891.2546/4–1254: Telegram
The Ambassador in India (Allen) to the Department of State
priority
1536. Thorium Nitrate Negotiations.
I. (a) All textual amendments in Deptel 1163 April 7 exhaustively discussed with full Indian AEC April 10 just before Bhatnagar’s departure for France. Indians appreciated Department’s reasoning and accepted all suggested revisions except that on statement of price (paragraph B in reference telegram), which they re-drafted after hour-long discussion of phrasing designed try meet requirements both parties.
(b) Indians requested insertion name of Holland among countries listed in clause three. As it was on their original list and was inadvertently omitted from drafts transmitted to Department by Embassy (reference enclosure 1 Embassy despatches 1436 March 121 and 1583 April 92); Corry consented.
(c) Written confirmation by Bhatnagar, with explicit concurrence Bhabha, of understanding specified in last paragraph Deptel 1163 was obtained.
(d) Amended text as described below was drafted by Corry with Bhatnagar and Bhabha and was signed by Bhatnagar and Corry “ad referendum,” viz., on express condition that each of the two governments will advise the other of the confirmation of the memorandum of commitment as early as possible. This provisional signing rendered necessary to secure Department’s assent to negotiators re-draft of clause five, and GOI law officer’s assent to Department’s amended versions of clauses four, six and seven as well as negotiators re-drafted five.
II. (a) Text of preamble and clauses 1 and 2 unchanged from GOI draft memorandum (enclosure 1, Embassy despatch 1436).
(b) “Holland” inserted between “Belgium” and “Switzerland” in clause three.
[c] Clause four amended to wording given in relevant paragraph in Deptel 1163, except that word “salts” in last sentence was replaced by “nitrate”.
[Page 1754](d) Clauses five, eight and nine proposed in Deptel 1163 were re-cast and re-drafted at Indian’s insistence in a new clause five as follows:
“Financial Arrangements” (new caption substituted for old captions “price of thorium nitrate,” “method of payment,” and “operational agreement”).
Verbatim text. “5. This memorandum of commitment will result in a contract between the Indian Atomic Energy Commission on behalf of the Government of India and the General Services Administration on behalf of the Government of the United States of America, and in an operational agreement under the Indo-American technical cooperation program. The contract will contain the standard terms of a contract for such material, and will be transmitted to the Government of India and executed as soon as possible on the completion of this memorandum of commitment. It will provide for the purchase by the General Services Administration of thorium nitrate of the quality specified at $2.20 per pound c.i.f. New York or other United States east coast port amounting to a total of $1,133,440 for 230 long tons. Simultaneously, the operational agreement will provide an additional sum of $669,760 to cover the purchase of such equipment and supplies as the appropriate Indian authorities shall designate to the extent of the above amount. It is understood that the funds applied to this purchase under the said operational agreement will not be derived from the total funds otherwise allocated to India under the Indo-American technical cooperation program but will be an addition thereto. The Indian Atomic Energy Commission will thus receive the total sum of $1,803,200 for 230 long tons of thorium nitrate, or $3.50 per pound. The Government of India understands that it will not be liable to the payment of customs duty in the United States on the thorium nitrate sold by it under the above contract.” End verbatim text.
(e) Clause six amended to wording given in relevant paragraph Deptel 1163.
(f) Clause seven amended to wording given in relevant paragraph Deptel 1163, except that “such” has been substituted for “same” as eighth word.
(g) Clauses eight and nine proposed in Deptel 1163 have been eliminated, though wording taken from them has been incorporated in redrafted clause five as shown above.
(h) Ad referendum paragraph added above signatures, as mentioned above in item (d).
The full text, together with copy of letter of understanding mentioned in final paragraph Deptel 1163 to which Bhatnagar gave his signed assent and cited Bhabha’s concurrence, are being airpouched to Department as enclosures one and two to New Delhi despatch 1594 of April 123 on April 18 due arrive Washington about 26th.
III. Comment—(a) Reference clause five, Bhabha professed unfamiliarity with implications term “delivered at dock New York, etc.” suggested in Deptel 1163 paragraph B and expressed preference use [Page 1755] term “c.i.f.” with which he familiar. If Department strongly desires use its phraseology instead, please state reason Embassy could give satisfy Bhabha.
(b) Embassy and TCM/I would appreciate receiving urgently sample copy of “standard GSA contract” referred to in clause five. Indian AEC and Ministry wish see.
(c) Bhabha stated intention furnish TCM/I with firm list total items to be procured under operational agreement mentioned in clause five by latter part June. (List sent as enclosures one and two to New Delhi despatch 1575 April 74 was “preliminary, for information”. Final list expected include titanium plant plus cyclotron, etc.). Reason for delay is that Indian scientists attending Ann Arbor nuclear engineers conference June 20 will telegraph Bhabha their recommendations final selection, e.g., size of cyclotron, etc.
(d) GOI will confirm to Embassy acceptance memorandum of commitment through Bhabha earliest after latter receives from Embassy Department’s acceptance.
(e) Embassy desires emphasize real difficulty and further re-opening of terms of memorandum. Bhabha will be in Kashmir and Bangalore after April 19 for about six weeks. Bhatnagar will be in France, South America and United States, and though he expects pay courtesy call Department while in Washington he not prepared undertake revisions without Bhabha’s concurrence. Krishnan, third member Indian AEC, remaining Delhi and concurs Bhatnagar and Bhabha’s negotiations but unwilling himself to assume responsibility for revisions.