856d.00/9–2348
Memorandum Prepared for the Acting Secretary of State1
Subject: Dr. Graham’s Memorandum to the Secretary re Indonesia, Dated September 16, 1948.2
Dr. Graham’s memorandum (attached) is a strong plea for prompt and vigorous action by the US to induce the Dutch to come promptly to terms with the Indonesian Republic in the “fulfillment of the promised establishment of the free, sovereign and independent United! States of Indonesia, equal in the Union and equal in the United Nations”. It contains strong indictment of the Dutch position, which is interpreted by Dr. Graham as a policy of “delay, continual attrition, economic strangulation and political fragmentation”. It contains also an expression of faith in the ability and intentions of the present Republican Government. It strongly supports the recent US proposals offered by Mr. Cochran.
In his recommendation to the Secretary, Dr. Graham goes beyond the position taken by the Department in discussions last week with the Netherlands Foreign Minister. He proposes that the American position with the Dutch should be: “This is it and now !” Dr. Graham specifically recommends an immediate allocation of a fair proportion of available textiles, transportation equipment, and medicines to the Republic as part of our ECA aid applicable to Indonesia. This suggestion is made in order to strengthen the Hatta regime. (The Department is presently considering ways and means of getting a shipment of textiles to the Republic, and is seeking Cochran’s views re the advisability of this.) As sanctions to induce the Dutch to accept the US proposals, Dr. Graham suggests that we tell the Dutch (a) that the US may be compelled to return the issue to the Security Council, and (b) that we are considering the recognition of the Republic.
As you know, this Government has taken a strong position in urging the Dutch to accept promptly the US proposals as a “basis for negotiations”. We have not asked them to accept proposals as a final settlement. But we have informed them that if they do not accept the US proposals as a “basis for negotiations” we shall support these proposals being submitted to the GOC. Incidentally, we have implied that if this attempt to secure a settlement fails, the issue will have to be returned to the Security Council. But we have not used the threat of possible US recognition of the Republic.
[Page 365]It is our opinion that we had best await the outcome of the conversations with Stikker and the other pressures applied to the Netherlands Government before coming to a decision regarding the other recommendations made by Dr. Graham. However, we should accept the possibility that the Netherlands Government will either delay in accepting these proposals as a “basis for negotiations” or will adopt delaying tactics after the proposals are accepted. Accordingly, we should be prepared, if the above possibility materializes, to inform the Dutch that we are reserving complete freedom of action, to the extent of (a) not opposing submission of the Republic’s report to the Security Council, (b) supporting the US proposals before the Security Council, (c) assisting economically the Republic so long as it continues to maintain its non-Communist character, and (d) withdrawal from the GOC.