501.BC Indonesia/10–849: Telegram

The Chargé in the Netherlands (Steere) to the Secretary of State 1

top secret

909. Hicus 54. Reached Hamid by phone 7:30 this morning. Told him understood my memo unacceptable as basis negotiation financial settlement. Consequently I desired withdraw it and would see him 10 o’clock for this purpose. I asked he inform Indrakusuma.

At 10 o’clock received by Hatta with Djuanda present. We had [Page 510] Hamid and Indrakusuma join us. I said Drees and Stikker had informed me Lieftinck found my suggestion impossible and could not take responsibility therefor. Consequently Netherlands considered suggestion unsatisfactory as basis for negotiation and I offered withdraw memo. I said there would be no Sunday meeting. Was handed back four copies my memo. All four Indonesians expressed keen regret this development and appreciation my effort. Hatta and Hamid said memo was by no means one-sided but represented middle course which involved inconveniences and hardships for them. Hatta said had asked Minister Goetzen explain budget figures for Indonesians and had found them not at all convincingly in support Netherlands attitude. Hatta said financial and monetary situation so bad, including budget deficit, that unless at least as reasonable plan as mine can be agreed, upon by Netherlands, he, Hatta, might as well suggest sovereignty be transferred directly to Communists rather than first to his group.

All four said lead from me had been only hope out of deadlock. Said they were unable make any offer above that submitted Baarn and Netherlands gave no indication of yielding from their position. Said work of military and other main committees well as all sub-committees in financial and economic field will be held up pending solution vital point debt settlement and financial arrangement. Said conference will definitely break down if we cannot therefore move out of this impasse. Hamid said even some members Netherlands delegation indicate lack sympathy with official position taken Baarn. For example, Hamid said, he was asked last night at dinner given by Blom how financial negotiations were progressing. When he said outlook unsatisfactory, Wisaksono, Agriculture and Fisheries Secretary of State in provisional Federal Government and member its delegation to RTC working with Netherlands delegation, said absolutely impossible USI start with debt around six billion. Four Indonesians promised keep my suggestion and developments thereon secret. I made no mention to Indonesians of possibility resignation Netherlands Government.

Hatta said if Netherlands will not accept my suggestion, only way out is for conference to work on other matters and leave financial settlement in suspense for investigation by international group. Hamid thought Netherlands would still oppose latter idea and that no settlement on other points such as taking care of Netherlands military withdrawals could be achieved in absence overall financial agreement. Saw Van Royen this noon my request. Told him desired withdraw his copy my memo. He said he would consider null and void but had given copy someone else. I reviewed last night’s talk with Drees and Stikker. Also asked he tell Stikker I had seen four Indonesians this morning and had received their copies. I summarized my talk with Indonesians, stressing Hatta’s worries.

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Van Royen said he had participated in meeting last evening with small Cabinet group that preceded my meeting with Drees and Stikker. Said aside from conviction that Parliament would not accept my idea of settlement Cabinet members themselves thought it more than they could recommend. He volunteered that Drees gave disproportionate importance to submission suggestion. Said Drees felt however that he would have to resign rather than ask Parliament approve such plan after promises he has made that further Netherlands sacrifices for Indonesia would not be necessary. I said I did not question Drees’ sincerity but did not see that resignation Cabinet would help anyone. Van Royen even more positive on this point, saying resignation not warranted and would hurt Indonesia well as Netherlands.

Stikker sent word to me in Van Royen’s office that Lieftinck desired see me Tuesday morning with Goetzen present. I agreed. I asked Van Royen if this meant there would be no precipitate government action. He said he thought there would not unless something might “blow up”. I assured him Indonesians had pledged secrecy to me. He said Stikker also wanted me to know he and Maarseveen had decided cable report to Washington of all dangerous factors Indonesian situation and seriousness Netherlands Government attaches thereto. Sending telegram today and would cable copy Batavia for information Dow and Beam.2 I told him Beam leaving for Batavia today and entirely familiar with importance Netherlands attaches to better order Indonesia and was confident Beam could have stiffening influence on UNCI and on responsible Indonesian authorities. Van Royen said RTC situation bad but shared my view we could still work out of it. He said he was convinced his financial people would seek my help Tuesday. I said would do whatever possible but wish restrain my initiative and let parties show they are willing make some move on own account. Signed Cochran.

  1. Repeated in telegram Gadel 48, October 11, 2 p. m., to New York (USUN).
  2. Consul General Jacob D. Beam was en route to his post at Batavia, succeeding Consul General Livengood.