a sovereign state such as ours cannot tolerate in silence the intrigues of American officials and agents working relentless[ly] to undermine its independence.

It is because our friendship for the American people remains intact that the Royal Government will maintain its diplomatic relations with the Government of the United States in the hope that a day will come when that friendship can bloom again in a climate of confidence and good faith.

IX-13

"WE CATEGORICALLY REJECT THE ALLEGATION THAT THE UNITED STATES IS INVOLVED IN ANY PLOTTING AGAINST CAMBODIA": Statement Read to Correspondents by the Director of the Office of News (Phillips), Department of State, at a Press and Radio News Briefing, November 21, 1963

9

The American Ambassador to Cambodia, Philip D. Sprouse, has conveyed the United States reply to the Cambodian note of yesterday.10 In our reply we categorically reject the allegation that the United States is involved in any plotting against Cambodia. We state that officials of the American Embassy are prepared to begin immediately bilateral discussions on the termination of current aid programs as provided under the terms of the existing agreements." We note with satisfaction the expression of gratitude for American aid received in the past. We also welcome, in view of the long-standing friendship between the American and Cambodian peoples, the desire of the Royal Government of Cambodia to maintain diplomatic relations and state our intention to reciprocate.12

10

11

Department of State files.

Supra.

Negotiations on the termination of U.S. aid began in Phnom Penh on Nov. 29. On Dec. 14 these negotiations were broken off by the Cambodian Government on the grounds that the United States had unilaterally taken steps toward immediate cessation of aid programs already agreed upon and under way. The Cambodian Government stated that its decision to end U.S. aid had meant that no further new aid would be accepted and that current programs would be terminated by mutual agreement after negotiations in accord with the terms of existing agreements. The Cambodian Government requested that the departure of U.S. military, economic, and information missions be effected by Jan. 15, 1964. This deadline was subsequently postponed.

12 U.S.-Cambodian relations were further strained subsequently by recriminations about reported derogatory public statements in Cambodia concerning the late President Kennedy.

The Cambodian Government meanwhile continued to express fears concerning alleged violation of its boundaries and sovereignty, and on Nov. 24 formally requested the United Kingdom and the U.S.S.R., as cochairmen of the 1954 Geneva Conference on Indo-China, to convene a 14-nation conference in a neutral Asian capital in order to consider increasing the resources of the Cambodian International Control Commission to better assure the neutralization of Cambodia. The United States temporarily reserved judgment on the calling of such a conference.

IX-14

EXTENSION OF THE MISSION OF THE SPECIAL REPRESENTATIVE OF THE UNITED NATIONS SECRETARYGENERAL TO CAMBODIA AND THAILAND FOR THE CALENDAR YEAR 1964: Letter From the U.N. Secretary-General (Thant) to the President of the U.N. Security Council (Stevenson), December 9, 1963 13

In my letter of 18 December 1962" I informed the Security Council of the agreement which was reached with the Governments of Cambodia and Thailand for the appointment of a Special Representative of the Secretary-General in their area for a period of one year, commencing 1 January 1963. In pursuance of that agreement I appointed Mr. Nils Göran Gussing to serve in that capacity. Though the two Governments agree that Mr. Gussing's presence and availability has been a useful factor, it must nevertheless be stated that the objectives mentioned in the fourth paragraph of my letter have not been fully realized. I have, therefore, recently inquired of the two Governments whether, and if so in which form, they would desire this mission to continue. Both Governments have now informed me that it is their wish that the Special Representative of the Secretary-General should continue his activities under the same terms of reference for the calendar year 1964. They have agreed, however, that a small increase in the existing staff of the Special Representative should be provided, to enable Mr. Gussing to travel more frequently between the respective capitals. I have felt that, under the circumstances, I should agree to the request of the two Governments who have again signified to me their willingness to share, on an equal basis, all costs involved on account of the mission of the Special Representative so that no budgetary provision on the part of the United Nations will be required.

In view of the nature of the action envisaged, I thought it appropriate to make this report to the members of the Security Council.

CEYLON

IX-15

SUSPENSION OF UNITED STATES ECONOMIC ASSISTANCE TO CEYLON FOR FAILURE TO INSURE PROMPT COMPENSATION OF NATIONALIZED AMERICAN PROPERTY: Announcement Issued by the Agency for International Development, February 8, 1963 15

The Agency for International Development announced on February 8 that the U.S. economic and technical assistance program for Ceylon has been suspended.

The suspension action was taken in accordance with provisions of section 620 (e) of the Foreign Assistance Act of 1962.16 This section provides that if a country receiving U.S. aid nationalizes or takes over the property of an American citizen or company and fails, within

13 U.N. doc. S/5479.

"Text in American Foreign Policy: Current Documents, 1962, p. 1005.

14

15

Department of State Bulletin, Mar. 4, 1963, pp. 328–329.

16 Text in American Foreign Policy: Current Documents, 1962, pp. 1457-1468.

Docs. IX-14, 15

6 months of enactment of the legislation on August 1, 1962, to take appropriate steps to provide equitable and speedy compensation as provided by international law, the U.S. Government must suspend assistance extended to that country under the Foreign Assistance Act. The Government of Ceylon issued a series of official notices last April, May, and June nationalizing 83 gasoline stations and other properties belonging to two American oil companies-Esso Standard Eastern, Inc., and Caltex Ceylon Limited-by vesting these properties in the Ceylon Petroleum Corporation. The Government of Ceylon has not denied its obligation to pay compensation and has in fact given repeated assurances to this effect. However, the actions taken by the Government of Ceylon are not regarded by the U.S. Government as "appropriate steps" because they do not insure the prompt payment of compensation representing the full value of the property as required by international law.

During the past several months the U.S. Embassy has discussed with the Government of Ceylon actions which, in the opinion of the U.S. Government, would constitute appropriate steps fulfilling the requirements of international law. The Government of the United States was prepared to consider a negotiated settlement of the claims. of the oil companies, the submission of these claims to arbitration, or any other alternative plan which the Government of Ceylon wished to advance, provided there was adequate assurance that the payment of compensation would meet the standards of international law. In the absence of progress toward a settlement meeting these standards, the Government of the United States is required by law to suspend aid to Ceylon.

IX-16

UNITED STATES EFFORTS "TO MAKE IT POSSIBLE FOR AMERICAN CITIZENS AND [OIL] COMPANIES TO CONDUCT THEIR BUSINESS ON THE BASIS OF FAIR COMPETITION" IN CEYLON: Statement Issued by the Department of State, July 24, 1963 17

Early in June the Government of Ceylon announced its decision to give the state-owned Ceylon Petroleum Corporation a monopoly of the internal distribution of petroleum products as of January 1, 1964. On July 5, 1963, the American Ambassador to Ceylon [Frances E. Willis] acting under instructions presented a note to the Prime Minister of Ceylon.18 The attention of the Government of Ceylon was invited to the fact that the proposed action would be contrary to assurances given in 1962 that the private oil companies would be permitted to operate in Ceylon on the basis of fair competition. To date no reply to this note has been received.

17 Department of State press release No. 383, July 23, for release July 24, 1963 (text as printed in the Department of State Bulletin, Aug. 12, 1963, p. 245). 18 Not printed.

On July 3 the Government of Ceylon issued a communique announcing its intention to introduce in Parliament legislation to enact into law its decision to have the internal distribution of petroleum products assigned solely to the Ceylon Petroleum Corporation. The communique also stated that "the amending act would have effect notwithstanding anything to the contrary in the principal act or any undertaking given by the government in regard to the import, sale and distribution of petroleum. On July 17 the government in fact introduced such a bill.

The Government of the United States does not question the right of a a sovereign nation to nationalize property belonging to American citizens or companies, providing adequate and effective compensation is promptly paid in accordance with international law. The United States Government, however, regrets this most recent decision of the Government of Ceylon on two principal grounds. First, as indicated above, this action is at variance with assurances given earlier by the Government of Ceylon. Second, compensation has not yet been paid to the American companies for their properties which were taken over in 1962.19 The proposed action of the Government of Ceylon will deprive the companies of the use of the remainder of their properties throughout the island and therefore will give rise to further and more complicated questions of compensation.

The United States Government is continuing its endeavors to obtain compensation for the fair value of the properties of the American oil companies taken over in 1962. It will also continue to seek in Ceylon and elsewhere to make it possible for American citizens and companies to conduct their business on the basis of fair competition.

THE CHINA AREA

IX-17

"THE SOVIET-CHINESE ... DISPUTE OVER HOW TO BURY THE WEST IS NO GROUNDS FOR WESTERN REJOICING": Annual Message Read by the President (Kennedy) Before a Joint Session of the Congress, January 14, 1963 (Excerpts) 20

IX-18

"I DON'T THINK THERE WILL BE A BREAK [IN SINOSOVIET RELATIONS] UNLESS THERE IS A REPUDIATION OF THE MILITARY AGREEMENT BETWEEN THE TWO COUNTRIES": Replies Made by the Assistant Secretary of State for Far Eastern Affairs (Harriman) and the Director of Intelligence and Research (Hilsman), Department of State, to Questions Asked on an NET Television Program, Broadcast February 11, 1963 (Excerpts) 21

Mr. Harriman:... I think you must understand that the competition or conflict between Russia and China-the Communist parties in the Soviet Union and China-goes back a long way.

I found in numerous talks with Stalin that he did not have much confidence in Mao Tse-tung. When I reported to Washington that he called the Chinese "margarine Communists," some people laughed; they were confusing Stalin's statement with those of certain unrealistic observers who talked of Chinese communism as an "agrarian reform movement." Of course, what Stalin had in mind was that the Chinese Communists were not real Communists. To Stalin, the only real Communists were those who would accept domination by the Kremlin. Now today this issue is out in the open.

Secondly, there is a major Sino-Soviet difference, not in the ultimate objective but as to the method of achieving that objective. Both Moscow and Peiping are determined that communism shall sweep the world, but there is a deep difference between them concerning the methods to be employed.

Now that the Soviet Union has achieved remarkable industrial and scientific progress, the Kremlin leaders have become much more cautious. They do not want everything that they have built to be devastated by nuclear war. Communist China, however, has a great deal less to lose.

The Chinese Communists are not only in a more backward state of development, but they have failed in their attempt to catch up, with the collapse of the so-called "great leap forward." 22 The mainland Chinese people have been living on an inadequate diet for the last several years. Many industrial plants are closed down due to the failure of their agriculture to produce the needed raw materials and,. of course, to their inability to import. The Chinese Reds are incensed

"The replies printed here are taken from pp. 274-275, 279 of the Department of State Bulletin, Feb. 25, 1963, reprint of Department of State press release No. 71, Feb. 8, 1963, as revised. The program, entitled "State Department Briefing: Red China and the U.S.S.R.," was produced cooperatively by the Department of State and National Educational Television and first broadcast on Feb. 11 by the NET network.

The Second Session of the Eighth National Congress of the Communist Party of China endorsed the "big leap forward" by a resolution published May 26, 1958; text in Chinese Communist World Outlook: A Handbook of Chinese Communist Statements-The Public Record of a Militant Ideology (Department of State publication 7379), pp. 78-79.