Foreign Relations of the United States, 1949, The Far East and Australasia, Volume VII, Part 1

501.BC Indonesia/10–2349: Telegram

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

top secret   priority

The Hague, October 23, 1949—noon.

989. Hicus 75. Debt Commission met my quarters forenoon, afternoon and night 22nd. At 1 this morning unanimous agreement reached in good spirit without arbitration and following top secret document dated October 23 signed by Hirschfeld, Djuanda, Indrakasuma and Cochran:

“‘Debt Commission’ as established by RTC, acting in accordance its terms reference as granted by meeting of Steering Committee on October 21, 1949, has agreed and recommends:

That as of date of transfer of sovereignty from Kingdom of Netherlands to Republic USI latter assume responsibility for debt comprising:

A. Consolidated external debt, calculated as of December 31, 1949, at 871 million guilders;

B. Debt to third countries, calculated as of December 31, 1949, at 420 million guilders;

C. Following items in external floating debt, calculated as of December 31, 1949 to the maximum amounts indicated:

1. Swing British monetary agreement, account F 53.5 million guilders;

2. Swing C account 40 million guilders;

3. HI/HG account 80 million guilders;

4. Bretton Woods (opposite this is an asset of same amount as participation in International Fund and International Bank) 95 million guilders; (total) 1,559.5 million guilders.

That Government of Republic of USI assume responsibility for both interest and amortization of debts covered by items A and B and take over rights and liabilities under existing agreements for items listed under C.

In arriving at amount of debt to be assumed by RUSI at date of transfer of sovereignty, commission has given due consideration to amount of extra military expenditures and to amount of other expenditures which commission attributes to military action.

Foregoing involves reduction of external debt due to Netherlands by sum, calculated as of December 31, 1949, of 2 billion Netherlands guilders.

Internal debt at date of transfer of sovereignty is to charge of RUSI. Without giving possibility of reopening major questions that have been decided by this commission, foregoing shall not prejudice outcome of discussions now in progress in committees of RTC in regard to certain undetermined obligations, for example, those of pensions and rehabilitation.”

Hirschfeld had provided projection of statement liabilities Indonesia as of August 31, 1949 (Appendix I document RTC not/CC/8 dated September 23) to December 31, 1949. Latter gives consolidated debt 871 million guilders, foreign 420, floating 2.268 or total external 3.559.

Since agreement wipes out state to state external debt of 2 billion, nothing remained to be consolidated so we included nothing on “undertakings” or “escape clause” (see Hicus) 69 items 5 (b) and (c) of terms reference²).

Each of three members provided one copy signed agreement for delivery chairman respective delegation prior Stikker’s luncheon to be attended by Maarseveen, Stikker, Hatta, Roem, Hamid and Anak Agung today to plan means reconciling remaining RTC differences. Signed Cochran.³

Steere

1. Repeated in telegram 558, October 24, 3 p. m., to New York (USUN).
2. Telegram 970, October 19, not printed.
3. Telegram 931, Ushic 35, October 24, 7 p. m., to The Hague, stated that the Department was gratified over the unanimous agreement on the Debt Commission deliberations and appreciated Mr. Cochran’s efforts as UNCFI member in aiding the parties to reach a final solution of issues at the RTC “soonest”.