Foreign Relations of the United States, 1952–1954, East Asia and the Pacific, Volume XII, Part 2

756D.5 MSP/6–652: Telegram

No. 203
The Secretary of State to the Embassy in Indonesia

secret

Washington, June 6, 1952—6:18 p.m.

1290. 1. Fol memo addressed May 12 by Lincoln Gordon, Office of Director Mutual Security, to Allison “I understand impression has erroneously been created and communicated to Djakarta that deliveries mil assistance to Indo if provided on reimbursable basis under 408(e) MDA Act wld have lower priority than same items if delivered as grant assistance. This impression, although understandable, not correct.

“The priorities policy on mil assistance recommended by JCS and approved by Secy Defense explicitly applies to assistance under 408(e) on same basis as to grant assistance. Priorities are determined by importance of the requirement and the relative time urgency of fulfilling that requirement, to the security of the US, and are not affected by question of reimbursement. You will of course understand absurdity of a policy of automatically giving lower priority to cases where US is repaid.

“Correctness this clarification has been confirmed by Defense. I wld appreciate it if you wld arrange to remove any misunderstanding in minds our officials in Djakarta which may exist on this pt”. Substance this para rptd in ltr May 23 Gen Olmsted (signed Harvey Fischer) to Col Nestlerode MAAG Chief Indo.¹

2. It has been recognized Indo is easily able pay for mil supplies including approx two million dols worth equipment as yet undelivered under five million dol constabulary program. Therefore any mention reimbursable aid this connection has been made by Dept only as related to much more significant problem of determining manner in which Indo ability to obtain mil equipment from US might be affected by Indo shift from 511 (a) to 511 (b). Dept has conveyed to Emb impression that priorities more easily granted for defense items destined to our allies and to 511 (a) countries than to other countries. Defense Dept and DMS now inform Dept on this important pt as fols:

a. If Indo Govt with US consent replaces Indo Jan 5 commitments under 511 (a) with commitments acceptable only under 511 (b), this wld in itself have no legal effect in determination of “importance of requirement…² to the security of the US” (re DMS criterion stated para 1). In addition so far as is now foreseeable, shift from 511 (a) to 511 (b) wld not in itself have any practical effect on priorities any mil equipment which Indo govt may wish obtain from US. Always possible that US Govt’s overall evaluation strategic importance arming Indo cld change result pol mil developments. For time being, however, change in priority status Indo not anticipated if 511 (b) substituted.

b. Drop from 511 (a) to 511 (b) expected have no effect on timing deliveries balance mil aid under present constabulary program assuming Indo expeditious compliance necessary requirements for 408(e) transactions. Further tel re eligibility requirements for reimbursable and under 408(e) follows shortly.³

3. Pls convey above info ur discretion to Indo auths in order eliminate any misunderstandings concerning priorities such as suggested third para Embtel 1736 May 29.⁴

Acheson

1. Not printed. Maj. Gen. George H. Olmsted was Director of the Office of Military Assistance, Office of the Secretary of Defense.
2. Ellipsis in the source text.
3. Not printed.
4. The third paragraph of telegram 1736 seemed to convey the understanding of some Indonesians that substitution of a 511 (b) for a 511 (a) agreement would involve the loss of highest priority for police and other defensive or support equipment being supplied by the United States. (756D.5 MSP/5–2952)