CABLEGRAM FROM CRITCHLEY TO DEPARTMENT OF EXTERNAL AFFAIRS

Colombo, 6 February 1951

1. SECRET

Colombo Plan

A secret United States mission has been touring India (about two weeks), Pakistan (about two weeks) and Ceylon (about one week) in connexion with the plan. The mission which was headed by Loftus,¹ State Department, and included Turnage,² Treasury and Bunting³ (ECA), has been gathering an assessment of the needs of the three countries under the Colombo Plan and in particular estimating the aid required from the United States in the first year. The purpose is to avoid delay in seeking appropriations from Congress and great care has been taken to avoid publicity and consequently embarrassment 1n Congress.

1. In Ceylon, the mission, which interviewed Ministers and departmental heads, was strongly opposed to any ‘permanent organisation’, as the Americans do not want ‘to be told what to do’. This suggests some misunderstanding by the Americans of the bilateral concept inherent in the plan. The Americans were not interested in balancing payments and emphasised that they were concerned only with the project. They strongly favour the selection of a few special projects which can produce quick visible results and want to avoid the spreading of efforts which they feel is the weakness of the United Kingdom approach.

2. The mission appeared to be extremely enthusiastic about the plan and disappointed when the Ceylon Minister of Finance⁴ indicated that because of the exceptionally high export prices and the favourable balance of payments, Ceylon would not need financial assistance in the first year; it suggested token aid might be requested.

3. The mission left Ceylon 29th January for London and planned to consult with Kennedy⁵ on his way to Colombo.

[NAA: A9879, 2202/E1 part 2]