856D.10/1–1651: Telegram

The Secretary of State to the Embassy in Indonesia


728. Fol full text Eximbank release 10:30 a. m. Jan 17 Washington time:

Eximbank today announced signing loan agreement Jan 12 with Republic Indo covering credits aggregating $52,245,500. Herbert E. Gaston, Chairman Board Directors, signed for Bank and Amb Ali Sastroamidjojo for Republic Indo. These credits have been allocated out of $100 million earmarked by Bank for Republic Indo last year. They being used fin importation productive equipment and materials required for reconstruction and development vital sectors the Indo econ. Specific allocations which covered this agreement are as fol:

$20 million for purchase automotive equipment, principally trucks but also including buses, jeeps, ambulances, motorcycles and some passenger cars. This equipment was urgently needed help in restoring Indo motor vehicle transportation facilities.

$2.1 million for purchase roadbuilding equipment be used for repair existing roads, well as construction certain new roads.

$260,000 for purchase key telecommunications equipment.

$6.7 million for purchase dredges steel, cement, other materials required rebuilding port facilities. Dredges be used resume regular dredging which necessary in order maintain access most Indo harbors.

$17.1 million for purchase railway equipment, including principally Diesel-electric locomotives, freight cars, track laying equipment. These be used help in restoring capacity Indo railway system move essential freight, passengers.

$6,085,500 for purchase 8 airplanes, together with necessary spare parts. These planes be used by Garuda Airways, which supply domestic service in Indo.

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Credit extended fin purchase automotive, roadbuilding equipment authorized by Board of Directors of Bank Aug 1950 and others authorized at intervals since that time.1 Agreement signed today sets forth detailed terms, conditions under which credits being utilized and are to be repaid.

Funds advanced under terms credit will bear interest at rate 3½% per annum and be repayable 30 approx equal semiannual installments beginning Mar 1, 1956.

Amb Sastroamidjojo and Mr. Gaston expressed their mutual satisfaction in formal conclusion of agreement. They confident, they said, that Bank and Govt Indo wld continue cooperate effectively toward development Indo econ.

  1. In telegram 792 to Djakarta, February 1, Ambassador Cochran was informed that the Eximbank on January 25, had allocated $8,290,000 to Indonesia under the $100,000,000 commitment to finance the purchase of electrical equipment in the United States (856D.10/2–151).