501.BC Indonesia/4–2148: Telegram
The Acting Secretary of State to the Consulate General at Batavia
161. For Usgoc 89. Dept officers have discussed with Matthew Fox and associates his contract with Indonesian Republic.1 Contract, [Page 151] copy of which being airmailed, provides for establishment Indonesian-American Corp which is to act as sole agent Indo Rep Govt in sale in US of commodities owned by Rep as governmental entity, and to act as sole agent of Rep in procurement in US of goods and services required by Rep. Actually, Corp would interest large US firms program, each firm to pursue its own transactions, in some cases with Fox financing. Contract relates both to immediate commercial operations and long term reconstruction plans. Dept officers told Fox’s associates early January contract was unsatisfactory to Dept for following reasons:
- a.
- Rep not sovereign and trade between Rep as sovereign and American nationals, would be derogation Neth sovereignty interim period and USI sovereignty later period.
- b.
- Performance under contract would appear to Dutch and others as derogation neutrality US as member GOC.
- c.
- Contract of this monopolistic character possibly contrary to US Govt’s free trade, anti-governmental-trading policy.
- d.
- Public knowledge existence this contract would provide Communist and other unfriendly states with opportunity to bring charges of alleged US imperialistic designs on Indonesia.
In conversations with Fox above points made forcefully in addition to following:
- e.
- Successful implementation Renville Agreements (formation of USI, of union, and holding of plebiscites) appears to Dept to depend in large measure on willingness of Rep to participate in interim govt under reasonable conditions to be negotiated between Neth and Rep delegations. Rep now engaging in delaying tactics because of unwillingness to give up certain attributes of sovereignty under Prin 1 Renville Agreements particularly control foreign trade. Dept convinced Rep more encouraged this position than by any other single practical consideration by prospect of large operations under Fox-Gani contract. Dept determined to spare no effort to secure absolute compliance Renville 6 principles both parties and earliest possible formation interim govt including Rep (Goc 229, Apr 16). Therefore, Fox requested abrogate contract. Monopolistic character contract reserved future discussions.
Fox, apparently reasonable and sincere, assured Dept that he would do nothing to embarrass US Govt and would consider at once how he could extricate himself from moral and legal commitments to Rep. He suggested desirability going to Jogjakarta to explain inability to continue contract and persuade Republican leaders desirability their earliest entrance interim govt and consequent acceptance Neth sovereignty interim period. Dept told Fox it considered this undesirable as his appearance Jogjakarta would be subject to misinterpretation by Rep and USSR. Fox suggested sending subordinate whose presence [Page 152] Jogjakarta would attract less attention. Dept replied negatively but did not definitely refuse.
Since Fox-Gani contract first brought to Undersecretary by van Kleffens who offered, in interest of harmony and avoidance embarrassment US Govt, make no capital of it, Neth Emb Wash advised foregoing.
Foregoing for your info and comment with particular reference to desirability travel Jogjakarta of Fox or his representative.
Sent Batavia as 161. Repeat The Hague as 150.
- Dr. A. K. Gani, former Indonesian Republic vice premier, was agent in signing the contract in January at New York.↩