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

756D.5 MSP/1–2353: Telegram

No. 243
The Acting Secretary of State to the Embassy in Indonesia

confidential

Washington, January 31, 1953—12:43 p.m.

1211. For the Ambassador from Allison.

1. I greatly regret the misunderstanding which apparently has arisen in connection with the non-transmission to the Indonesians of the reimbursable aid draft (Embtel 1355).¹ I have discussed this matter in some detail with the officers concerned and I believe that there are certain points which require clarification. I hope that after reading the following, based on a memorandum from PSA, you will agree that there was certainly no desire on the part of the Department to be unfair either to you or to the Indonesians.

2. It is desk officer’s belief his frequent conversations with you here were full and frank, and he did not suspect misunderstanding existed on question when present reimbursable aid draft. This draft (Deptel 812)² prepared with your concurrence November 26. Department planned furnish draft Indonesia Embassy “within few days” (Deptel 811)² unless Embassy Rangoon objected. Rangoon reported no objection November 28. Returning Washington after week’s absence, desk officer brought Rangoon message your attention second week December. He does not recall he then informed you (reftel 3rd paragraph) “effort would be made get document in Mukarto’s hands before he left United States”, since it then known Mukarto in Germany having left United States about November 26. Desk officer believes and has acted on assumption you stated your approval that presentation of draft be delayed in view new developments Indonesia early December.

3. These included: (a) new flareup Cabinet crisis with rumors imminent resignation Defense Minister and serious Army factionalism, which if unresolved might make end-use control difficult if any equipment requested as reimbursable aid; (b) Indonesian Government’s statements December 4 and 13 showing progress toward new Economic Aid Agreement, which in above circumstances could have been disturbed by United States initiative on military type of agreement regardless exact wording. Indonesian attitude this point currently shown by your recommendation Embtel 1350 that proposed press release should include statement “No aid other than TCA … requested by Indonesians or suggested by United States”.³

4. Reimbursable Aid draft therefore not presented before receipt Indonesian Note January 5, 1953 formally proposing new 511 (b) Agreement, and not discussed further with you during remaining consultation here through December 31. Department practice has been notify you whenever it presents important document Indonesian Embassy. In absence such notification, verification status of reimbursable aid draft could have been requested before conclusion new 511 (b) Agreement January 12. Misunderstanding possible, but any “unfairness” to you unintentional.

5. Following Indonesian Cabinet fall February 23, 1952, over 511 (a) Agreement, Department policy has been to leave Indonesian Government initiative on possible Reimbursable Aid Agreement, as on new MSA Agreement concluded January 12 with general favorable press reaction and official Indonesian statement appreciation United States aid. In response Indonesian Note September 9, Embassy Note 52 to Foreign Office September 22 formally stated United States readiness receive requests for reimbursable aid and supply information on procedure. Department officers orally repeated same assurance in response Foreign Minister’s inquiry November 14. Indonesian Government accordingly in position ask for exact wording reimbursable aid terms under United States Public Law, if it had wished do so before making its January 5, 1953 formal proposal carrying out its obvious intention replace 511 (a) with 511 (b) Agreement. Department finds it hard believe that Indonesian decision reject 511 (a) would have been altered by full and specific information as to conditions to which Indonesia will have to comply to procure military equipment on reimbursable basis after original Agreement replaced, in view MSA history Indonesia and fact that general nature conditions reimbursable aid are known and Department has indicated its readiness supply details. Department does not consider above procedure “unfair” to Indonesians. (Memorandum ends.)

6. I hope you will agree that this regrettable misunderstanding should not deter attempts to solve major United States-Indonesian issues cited paragraph 5 urtel 1314 January 20. It is believed that friendly but non-committal United States interest at this time might strengthen hand of Mukarto who apparently attempting hold line against Indonesian rubber shipments to Communist China. It is suggested this interest could be shown simply by supplying reimbursable aid draft now pursuant to Mukarto conversation January 20. We believe it desirable to take this action as soon as possible and in accordance with our desire to keep aid negotiations concentrated in Djakarta we had hoped you would present the reimbursable aid draft to Mukarto. In view of the above explanation this is still our hope. However if you continue to feel that this is unwise, we are prepared alternatively to give the draft to the Indonesian Embassy in Washington and explain it fully to the Ambassador. Please let me have your comments.⁴

Matthews

1. Supra.
2. See footnote 4, Document 235.
2. See footnote 4, Document 235.
3. Ellipsis in the source text. Telegram 1350, Jan. 23, is not printed. The press release referred to was one under consideration to correct erroneous reports in the Indonesian press that the United States was considering an aid program of $200 million to Indonesia. The press release was not issued, particularly in view of a statement by the Foreign Minister that he knew nothing of a $200 million offer. (856D.00 TA/1–353)
4. No response to this message has been found in Department of State files, nor is there any documentation which indicates that the draft reimbursable aid agreement was shown at this time to Indonesian officials either in Djakarta or Washington. Later, on inquiry from the Indonesian Embassy on the subject, a copy was shown to Max Maramis, the First Secretary. (Memorandum of conversation by Coerr, June 29; 756D.5 MSP/6–2953)