Foreign Relations of the United States, 1955–1957, Southeast Asia, Volume XXII

180. Telegram From the Embassy in the Netherlands to the Department of State¹

The Hague, October 2, 1956—6 p.m.

515. Reference: Djakarta’s 812 repeated The Hague 31.² Embassy has carefully reviewed reference telegram and, while we have not unfortunately received Department telegram 496³ to which it refers, I find none of arguments contained in Djakarta’s 812 alter in any way considerations and conclusions set forth my telegram 408 (repeated Djakarta 23).⁴ I would again urge, therefore, any approach to Indonesians re increased aid be postponed for some months and reviewed thereafter in light then prevailing circumstances.

Embassy Djakarta argues US decision re aid Indonesia should be guided principally by its effect on substantial US “strategic and investment stake Indonesia”. While I am far from the scene, I question whether our delay in extending sum of $15 million in FY 1957 would seriously endanger either. If it would, our position in Indonesia must be much feebler and our influence derived from past generosity and support much less effective than our world situation could possibly justify. If this is true, is it not time we had a new look at our policies toward Indonesia and the reasons for it [their]failure?

Much has been said by the Secretary and by others in connection with Suez Canal problem of importance of maintaining the inviolability of international agreements. With this, as Department knows, I am in fullest accord. I feel deeply that we, as the one leading power in West completely free of any fair charge of colonial bias or colonial exploitation in the customary sense, must by voice and act make our influence felt in defense of preservation of the rule of law in our dealings with these struggling new, underdeveloped countries. Surely the Western colonial and ex-colonial powers can do so far less effectively with their motives suspect as they still are and with their heritage of past arrogance one of such bitterness and hatred in the eyes of these new countries filled with their new freedom and the heady wine of nationalism. To reward Indonesian debt repudiation and bad faith in IMF by new grant of aid will surely only encourage lawlessness there and elsewhere in Asia and Africa and serve as an incentive to more irresponsible acts inspired by the emotion of the hour or the needs of domestic popularity. With the world’s growing inter-dependence and economic complexity, the “annihilation of space,” so to speak, such gradual and general breakdown of law and respect for agreements ultimately can only produce near chaos. In other words, the right and courageous policy irrespective of its momentary unpopularity in the countries to which applied can only be in the long-run interest of those countries themselves.

These considerations to me seem far more important than “attempt soften blows” on the Dutch or seeking some momentary popularity in Indonesia, nor frankly can I see any validity in the argument that the return of Sukarno (incidentally the only non-Communist leader to accept the Order of Lenin) should be a determining factor in deciding the timing of the extension of aid. On the same plane, announcement of the decision of such aid coming right on the heels of Dutch presentation of Indonesian debt repudiation to the United Nations (Embassy telegram 511⁵) will only add to bitterness here. To reward one irresponsible action by Indonesia while condemning a similar, though far more important irresponsible action by Nasser, would, it seems to me, make our position in the United Nations debates quite inconsistent. How can we hope to uphold the sanctity of international agreements in one case and to reward its violations simultaneously in another?

Matthews

1. Source: Department of State, Central Files, 756D.5–MSP/10–256. Secret. Repeated to Djakarta.
2. Supra.
3. See footnote 2, supra.
4. Telegram 408 from The Hague, September 13, commented on telegram 464 to The Hague (sent to Djakarta as telegram 392; see footnote 2, supra). In telegram 408 Matthews urged that any approach to Indonesia concerning increased U.S. aid should be delayed some months and then reviewed in the light of then prevailing circumstances. He argued that the U.S. position with respect to the Suez controversy would be undercut if the United States were to reward “similar lawlessness and unilateral violations of treaties” by Indonesia, that the United States had a special responsibility for the Round Table Conference agreements because of its role in the U.N. Commission for Indonesia under whose aegis the agreements were made, and that increased aid to Indonesia at that time would be regarded by the Netherlands as an invitation to Indonesia to proceed with other measures against Dutch economic interests and would bring U.S relations with the Netherlands to a new low. (Department of State, Central Files, 756D.5–MSP/9–1356)
5. Telegram 511 from The Hague, October 2, reported that on October 1 the Netherlands Government had given the U.N. Secretary-General a letter concerning the Indonesian abrogation of agreements and repudiation of debts with the request that it be circulated to U.N. members. (Ibid., 656.56D13/10–256)