856d.00/12–1348
Memorandum Prepared for the Acting Secretary of State1
As you are aware, the Netherlands Government has rejected the essential desiderata of the US Aide-Mémoire. The Netherlands Government has issued a communiqué to the press which confirms its position regarding its intention to move ahead in the formation of an interim government without prior agreement with the Republic. The Republic has stated that this move would render its participation in the interim government impossible. The final paragraph of the Dutch reply to our Aide-Mémoire strongly foreshadows the possibility of an outbreak of hostilities in Indonesia. It is expected that the case will be brought by the Republican Government to the attention of the Security Council in a matter of a few days. Cochran has stated that he feels that in view of the Dutch intention to proceed unilaterally, the GOC will become ineffective and the truce will not hold up.
In the circumstances, we recommend a course of action based on the assumption that the position of the Netherlands can be reversed if the US, both unilaterally and in conjunction with the Security Council, reaffirms and maintains a firm position.
[Page 551]In order to put this assumption to the test, it will be necessary to begin promptly to invoke those sanctions implied in the US Aide-Mémoire. These include: (a) A US stand in the Security Council squarely upon the record, including the compromise proposals submitted by the US Delegation and the Aide-Mémoire to the Netherlands Government in support of the Cochran Plan, as well as the repeated efforts by Cochran vis-à-vis the Republic; (b) Possible withdrawal from the GOC; (c) Immediate cessation of financial aid to Indonesia (chiefly approximately $30 million of ECA funds allotted for programming purposes but not yet committed for the first quarter of 1949), which action should be accompanied by a statement to the Netherlands Government that the US considers it unwise to invest further US funds in an area in which the economic and political future Seems so uncertain; (d) A statement to the Dutch that, under the “freedom of action” clause of the US Aide-Mémoire, we are considering the possibility of de facto recognition of the Republic, in order that US trade with that area can move ahead.
The above recommendation is based upon the following considerations. If the Dutch persist in their announced course of action it is likely that this government will be forced by public opinion to take measures against the Dutch which would amount to sanctions at a time when such action would be only punitive in character and could not lead to a solution of the Indonesian question which would serve US interests. In the event of military action, it is altogether possible that US public opinion will react so strongly against the Dutch as to jeopardize seriously Holland’s participation in any military assistance program which this Government might be in a position to offer governments of Western Europe. Furthermore, we are likely to be drawn immediately into the affair via US commercial interests, who as you know are eager to do business with the Republic and have up to now been restrained with difficulty. If US vessels attempt to carry on trade with the Republic in the face of existing Dutch trade regulations, we are very likely to have another Martin Behrman case on our hands and be forced to take a strong position against the Dutch. Finally, we feel that a solution in Indonesia brought about by force of arms or by threat of force will not be a stable solution, and will tend to give impetus to the communist agitation throughout the archipelago.
We believe that a firm line as indicated above will eventually bring about a change in the attitude of the Netherlands Government on this question. It is not unlikely, in view of its recent public commitments, that the present Dutch Cabinet will be forced to resign as a consequence of our taking such a position. If this comes about, we think it likely that the present Cabinet will, after an indefinite period, be succeeded [Page 552] by a government formed with a view to reaching an agreement with the Indonesian Republic and thus accommodating the US position. In view of the position already taken by this Government in this matter, and in the interests of our long-range relations both with the Netherlands and with Indonesia, we feel strongly that we should accept the risk indicated above and follow through in our effort to bring about a negotiated settlement in Indonesia.
- Submitted by the Directors of the Offices for European Affairs (Hickerson), Far Eastern Affairs (Butterworth), and United Nations Affairs (Sanders).↩