Foreign Relations of the United States, 1951, Asia and the Pacific, Volume VI, Part 1

398.2395–R0/4–2051: Telegram

The Ambassador in Indonesia (Cochran) to the Secretary of State

secret

Djakarta, April 20, 1951—5 p. m.

1468. Embtel 1390 Apr 10 [7].¹ Today Fon Min Roem and I formalized agreements supplementing Wilson–Sumitro rubber contract signed April 7 by exchanging fol signed (secret) notes. Full text being pouched to Dept.²

(1) Emb note 332 Apr 7 (as authorized by Deptel 1042, Mar 27 and Deptel 3815, Feb 15 to London repeated Djakarta 863³): Ambassador of US assures FonMin of RI that Govt of US “will (1) employ to the maximum such Governmental authority to direct goods for civilian consumption as is being or will be used for any other country in order to implement present Export–Import Bank projects and (2) use its best offices, subject to its own defense needs and those of its allies, to assist Indonesia to obtain basic civilian needs, as these may become defined through later presentation and mutual examinations”.

(2) FonMin note 15915 April 7.

FonMin of RI assures Amb of US that Govt of Indonesia “will use its best offices to assist the United States of America to obtain the latter’s requirements of rubber from Indo as these may become defined through later presentation and mutual examination”.

(3) Today Coerr presented to Darmawan Indo Govt’s copy GSA contract No. GS–00P(D)6397 signed by Sumitro and Wilson at Djakarta April 7 which Wilson and Coerr completed at Bangkok April 8. Emb retains one signed copy.

In recapitulation contract provides that in 18 months’ period. Sept 1951 to March 1953, Indonesian Govt will ship approx 1200 long tons estate rubber to US monthly. Deliveries to be F.O.B. Djakarta ocean carrier destined for US as evidenced by signed bill. Price paid per pound for each grade rubber delivered 44-month period and ultimate 22-month period shall be 3 percent less than average total published official Singapore prompt shipment (closing) price for each grade in calendar month immed preceding such period. Payment 100 percent on delivery subj future settlement any dispute re quality and condition affecting price (ref Embtels 1367 April 4 and Deptel 1075, Apr 4⁴).

Comment: Having obtained Indo note on rubber balancing US note re Indo civilian requirements, US Govt is in position to prevent Indos from abusing the US commitment. In addition to this negative value, exchange of notes and signing of contract may be useful politically as symbol Indo–US cooperation, and economically as basis further negots looking toward larger bilateral rubber agreement.

Contract itself, covering about 21,600 tons at estimated value $36,288,000 (based on estimated average price 75 cents per pound) appears good business deal by reason 30 cents pound Singapore prices. In my opinion, exchange of notes, plus contract covering the only rubber over which Indo Govt exercises direct control, represent maximum that cld be expected from initial rubber negots held here prior Rome conf.

Cochran

1. Not printed. The Department of State did not publish this accord in TIAS because the Indonesian Government asked that no publicity be given to the agreement, as reported by Ambassador Cochran in telegram 1390 from Djakarta, April 7, (856D.2395/4–751). In this same connection, neither Ambassador Cochran’s Note No. 332 of April 7, nor Foreign Minister Rum’s Note No. 15915 of April 7, which are both quoted in Embassy telegram 1468, were made public.
2. Not printed; the original copies of the agreements supplementing the rubber contract of April 7, may be found in file 856D.2395/4–2451.
3. Not printed, but see footnote 1, p. 628.
4. Neither printed.