negotiated a preliminary base agreement a year and a half ago, and the Libyan Government wants to get it amended in some respects which are more favorable in terms of the rental that we pay, primarily, and certain other minor provisions. The result has been that we have not paid anything for the last year and a half and we have just been there as a squatter and that has been creating some annoyance. Mr. Stassen and I are looking into the possibility of getting some down payments made because the Libyan Government is extremely poor and about the only thing it has to survive on is the value of its strategic position. We discussed that yesterday with the President and the Secretary of Defense, and we hope to find a way to put that on a better basis because it is very important from a strategic standpoint.

U.S. RELATIONS WITH GREECE

I will pass on to the North now, up to Greece. The relations with Greece are good. The present Government of Greece is a strong, able Government which is doing better than any Government in recent times in Greece to clean up the situation. They are friendly with the United States. They have offered to make further forces available in Korea if there is no armistice there. They have offered us certain base facilities. They do want some assistance, particularly in terms of longrange power development, to which Mr. Stassen can speak a little bit more, but I find the situation here-or we found a situation which I think needs to be clarified to some extent.

RELATIONSHIP BETWEEN DEFENSE AGREEMENTS AND ECONOMIC AID

In many of these countries, we have very considerable facilities: base rights, and things of that sort. Theoretically, we get those for nothing. Then there is a sort of a side agreement for economic aid. The two things are theoretically disconnected, but actually are connected. Because they are theoretically disconnected, it often leads to misunderstandings because we think we can do the economic aid business any way we want and cut it off if we want, but actually if we do that, the other country then feels it is entitled to cut off our base facilities. There is a lack of coordination in the handling of some of these matters, and the clearance of our giving economic aid is a quid. pro quo for some very valuable rights that we are getting. That is the case in Greece, Arabia, Libya, and possibly some other countries.

The King and Queen gave them an invitation to visit the country this fall. They are very anxious to get that invitation and that in itself will go quite a way to make for better relations between our

countries.

I will jump over now to India and Pakistan.

In India, we spent considerable time, principally in the political area, with just Mr. Nehru and myself who went together on three

2

1 Secretary Dulles is here referring to King Paul and Queen Frederika of Greece. 2 Jawaharli Nehru was a leader of India's movement for independence from Great Britain. He was the chief figure in the Congress Party and became Prime Minister when independence was achieved in August 1947; he served in that resition until his death in 1964. As Prime Minister. Nehru initiated India's nonalignment policy in for eign affairs and assumed international prominence as a leader of the underdeveloped world and as a strong supporter of colonies seeking to gain independence.

occasions where we had some long talks. We reviewed the problems of common concern to our two countries. They were very intimate and good talks. We just got up on the sofa together and curled up in Indian style; and sat there and talked to each other pretty frankly and fully about our common problems.

INDIA'S UNDERSTANDING OF UNITED STATES-KOREAN RELATIONS

I found that Mr. Nehru was not always very well informed factually about some of these problems where we had differences, when it came to a discussion of our Korean economic proposals. He was not very well informed and was acting under something of a prejudice that we were deliberately trying to make difficulties there so as to prevent an armistice occurring. I explained to him the reasoning underlying our position, and cleared up a good many doubts in his mind and that led him back to India coming out-at least I think it contributed to India coming out a few days later on with a statement supporting the American armistice position.

Also I found another fixed idea that the Government of South Korea was a complete puppet of ours. We could do anything we pleased and if the Government of South Korea did anything that would disrupt the armistice, that really meant we were disrupting the armistice, because it indicated we were just using Syngman Rhee 3 as a hoax to carry out our own ulterior and nefarious purposes.

We had a very good talk about problems of that sort, and while we talked about the threat in Southeast Asia, particularly in Indochina, and the possible threat from the north coming down through Nepal, which is perhaps the thing that worries them as a possibility more than anything else-They did not seem as much worried about the possible threat of moving in from the south, Indochina and Burma, apparently on the theory that the terrain between Burma and India was such that Burma could not be the base of a serious threat. They are more worried about the north than from the east; whether they are correct in that or not I think is debatable.

THE KASHMIR DISPUTE

We talked pretty fully about the Kashmir matter and the possibilities of settlement. There will be, as you know, a preliminary talk between Nehru and Mohammed Ali at the coronation, and then that is supposed to be followed up by a series of meetings, the first of which may take place at Karachi and perhaps follow on up with others at New Delhi after they get back from the coronation, beginning June 15 or 20.5 I think efforts can be made to settle the Kashmir dispute, but the points of view as we got them from the two prime ministers indicated that there is a rather serious difference of opinion

3 Syngman Rhee was a leader of the Korean independence movement and served as President of the Republic of Korea (i.e., South Korea) from 1948 until his overthrow in April 1960.

Mohammed Ali Jinnah, at the time Prime Minister of Pakistan. had been GovernorGeneral of Pakistan when it was a part of India. Jinnah organized India's Moslem population to demand a separate state, and this movement culminated in the creation of an independent Pakistan: he then became the first Prime Minister of Pakistan.

5 Secretary Dulles is here referring to the coronation of Queen Elizabeth II of Great Britain, which took place on June 3, 1953.

there and I am not overly optimistic as to whether they will actually, at this particular occasion, come together.

I intimated in the radio talk I made last night-Incidentally, I apologize for making that talk before appearing before your committees, but I got into a little jam, because today everything is filled up with coronation news and tomorrow the President is speaking, so I decided to move ahead of that, rather than wait until it was all over. I intimated in my talk last night with some delicacy, but I am sure the point will get home, that when it comes to economic aid to these countries, we cannot but take into account the fact that they are wasting a great deal of their economic resources in trying to create forces which might be used against each other, and that our economic aid would be better if they could settle these differences, so that we are in fact not subsidizing the wasteful use of forces possibly against each other.

I think I went as far in that respect as it is useful to go in a public statement, but we made perfectly clear in our talks, both at New Delhi and Karachi, our very deep concern for a settlement of this matter and we went to some extent into probing the possible terms of a settlement. As I say, the differences seem to be far apart, but it would be natural that each of them would state perhaps their extreme case to us. I assume each suspected that we might be passing on the other, and I thought we would relieve the suspicion which I assure you was groundless.

Mr. Stassen will speak about the Indian 5-year plan.

IDEOLOGICAL COMPETITION BETWEEN INDIA AND CHINA

I came away with the feeling that as much as we may disagree with India about their political views in some respects, we cannot but recognize the fact that there is going on a sort of a competition, as I said last night, between these two great countries of China and India; China with its population of 450 million and India with a population of 350 million both have great problems of mass welfare and improvement, and there is sort of competition there as to whether that improvement can be best effected by methods which grow out of a free society or the police state methods.

The importance of that particular competition and the stakes that depend upon the result are so great that I think we came back with a very clear conviction that we were justified in giving some support to the 5-year program, along the lines that had been recommended, which goes considerably below what the Indians would like and what had been proposed by the prior administration, but which I think will be adequate to enable them to carry on and meet the foreign exchange aspects of their plan, without which they might have to abandon or curtail it seriously.

WHEAT PRODUCTION FAILURE IN PAKISTAN

In Pakistan we found a very bad wheat situation which your own committee has looked into and reported on. We feel that it is vitally important to put through a wheat loan as is, I think, proposed.

Pakistan impressed us very greatly as a country which, because of the strength of its religious belief and the military quality of its people, can be relied upon to be one of the great bulwarks in that area against communism.

As I will refer to later when I talk about the Middle East Defense Organization, Turkey on one side and Pakistan on the other are the two really strong points. We helped India last year when it had a wheat famine, and I certainly think we should help out Pakistan this

year.

I believe that the cause of this thing-and Mr. Stassen will develop it further-indicates there is no reason why this thing should be recurrent. Last year, the Pakistanis did not grow as much wheat as they normally would have. They went into jute and cotton and then the bottom fell out of those markets and they were left without sufficient foreign exchange and not enough wheat for themselves. I do not think this needs to be anything which is recurrent, where we would have to come to the relief of those people again, under proper management.

THE MIDDLE EAST DEFENSE ORGANIZATION

Now I will go on and deal with some of these individual situations. I will talk about the so-called Middle East Defense Organization.

As I think you know, there was a project developed about 2 years ago largely under British auspices for a Middle East Defense Organization which got the nickname of "MEDO" and which was rather specific in its proposed membership. Its membership was rather overloaded from the standpoint of Western powers. Not only the United Kingdom, the United States, France, Australia, New Zealand, and the Union of South Africa were supposed to be members, but they rather overbalanced the indigenous membership which should be essentially Arab. We came back with the conclusion that that particular MEDO project could not be realized and whatever is done, it has got to come more out of the people who are in the area, and be responsive to their own desires, their own sense of common peril, and anything artificial in this MEDO thing that would be imposed upon them would lead to unfavorable reactions which would assure its failure.

I spoke about the sense of common peril and danger as the foundation for this thing. We found that that sense of peril existed to the greatest degree in what I call the northern tier of countries, which are reasonably close to the Soviet Union and sufficiently so that they are frightened. When you get south of that, Egypt, Jordan, Lebanon, Arabia, they are all tied up in the Arab-Israeli trouble, their troubles with the British about bases, and Arabia's territorial claims around the south of the peninsula, and you just do not get any response at all when you talk to them about the dangers of Soviet Russia. They will talk about it if they think they are going to get paid for it. When you get up north, you do find real concern. As I say there, the two strong points, the two pillars, are Turkey, which runs pretty well down into Arabia, and on the other side, Pakistan. In between you

have a group of countries, Syria, Iraq, Iran, who have a considerable

concern.

We were very well impressed by Shishekli, the present leader of Syria. He makes an excellent impression and he has a much more global approach in international understanding than, say, General Naguib of Egypt. They say he [Shishekli] may be assassinated any day and I suppose that is a possibility in that area, but it is not necessarily a reason I think why we should not give him a considerable measure of support.

Iraq is a country that is probably using its oil revenues to the best advantage of any of these countries. About 70 percent of them are in a reconstruction fund and they are doing a pretty good job in developing the richness of the Tigres and Euphrates Valleys. They are also concerned about the Russian threat.

You have a little spot up there where you really have five countries that come together, and it is very important that the four who are on our side should be tied together in some way. You have the Soviet Union in the north and you have Turkey, Iraq, Syria, and Iran, all of which do not have quite common boundaries but they point up to a small area there, and each is endangered by the possibility of attack that swings around through the other. There is a sense of necessity of being together.

THE POLITICAL SITUATION IN IRAN

Now the big gap in the problem of building together this northern tier of countries is of course Iran, at the present time, which is so engrossed in its oil problem with the British that they do not at the moment think-their government does not think particularly in terms of the danger from the Soviet Union, though the people still do, and I suspect the government in its heart still does. The people remember the Soviet occupation of 1941 and 1946 and they realize the danger that it may recur.

The governmental situation is extremely bad and it is very difficult to find anybody to deal with. For that reason I did not go personally to Iran, because I felt that either by what I did or failed to do, I would be seeming to play into the hands of one or the other of the factions, neither of which is extremely dependable at the present time. We did have our ambassador, Mr. Henderson, and the head of the assistance program in Iran come to meet us at Karachi and we spent a part of a couple of days there talking the situation over.

Mr. Henderson is a very good man indeed. We got the impression that that technical assistance program is doing as good a job in Iran as any other country in the world. It is an agricultural country primarily, and what is being done there to educate the people and help them in meeting pests and so forth is extremely important in maintaining a large measure of good will for the United States in the face

Col. Adib Shishekli led a coup d'etat in Syria in December 1949. He assumed the positions of President and Prime Minister of Syria in 1951 and resigned these positions in 1954.

Gen. Mohammed Naguib led a coup d'etat in Egypt which resulted in the abdication of King Farouk I on July 23, 1952. Naguib served as Prime Minister of Egypt from September 1952 to June 1953, and then as President of Egypt until December 1954.

8 Secretary Dulles is here referring to Wesley Henderson, who served as U.S. Ambassador to Iran in the period 1951-55.