Memorandum of Conversation, by the Director, Office of Philippine and Southeast Asian Affairs (Lacy)


Subject: State–ECA Relations in Indonesia

Participants: ECA—Mr. Allen Griffin
PSA—Mr. Lacy

Yesterday I invited Colonel Griffin to lunch with me at the Metropolitan Club to discuss what he had described to me on the telephone [Page 599] the morning of the same day as a really bad state of affairs in Indonesia. As we met in the bar of the Club I remarked in answer to Colonel Griffin’s question as to how I was faring, that my Department was dreading the next attack on some of its officers which we understood Senator McCarthy1 was about to release. Colonel Griffin remarked that, “your fat friend in Indonesia is providing McCarthy with excellent ammunition”. Lacy: “Whom do you have in mind?” Griffin: “Cochran, of course.” Lacy: “How in the world can you think that Cochran supplies ammunition to McCarthy?” Griffin: “Because Cochran wants the U.S. to pull out of Indonesia, thereby turning the place over to the Communists.” At this point I thought it best to make out that Griffin had offered a sour joke so I told him not to be so extravagant and bought him a drink. Griffin returned to the attack, however, by asking me if I had received instructions from the Secretary to change what he understood to be our policy in Indonesia. I replied that I had no instructions from any of my superiors to change our policy in Indonesia but that I thought he must put his question in a more explicit form. Griffin said that he assumed that the Department wanted to pull out of Indonesia and that he believed this contrary to extant U.S. policy toward that country. I replied that I assumed that he made such a statement on the basis of previous conversations he had had with me and Mr. Merchant in which we had told him that we were considering recommending that the ECA Program for Indonesia be severely curtailed after fiscal year 1951, that this was one of the things I had in mind discussing with him at lunch, that as he knew, I thought the ECA program should be so curtailed, but that my position should under no circumstances be interpreted as indicative of a decision on the part of the Department to “get out of Indonesia”. Mr. Griffin said that Ambassador Cochran’s attitude made him suppose that we wanted to let Indonesia go to the Communists. At this point, feeling my blood pressure rise, I told Griffin that I thought it a matter of the highest importance that he and I continue to be good friends, that I was determined to do so because so much of the success of the U.S. policy in Southeast Asia depended upon our getting along, but that I could not continue to accept direct and indirect aspersions upon Mr. Cochran’s ability and patriotism. Griffin: “What Cochran needs is a psychiatrist. I really think he has gone off his head.” Lacy: “Now that’s the sort of thing I cannot stand for.” Griffin: “Cochran has made an abysmal mess of American relations with Indonesia[”] and now, by wanting to kick ECA out of the country and by getting hard-boiled with the Indonesians in the matter of supporting the U.S. in Korea, joining [Page 600] the Pacific Pact, and related matters, was making bad matters impossible. I then took occasion to give Colonel Griffin a spirited lecture on U.S. policy in Indonesia; on the role Mr. Cochran had played in the solution of the Dutch-Indonesian dispute and in the complicated and delicate operation which followed, the purpose of which, as he perfectly well knew, was to draw Indonesia in the direction of the American system. I told him that on several occasions it had been necessary for the Department to be tough on the Indonesians and on other occasions to be gentle with the same people; that Mr. Cochran’s record was one of almost unparalleled success in achieving what he was told to achieve; that I did not take kindly to criticism of a complicated, delicate operation extending over a period of some four years from “Johnny-come-latelys” like himself, representing as he does, an organization full of “Johnny-come-latelys”. I then told him that I was sorry to speak to him so bluntly and that I was obliged to confess that I was on the verge of losing my temper. Colonel Griffin cooled off considerably and insisted on buying the lunch. He fired, however, this parting salvo: That I should understand that whether Cochran remained or not, relations between the U.S. and Indonesia would be determined from now on by the relations between the Indonesian Government and the “Claimant Agency”—ECA. I waited about twenty minutes before returning to this statement.

During luncheon I told Colonel Griffin that we were addressing a letter to him which would set forth our views on the curtailment of the ECA program in Indonesia and that we thought it a matter of the highest importance that the Indonesians get no wind of the problems we were discussing until complete agreement had been reached and we could present an united front and more so, that the Indonesians would not be provided an opportunity to deduce that such curtailment could be regarded as punishment for those aspects of their foreign policy which we did not like. Colonel Griffin agreed, said that he would show the letter only to his superiors and asked that it be sent to him by safe-hand.2

I also discussed the inclusion of Mr. Frederick McGuire (recommended by Father McGuire) on the Philippine STEM.

Mr. Griffin again brought up the matter of Mr. Cochran. He said that he had no personal grievance against Mr. Cochran whom, in fact, he liked. He agreed that Mr. Cochran had done brilliant work on Indonesia but he thought his usefulness was at an end. I told Colonel Griffin that I could hardly disagree with him more and that I must warn him in good nature that if he or his agency intended to “get” Cochran, they’d have to take me on too. He laughed and [Page 601] said that he would go to any lengths to avoid that. I questioned him as closely as I could to discover what his real complaint of Cochran was. His answers seemed to boil down to the following:

Mr. Cochran had a psychopathic obsession that he and he alone understood what U.S. policy toward Indonesia should consist in; that other people knew better than Cochran.
That Mr. Cochran had not raised the American flag in front of the ECA building in Djakarta until Bill Foster3 had threatened to telegraph the President.
That the Department’s belief that the ECA program for Indonesia should be curtailed was the result of Mr. Cochran’s view that it should be curtailed; that Mr. Cochran’s view was based on his statement that the Indonesians did not want the program; that he and the ECA people in Indonesia knew perfectly well that the Indonesians did want the program.
That Mr. Cochran hated ECA and all economists anyhow.

I told Colonel Griffin that,

Mr. Cochran had been enthusiastic about the ECA program when it was known as the Griffin program but that since that time, we were convinced the Indonesians for various reasons had decided that they did not want the full program and that as we knew, the Indonesians, since that time, had gotten rich.
That we believed, with Mr. Cochran, that the time had come to press the Indonesians to face the realities of the war between communism and the free world and that Cochran’s view of the curtailment of the ECA program had nothing in particular to do with the larger strategy; that Cochran believed, and we believed, that it was an evident folly to force a large ECA staff on the Indonesians who neither wished nor needed the services that that staff was designed to provide.
That I knew nothing about the flag-raising incident but that I had never heard anybody doubt Mr. Cochran’s long-proven patriotism—although I had heard him described as an American chauvinist.
That the Department of State would continue to make its decisions on the basis of Mr. Cochran’s reporting and his recommendations; that, as he knew, Mr. Cochran and the Department had access to information which ECA did not have; that this would continue to be the case as long as the State Department continued to perform its functions as a foreign office—in short—I would not undertake to make available to Colonel Griffin everything that the Department received on Indonesia because I would continue to hold that the governing political decisions were for the Department of State to make and not for ECA; that Mr. Cochran, far from hating all economists and ECA, had, as a matter of fact, acted as an economic officer far longer than as a political officer, and that I regarded his views on economic matters as particularly valuable.

[Page 602]

Colonel Griffin said that Mr. Cochran had humiliated Americans in Indonesia. When asked to explain this statement, he said that Mr. Cochran had compelled Mr. Smart4 to live in a small room in the Hotel Des Indes while he, Mr. Cochran, had lived in a large house. I pointed out that Mr. Cochran had lived in a small room in the Hotel Des Indes for a year and a half and had made no complaint; that, moreover, Mr. Cochran had turned over to Mr. Smart the best office building he had. I took occasion to ask Griffin if he had any idea how irritating Smart’s activities were to Mr. Cochran. Griffin said no. I asked him if he had read Smart’s letter addressed to him, copy of which Mr. Cochran, as Chief of STEM, had sent to Mr. Merchant5 and me, in which Smart proposed the establishment of certain quasi government organizations in Indonesia in which Americans would serve not as advisers, but as executives. I said that I considered this kind of proposal sheer lunacy and would destroy any possibility of the successful execution of American policy in Indonesia. Griffin said he had not read the letter and was not inclined to do so because, for my information alone, he intended to take Smart out of Indonesia. I asked him if he had read Dr. Warner’s6 speech made in Honolulu. Griffin said he had not. I pointed out that these were examples of the folly and disloyalty which some of Cochran’s ECA staff had exhibited. (I think this impressed Griffin somewhat).

As we parted after lunch, I again told Colonel Griffin that I was determined to work this problem out with him and that I judged our friendship could survive these vicissitudes of official life. He heartily agreed and said that he realized that discussions of this sort were absolutely necessary. We agreed that we would very possibly have to go through some more hot sessions but that we would resolve together to control the situation so that it would not get out of hand and would not contribute to the deterioration of the relations between the Department and ECA. On this happy note, we parted on the steps of the Old State Building at 2:30 p. m.

Addendum to Memorandum of Conversation

On at least one occasion during the course of the conversation described in the foregoing, I took occasion to remark that the happy relations which existed between the STEMs in other parts of Southeast Asia were due to the different circumstances, both political and economic in which the STEMs and our Missions were operating.

  1. Joseph R. McCarthy of Wisconsin.
  2. See footnote 1, p. 596.
  3. William C. Foster, Administrator, Economic Cooperation Administration.
  4. Joseph Smart, Deputy Chief, STEM Mission in Indonesia.
  5. Livingston T. Merchant, Deputy Assistant Secretary of State for Far Eastern Affairs.
  6. Howry H. Warner, Agricultural Officer, STEM Mission in Indonesia.