856E.01/6–647
Memorandum of Conversation, by Mr. Alexander Sehnee of the Division of Southeast Asian Affairs
| Participants: | Ambassador Loudon, Netherlands Embassy; |
| Mr. Vredenburch, Chief of the Political Department, Netherlands Foreign Office; | |
| Dr. Hirschfeld, Economic Adviser, Netherlands Foreign Office; | |
| Mr. Helb, Netherlands Embassy; | |
| Under Secretary of State; | |
| Mr. Vincent, FE; | |
| Mr. Hickerson, EUR; | |
| Mr. Cumming, NOE; | |
| Mr. Nolting, NOE; | |
| Mr. Landon, SEA and Mr. Schnee, SEA. |
Mr. Vredenburch began his statement with respect to the Dutch position by reference to the recent visit to Batavia of the Prime Minister and the Minister for Foreign [Overseas] Affairs. Messrs. Beel and Jonkman found the Commissioner General and Lieutenant Governor convinced that further negotiations with the Indonesians would be futile and that the Dutch had to choose between two alternatives: (a) evacuation of the area and (b) military action. In an effort to avoid either of these possibilities, both of which are considered extremely undesirable by the Dutch, the Prime Minister and Minister of Foreign Affairs worked out the proposals which were transmitted to the Indonesians on May 27 and which were subsequently approved by the Council of Ministers at The Hague.
Mr. Vredenburch stated that reports from the Dutch Mission which went to Djocjakarta subsequent to the delivery of the note indicate [Page 943] that there was a good chance that the Indonesians will find the terms generally acceptable. Because of the division of opinion among Indonesian leaders, the Netherlands Government believes that effective action by the Indonesian Republic in implementing the terms of the Lingga Djati [Linggadjati] Agreement could only be achieved if continuous pressure were exerted upon the leaders. Mr. Vredenburch then requested that the United States provide this pressure by instructing its Consul General in Batavia to go to the Indonesian Capital and to urge upon the Indonesian leaders acceptance of the proposals outlined in the Dutch note of May 27.
Alternative courses of future Dutch action and the Dutch Government’s views with respect to these alternatives were set forth as follows:
(1) Continued negotiations. Mr. Vredenburch said that continued and drawn-out negotiations with the Indonesians were not acceptable to the Dutch for the reason that they could not afford to bear the cost of the continued loss of foreign exchange resulting from a disruption of trade in Indonesia caused by the present stalemate. While the Dutch were not “flat broke”, they nevertheless had a very serious foreign exchange problem and they were approaching the danger point. (2) Reference to the United Nations as an alternative course of action would probably result in the sending of a mission to the Netherlands East Indies which would require a couple of months to complete its investigation and as it was probable that at least two months more would be required for consideration of the Mission’s report by the United Nations, this procedure was unacceptable to the Dutch for the reason that they could not afford to carry the financial burden for the length of time UN procedure would require. From a political point of view the submission of the Indonesian problem to the United Nations was also objectionable because of the danger that Indonesia would become a political football and that the ultimate decision would not be based upon the issues involved but upon conflicting political interests. (3) Withdrawal to the outer islands. While Mr. Vredenburch personally has kept in mind the possibility that the Dutch might eventually arrive at the point where they would choose to withdraw to the outer islands, this alternative is unacceptable at this time. Execution of a withdrawal would be difficult because of the large numbers of people who would have to be evacuated. This alternative was unacceptable not only because of the Dutch responsibility in the area but also because it would be costly and would require at least one year to evacuate 500,000 people, including 100,000 military, 100,000 civilians, 200,000 natives and 100,000 Chinese who would also want to leave if the Dutch withdrew. (4) Limited military action. Mr. Vredenburch [Page 944] wished to make clear at the outset that in considering the alternative of military action, the Dutch did not contemplate occupying the Indonesian Republic’s Capital of Djogjakarta and did not contemplate military reprisals against the political leaders. In considering this alternative, the Dutch contemplate such limited military action as will permit them to enlarge the area of their foothold in Java in order to bring under Dutch control stocks which would be available for export and those areas in which the Dutch could plant crops for later export. With respect to the latter, the Dutch estimate that if they can occupy these areas in order to plant sugar cane seeds by August they will by 1949 have an export surplus of sugar valued at approximately $ (U.S.) 500,000,000. In response to a question by Mr. Vincent, Dr. Hirschfeld and Mr. Vredenburch stated that limited military action would relieve the Dutch financial position because of the fact that the small scale military effort required could be completed within a month and that the Dutch would thus secure control of stocks which could be sold abroad and could commence planting of the sugar crop. With the stabilization of the situation under Dutch control they could then make the investments in Indonesia required to increase the exchange producing resources in that region.
Mr. Vredenburch agreed that Mr. Vincent was correct in his understanding that the Dutch had eliminated alternatives (1) (2) and (3) above and that alternative (4) calling for limited military action will remain.
A fifth alternative, arbitration, was discussed when Mr. Landon inquired whether the Dutch had decided to discard the alternative of arbitration as provided in Article 17 of the Lingga Djati Agreement. Mr. Vredenburch said that while his Government might be willing to arbitrate the interpretation of various points in the Lingga Djati Agreement, it was not willing to submit the problem to arbitration in a manner which would require a fresh review of the entire situation. Arbitration along such lines would be drawn out and would be objectionable to the Dutch because of the fact that their financial position requires a more prompt solution of their differences with the Indonesians.
Upon the conclusion of Mr. Vredenburch’s presentation, the Under Secretary informed him that the Department also thought that the proposals were reasonable and that Mr. Vredenburch’s remarks had clarified two of the three points on which the Department had not been clear. These points pertained to (1) the significance of the reference in the preamble to the expiration of the truce of October 1946 and (2) the Dutch position that the proposals are not subject to any essential change. Mr. Vredenburch stated that the reference to the [Page 945] termination of the truce was based on a Dutch interpretation to the effect that a truce implies two forces lined up opposite each other and that with the signing of the Lingga Djati, the Dutch and Indonesians should eliminate battle lines and form a joint military force which could be reduced as developments in Indonesia progressed. The Dutch insist any future discussions with the Indonesians be based upon the proposals of May 27. They are willing to discuss with the Indonesians the details of these proposals but not any change in substance. (3) The third point on which the Department sought clarification concerned the establishment of an interim government. Mr. Vredenburch replied that the Dutch hoped that the interim government could be supplanted by the permanent government envisaged in the Lingga Djati Agreement as quickly as developments permit. From the Dutch point of view, the sooner the permanent government was established the better.
Mr. Acheson then informed Mr. Vredenburch that our Consul General in Batavia had received instructions to proceed to the Capital of the Indonesian Republic and there to urge upon the Indonesians the prompt acceptance of the Dutch proposals as a basis for arriving at a solution of their problems. The Under Secretary asked if the Dutch would like us to take further action, and in reply Mr. Vredenburch thanked him for the action which the United States had already taken.