174. Memorandum of a Conversation, London, August 20, 1956, 2 p.m.1
PARTICIPANTS
- The United States
- The secretary of state
- Mr. W.R.Tyler
- The Netherlands
- Mr. Luns—The Foreign Minister
- Mr. Stikker—Netherlands Ambassador2
SUBJECT DISCUSSED
- Request by the Netherlands Government for a Tripartite Démarche to Indonesia on the Subject of Indonesian Repudiation of Debts to the Netherlands
Mr. Luns told the Secretary that he wished to speak about two subjects: (1) the Indonesian repudiation of debts and (2) the Suez Conference. In fact he limited his conversation entirely to the first of these two subjects.
He said that the Indonesian repudiation was closely linked to Nasser’s action on the Suez Canal. He summarized the history of the Dutch-Indonesian debt situation, beginning with the arbitration committee under the chairmanship of Ambassador Merle Cochran3 over [Page 297] five years ago. He said that the lack of Western reaction to the suspension of payments by Indonesia had encouraged Nasser to take action against the Suez Canal Company, and that this in turn had led to the repudiation by the Indonesian Government. He said that unless it was brought home to Indonesia that she must call a halt to actions of this kind, others would follow, and specifically that Indonesia was certainly planning to take over the Dutch Shipping Company. He said that the Indonesians had claimed that the debt amounted to over three billion Guilders, whereas in fact it amounted only to something over 600 million Guilders. They had done this deliberately, said the Foreign Minister, at the same time claiming that the Netherlands in reality owed Indonesia more than three billion Guilders for damage arising from Dutch military operations before the Round Table Conference. Mr. Luns said he was convinced that when the Indonesians take over the Dutch Shipping Company, they will claim that the Dutch in reality owe them more than the company is worth, and will try to offset the value of the shipping company against the debt which they claim is owed them by the Dutch Government. He said that unless something is done now to stop this process of deliberate violation of international agreements, which has no parallel since the repudiation of the Tsarist debts by the Soviet Communist Government, it will be impossible to attempt to provide foreign economic aid to, or investment in Asian countries, and this will result in these countries being subjected to economic chaos and ultimately falling into the neutralist and Communist camp.
Mr. Luns said he had spoken to Mr. Lloyd and M. Pineau4 to ask them to consent to making a démarche in Djakarta expressing their strong disapproval and concern at the repudiation of the debt. He hoped that the U.S. Government would agree to associate itself with the U.K. and France in such a move. He wished to urge the Secretary to agree to this, not only for the sake of the political and strategic interests of the West in the Pacific, but also for the sake of relations between the Netherlands and the United States. He then summarized the reasons why these relations had deteriorated in recent months and mentioned in particular the adverse effect of the United States attitude toward the Dutch requests in the field of commercial aviation. He said he realized that the primary responsibility in this field lay, not with the Department of State, but with the Civil Aviation Board. However, he said, the Netherlands Government could not but note that it was being denied advantages comparable with those enjoyed by the Belgian and German airlines.
The Secretary commented that he was aware of the misunderstandings which had recently adversely affected U.S.-Netherlands relations. [Page 298] However, he wished to stress the importance which we attach to our relations with the Netherlands, and the value we place on our old established friendship. He could not believe that these misunderstandings would permanently affect our relations. The American people, he said, had a deep sympathy for the colonial peoples and for their aspirations, and this feeling tended to encourage the U.S. to help them, even though this might not always be agreeable to others. The United States, he said, attaches great importance to the Pacific area and to the role of Indonesia, which commands communications between several vital areas in Asia. He added that he would be glad to look into the matter which Mr. Luns had brought up and consider whether something could be done.
Mr. Luns returned to the charge, and repeated some of his convictions forcefully. He said that the Indonesians are saying behind our backs that they have the secret support of the United States Government for the action which they had taken; to which the Secretary replied that the Indonesians were saying this only on their own responsibility.
Mr. Luns again urged the Secretary to discuss the proposal which Mr. Luns had made to Mr. Lloyd and M. Pineau, and suggested that the four of them might find a moment to discuss it together. Alternatively, he suggested that perhaps the Secretary could name someone to represent him for further discussion of the step he had proposed.
[Here follows brief discussion of the Suez problem.]
- Source: Department of State, Conference Files: Lot 62 D 181, CF 746. Secret. Drafted by W.R. Tyler of WE. The discussion took place at the London Conference on the Suez Canal.↩
- D.U. Stikker, Netherlands Ambassador to the United Kingdom.↩
- H. Merle Cochran served as the U.S. member of the Debt Commission at the Round Table Conference; he was subsequently Ambassador to Indonesia.↩
- French Foreign Minister Christian Pineau.↩