nouncements implementing the program. He pointed out that the program was a corollary of the domestic program of assistance to American cotton growers and that it was not the intention of the Government of the United States to enter into a competitive cotton price war. He said he believed the actual operation of the cotton program in its few weeks of existence substantiated this statement and it was expected that future operations would bear it out. Mr. Corse then referred to Mr. Acheson's recent statement 82 before a special subcommittee of the Committee on Agriculture, House of Representatives, in which he indicated it was desirable to deal with problems like the cotton problem on a basis of international cooperation, and Mr. Corse referred to the proposed meeting of the International Cotton Advisory Committee which is to be primarily for the purpose of drawing up a recommendation to governments in regard to possible international collaboration in respect of cotton. Mr. Corse indicated that this Government hoped that all aspects of the problem, including the effects of the United States program on India, could be discussed at that time (probably January 1945). Mr. Chard expressed his satisfaction with our attitude, and said that the India Government was fully aware of the reasons for our subsidy program and only wanted in a friendly way to make sure that we were aware of India's interests and the possible repercussions of our program on India's trade. Colonel Cook emphasized that at present our program was not harming India but Mr. Chard said it was necessary to make plans a year in advance. He said the American proposal for a meeting of the International Cotton Advisory Committee in January had been forwarded to the India Government by the Agent General here but no definite reply had yet been received. He felt sure, however, that the India Government would welcome the proposed meeting of the Committee and would be glad to see some international solution of the problem. There was discussion of the technical aspects of the memorandum received from the India Agent General, and Mr. Chard was questioned particularly regarding the comparability of the price data which was quoted for Indian and American cotton to indicate the possible harmful effects of the United States subsidy. Mr. Chard said he felt sure the price data and types and grades shown were generally comparable although comparison was very difficult because of changes this year in grade classifications for Indian cotton. Mr. Corse said a memorandum along the lines of the conversation would be prepared for the Agent General. 82 Statement regarding United States cotton policy, made on December 5 at the cotton conference of the Subcommittee of the House of Representatives for the study of policies of post-war agriculture, released to the press December 5, Department of State Bulletin, December 10, 1944, p. 700. 600.458/12-444 The Department of State to the Agency General for India MEMORANDUM 1. The Department of State has received the memorandum of December 4, 1944, of the Agency General for India concerning the relative positions of the United States and India in cotton export markets and the effect of the present United States policy of assisting the export of cotton by subsidy. It is noted that the Government of India requests "that the Government of the United States may see its way to reduce the export subsidy of 4 cents per pound so far as that subsidy applies to qualities Middling 7/8" staple or [and] lower." 2. The facts regarding the cotton export program of the United States are as follows: (a) Section 21(c) of the Surplus Property Act of 1944 (P.L. 457, 78th Congress, 2d Session, approved October 3, 1944) authorizes the Commodity Credit Corporation, an agency of the War Food Administration, to dispose of surplus United States agricultural products in world markets at competitive world prices. This section reads as follows: "Surplus farm commodities shall not be sold in the United States under this Act in quantities in excess of, or at prices less than, those applicable with respect to sales of such commodities by the Commodity Credit Corporation, or at less than current prevailing market prices, whichever may be the higher, unless such commodities are being disposed of, pursuant to this Act, only for export; and the Commodity Credit Corporation may dispose of or cause to be disposed of for cash or its equivalent in goods or for adequately secured credit, for export only, and at competitive world prices, any farm commodity or product thereof without regard to restrictions with respect to the disposal of commodities imposed upon it by any law: Provided, That no food or food product shall be sold or otherwise disposed of under this subsection for export (1) if there is a shortage of such food or food product in the United States or if such sale or other disposition may result in such a shortage, or (2) if such food or food product is needed to supply the normal demands of consumers in the United States." (b) On November 11, 1944 the War Food Administration announced a program to facilitate the exportation of cotton in accordance with the above-quoted provisions of law (copy of announcement enclosed). Initial export prices and differentials were announced on November 15 (a copy of this announcement and a copy of a release of the War Food Administration on "Terms and Conditions of Cotton Sales for Export Program" are also enclosed 83). 3. The reduction in payment on cotton exports of qualities Middling " staple and lower, as requested, would render the program largely ineffective. 83 Neither attached to file copy. 4. The cotton export program of the United States is a corollary of the present domestic program of assistance to American cotton growers. The occasion for the export program arises from the fact that the United States maintains, through crop loans and other price supporting measures, a domestic price for cotton substantially higher than would be the case if the price were to be freely determined by competitive forces. With a domestic cotton price above the general world level little, if any, exports could take place in the absence of an export program. This export program is intended only to permit United States cotton to maintain a reasonable share of the world cotton market. 5. It was made clear in the War Food Administration announcement of November 11 that it was not the intention of the Government of the United States to enter into a competitive cotton price war. It is believed that the actual operation of the cotton program in its few weeks of existence substantiates this statement, and it is expected that actual operations in the future will continue to bear it out. 6. The Government of the United States considers it highly desirable that the problems involved in the present cotton situation be dealt with on the basis of international cooperation. In this connection Mr. Acheson, Assistant Secretary of State, made the following statement on December 5 before a Special Subcommittee of the Committee on Agriculture, House of Representatives, meeting to consider and recommend future programs and policy with regard to cotton : "Burdensome commodity surpluses should be dealt with on a basis of international cooperation in such a way as to avoid the development of unfair trade practices and unhealthy international rivalry. If provision is made for the orderly liquidation of world surplus stocks no one country will dispose of its surplus in a fashion detrimental to the interests of other countries who are also burdened with large accumulations. Furthermore the fear of disorderly world markets will be removed and trade will be carried on in an atmosphere of mutual respect for the rights of other exporting countries. In such an atmosphere there will be hope for the expanded world trade which is so necessary for the attainment of high levels of employment and income." 7. The proposed meeting of the International Cotton Advisory Committee is primarily for the purpose of drawing up a recommendation to governments in regard to possible international collaboration in respect of cotton. If the Committee should recommend that an international cotton conference be held, it is the view of this Government that the representation should be as wide as possible under existing conditions; and that representatives of importing as well as exporting countries should be present. The Committee can, and it is believed should, take full account of the interests of importing countries in its deliberations. 8. For the further information of the Agency General for India there are enclosed copies 84 of the statements by Mr. Claude R. Wickard, Secretary of Agriculture, and Mr. Acheson before the Special Subcommittee referred to above, which discuss the cotton problems, domestic and international, facing the United States. WASHINGTON, December 19, 1944. 600.458/12-2244 The Agent General for India (Bajpai) to the Assistant Secretary of State F.171/44 WASHINGTON, 22 December, 1944. DEAR MR. DEAN ACHESON: You must have seen the State Department memorandum 600.458/12-44 [444], dated December 19th, on the subject of the assistance given to American cotton by means of a subsidy for purposes of export. I have informed my Government of the purpose of the proposed meeting of the International Cotton Advisory Committee and await their instructions. Possibly an international conference will provide the best means of resolving the problems raised by the existing cotton situation, and I sincerely hope that the initiative of your Government in suggesting international cooperation as the basis of a solution equitable to all concerned will evoke prompt and favourable response. 2. May I, before concluding, draw your attention to paragraph 5 of the memorandum. We accept, of course, the statement that it was not the intention of the United States subsidy programme to start a competitive cotton price war. As we explained, however, in paragraph 3 of our memorandum dated December 4th, the effect, at least in India, was to reduce the prices of comparable varieties of Indian cotton by 3 to 32 cents per lb. With best wishes for Christmas and the New Year, I am, Yours sincerely, G. S. BAJPAI INITIATION OF A PROGRAM OF CULTURAL COOPERATION BETWEEN THE UNITED STATES AND INDIA 811.42745/76 The Officer in Charge at New Delhi (Merrell) to the Secretary of State No. 458 NEW DELHI, April 28, 1944. [Received May 12.] SIR: I have the honor to refer to despatch No. 1333 dated April 18, 1944,85 from the Consulate at Bombay forwarding a letter received by the Consulate from Dr. Jagadisan Mohandas Kumarappa which discusses relations between India and the United States, and to recommend that the Department extend to Dr. Kumarappa an invitation to visit the United States as its guest. Such a visit would enable the Science, Education and Art Division of the Department's Office of Public Information to discuss the question of a closer link between American and Indian educators and social workers with an Indian who not only is interested in the subject but also has many constructive ideas. As an official guest of the Department it would be possible to obtain for Dr. Kumarappa priority travel to the United States via ATC 86 planes which at present are not crowded on west bound flights. The Consulate's despatch states Dr. Kumarappa feels the time may not yet be ripe for the inauguration of a system of visiting professorships between the two countries. It is my understanding that under the convention providing for the exchange of professors among the American Republics, the country sending a professor pays his salary, although the opposite is true in the case of exchange students. If the United States should follow the same system with respect to India, the receiving institution in India would not have to worry about the salary of a visiting American professor. For political reasons, however, the present may be an inappropriate time to arrange an official system of exchange. I believe the analysis of British antagonism to any growth in American educational influence in India found on pages 4 and 5 of the Consulate's despatch under reference is substantially true. It would, therefore, be unlikely that the British dominated Government of India would be willing at this time to arrange for an official exchange of professors. Similarly, the Government of India probably would try to dissuade any public institution of higher learning from adding an American expert to its faculty even temporarily. In view of these conditions, the best opportunity now in sight of introducing American influence into Indian education may be through the private Tata Institute of Social Sciences which Dr. Kumarappa heads. The Department may wish to consider seriously the granting of stipends to American teachers picked out by Dr. Kumarappa and willing to teach for a time at the Tata Institute but unable to do so because of the small remuneration the Institute is able to offer them. Modestly enough Dr. Kumarappa discusses research fellowships purely from the American viewpoint perhaps not realizing that both the Rockefeller Institute and the Guggenheim Fund also award fellowships for graduate study by foreigners in the United States. In his speech before the legislative bodies on February 17, 1944, the Vice 8 Air Transport Command. |