "all these terrible things" were happening. He said he had been told that things were now worse than at the end of March."
On the subject of the Delhi agreement the Ambassador said Pakistan had acted strictly in accord with its provisions but that the Indian press continued to publish provocative material and Mr. Kookerjee\(?\) was unhindered in his activities. He said that there had recently been Hindu- Muslin disturbances at four different places in India and that Hindus had actually rushed away from meetings addressed by Mr. Kookerjee to attack Muslims. He said the Indian Government claimed it was a provincial matter to control such disturbances but that the agreement had been made between the two central governments. He said that if these conditions continued, retaliation by Pakistanis was possible, and he considered the situation "highly explosive". He said it was true that an agreement had been reached on movable evacuee property but that no agreement had been reached on real property - particularly lands. Reading from notes, the Ambassador then said he understood that Gopalswani Ayyangar\(?\), Indian Minister of Transport, had now proposed that application of the part of the Delhi agreement relating to refugees be postponed until "all refugee problems were settled".
I told the Ambassador that this was all very serious; that we would think about it and see what we could do to be of help. The Ambassador said he knew our Government was impartial and selfless and would do all it could. I said these problems were very serious but I believed there was nothing that could not be settled by negotiation. The Ambassador replied that Kashmir might be taken as an example; that at the end of March there were indications that a solution might be in sight but that at the end of May the problem was no closer to settlement than before.* \(*The Ambassador probably meant to say "the end of June".\)
I told the Ambassador we would give consideration to all these matters. As he took his leave the Ambassador said there was one more point he wished to mention: Sir Zafrullah Khan was standing for election to the Presidency of the CA. I said we would give consideration to that, too.
NOTE: As he was leaving the building, the Ambassador, taking another look at his notes, asked Mr. Weil to place on record the statement that Pakistan had built up credits to the extent of Rs. 21 crores \(Rs. 210,000,000\) prior to devaluation of the Indian rupee \(September 1949\), and that the Indians had refused to let Pakistan use any part of this amount.
NSA:SGA:TEWeil:lmk 7-7-50