Office of the Historian

172. Telegram From the Embassy in Indonesia to the Department of State1

Djakarta, August 16, 1956—6 p.m.

501. Joint Embassy/USOM message. Reference: Hague’s 14, sent Department 248, London 37, Paris 38.2 Since Hague Embassy’s comment [Page 294] on my limited distribution 4373 is apparently based on ignorance of situation here in all of its aspects, I assume Department will inform Hague of substance Deptel 26, July 54 which I can assure Department is being observed in every respect by Baird and by me.

At same time and admittedly in ignorance myself of entire situation in Netherlands and details of rapid development of events incident to Suez problem, I must repeat considered opinion of all officers of this Embassy and of USOM that aggressiveness of Soviet trade delegation and willingness make firm commitments are making it increasingly difficult for Indonesian moderates to maintain position which will safeguard United States interests. Despite fact that continuance of informal talks here without authority to arrive at anything concrete is handicapping US and may tend to become counterproductive, I believe Baird and I can handle situation for time being. Our recommendation numbered 1 in Embtel 437 must be considered in this light especially as we believe that in general position taken Deptel 26 is sound provided we are prepared to run risk of possible Soviet coup and circumstances do not compel us to delay action too long.

Indonesian action cancellation Dutch debt is indefensible from any standpoint and in my opinion stupid from standpoint Indonesia’s own interests but I do not see advantage to anyone but Soviets to inject this Dutch-Indo issue into delicate and complicated Suez canal conference5 which involves facts as well principles of vital interest to every nation. I suggest linking Indonesian debt action with Nasser’s Hitler-like canal action may well distort our perspective and would, to say least, not be effective in accomplishing major objective of United States policy in Indonesia, namely, to keep this country from hands of Communists.

In interest reducing burden on Department’s communication system during this crisis I will refrain from further pursuit of this subject unless there should be some new development.

Cumming
  1. Source: Department of State, Central Files, 856D.10/8–1656. Secret; Priority. Repeated to London, Paris, and The Hague.↩
  2. Telegram 248 from The Hague, August 15, commented that any increase in U.S. economic aid to Indonesia, after Indonesia’s repudiation of its debt to the Netherlands, would outrage the Netherlands Government and public opinion. (Ibid., 611.56/8–1556)↩
  3. Document 170. The telegram was repeated to The Hague by the Department as telegram 285, August 13. (Department of State, Central Files, 756D.5–MSP/8–1056)↩
  4. See footnote 4, Document 166.↩
  5. Reference is to the London Conference on the Suez Canal, August 16–23, 1956. Telegram 248 from The Hague, cited in footnote 2 above, declared that participants in the conference would be bewildered by an increase in U.S. aid to Indonesia at that time.↩