U.S. RESUMES MILITARY AID TO LAOS

Press, Volume XCIX, Issue 29339, 19 October 1960, Page 17

U.S. RESUMES MILITARY AID TO LAOS

Russia Offers Assistance To Neutralist Regime (ZV-Z. Press Association—Copyright)

(Rec. 9 p.m.) WASHINGTON, October 18. The United States is to resume its military assist* ance to the neutralist Government of Laos after a suspension of several days, during which Russia offered aid to the Prime Minister, Prince Souvanna Phouma. Word of the reversal of the United States position came a few hours after reports from Vientiane that Prince Souvanna had rejected two offers for the resumption of aid because of conditions attached by the United States. The Assistant-Secretary of State for the Far East, Mr J. Graham Parsons, has been . having talks in Vientiane, the administrative capital of Laos, with Prince Souvanna about the resumption of American aid, which amounts to about 46 million dollars a year.

American Associated Press reported from Vientiane that Prince Souvanna confirmed published reports that the conditions set by the United States for the renewal of aid were the suspension of peace talks with the Communist Pathet Lao rebels in Laos and the removal of the administrative capital from Vientiane to the Royal seat at Lubang Prabang. where King Sayan Vatthana could exercise a closer watch on the neutralist Government.

In announcing the resumption of aid, the State Department made no mention of any demand that the peace talks with the Pathet Lao be broken off. but acknowledged that it had sought removal of the Government to Luang Prabang.

Prince Souvanna hinted that there were other conditions, but he declined to discuss them, American Associated Press said. He denied, however, that another United States condition was that he open peace talks with General Phoumi Nosavan, a Right-wing military rebel operating in the south.

Earlier, Prince Souvanna was reported to be considering an aid offer from the Soviet Union, which was made on Saturday when the Soviet Ambassador, Mr Nikitich Aramov, presented his credentials. The Soviet Ambassador was reported to have accused the Southeast Asian Treaty Organisation of interference and he praised Prince Souvanna's policy of neutrality He also offered a programme of “mutually advantageous" economic co-operation. The financial situation in Laos has deteriorated to the point where the National Assembly, in response to an urgent appeal, granted the Souvanna Government special powers to withdraw advances from the National Bank Prince Souvanna insisted that tine financial situation was not yet critical, but passage of the financial legislation had been preceded by a special Cabinet meeting, American Associated Press said. The American assistance programme includes direct salary payments to the 25,000-man Royal Laotian Army.