741.92/1–1546: Telegram
The Chargé in Siam (Yost) to the Secretary of State
[Received January 16—11:45 p.m.]
39. Request by British for additional 25 million baht to meet expenses of British troops (50 million already expended) has raised whole question of validity of Heads of Agreement and Military Annex1 since provision for full payment of occupation costs is contained in Military Annex (paragraph 6b) but not in formal agreement.2 Another provision in same category is that providing for control of Siamese vessels until March 2, 1946.
Siamese have informed British that they consider Heads of Agreement and Military Annex of [as?] having lapsed with signature of formal agreement and only latter to be more [now] binding. Their argument is that formal agreement was supposed to embody all provisions of Heads of Agreement and Military Annex which were to take effect and that they had no intention or power to sign any secret agreements supplementary to formal agreement. They have, therefore, informed British that, while credit will be opened for 25 million baht, currency will not be granted free of cost.
Regardless of legal validity of Siamese argument, fact is that Government would be intensely embarrassed if it should appear that they had subscribed to and are bound by a secret agreement more onerous than the published agreement. Certain successful candidates in election have announced intention to denounce published agreement in Assembly as too severe and revelation of further binding terms [Page 945] would, of course, redouble their attempts. Actually British propaganda line that published terms are proof of leniency of British policy would also suffer from revelation of additional terms. We consider it in the interest of all concerned, therefore, that, whatever the legal situation may be, British limit their future demands to those falling within scope of formal agreement. Whether they will do so or not is, of course, very much open to question.