Foreign Relations of the United States, 1951, Asia and the Pacific, Volume VI, Part 2

690D.91/9–2451

Memorandum by Mr. William D. Pawley,¹ Consultant to the Secretary of State, to the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (McGhee)

secret

[Washington,] September 24, 1951.

Subject: The Kashmir Problem

During my recent visit to India to explore the possibilities of obtaining additional quantities of strategic materials,² I had an opportunity, purely by accident, to ascertain some facts which may offer a possible solution of the Kashmir problem.

During the negotiations with various Indian Government officials, references were made upon several occasions to mineral resources recently found in Kashmir. While I was calling on Dr. S. S. Bhatnagar, Secretary of the Ministry of Natural Resources and Scientific Research of the Government of India, I was shown samples of high-grade sulphur, of which he stated that scientists of his Ministry had found a 400,000 ton deposit in Kashmir. He also showed me samples of numerous other valuable minerals found in Kashmir and told me that in addition they had found deposits of copper, gold, and silver, which he thought might turn out to be extremely valuable. During this visit with Dr. Bhatnagar, the idea occurred to me that possibly he, more than anyone else, was influencing the Prime Minister to hold on to Kashmir at all costs, even to the extent of risking armed conflict.

A few days prior to this meeting, the Prime Minister had told me that the future of India is greatly dependent upon scientific development and the use of its mineral resources. In a brief talk with Dr. Graham a few days later, I told him that I thought that although the Kashmir problem had many well known political implications, the discovery of potential mineral resources might very likely turn out to be one of the main reasons why Prime Minister Nehru was unwilling to risk a plebiscite.

As you know, Dr. Bhatnagar is now in the United States and I have had several conversations with him. While he was visiting at my home the weekend of September 15, I took the occasion to press him regarding the importance that he and the Prime Minister place on the mineral discoveries, the hydroelectric power potential, and the other economic assets of Kashmir. He admitted that he, the Prime Minister and other members of the Indian Government look upon the wealth of Kashmir as being far more important to India than any political considerations. He told me more of the sulphur discovery and said a road was being built to facilitate its transportation to a railroad.

Thinking that possibly an economic solution might be the key to the problem, I asked Dr. Bhatnagar if he thought the Prime Minister would be interested in a proposition in which the United States and England would participate with India and Pakistan in a corporation for the development of mineral resources, hydroelectric power and the other economic assets of Kashmir. Such a corporation could be financed initially by the World Bank and the four countries involved but could be organized on a self-liquidating basis so that all foreign advances would be repaid at the end of ten, or so, years, during which the area would be under a trusteeship arrangement of the four countries with both India’s and Pakistan’s troops withdrawn. Dr. Bhatnagar said he thought this would offer the Prime Minister a solution, especially as it would enable India to cut down on her now high military budget, now being devoted exclusively to Kashmir.

I know that many suggestions for the solution of this pressing problem have been submitted, but I am convinced that an economic solution must be found. I think it is significant, moreover, that Dr. Bhatnagar feels that Prime Minister Nehru would very likely welcome a proposal such as I have outlined above.

I shall be glad to discuss this further with you or with anyone to whom you may wish to pass on this memorandum.

1. Formerly Ambassador to Peru (June 1945–April 1946) and Ambassador to Brazil (April 1946–March 1948).
2. Mr. Pawley’s mission dealt with U.S. assistance programs and with acquisition of materials for use in the U.S. atomic energy program; documentation is scheduled for publication in volume i; and see pp. 2085 ff., herein.