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

S/P–NSC files, lot 62 D 1, NSC 171 Series

No. 278
Memorandum by the Executive Officer of the Operations Coordinating Board (Staats) to the Executive Secretary of the National Security Council (Lay)

top secret

Washington, July 12, 1954.

Subject:

• Transmittal of Progress Report on NSC 171/1 (Indonesia).

References:

• (1) NSC Action No. 962.¹
• (2) Memorandum from the Executive Secretary, NSC, dated November 20, 1953.²

On November 20, 1953 the President approved NSC 171/1, “United States Objectives and Courses of Action with Respect to Indonesia” and designated the Operations Coordinating Board as the coordinating agency.

Attached hereto is the progress report on implementation of NSC 171/1, covering the period through May 31, 1954. The report was approved by the Operations Coordinating Board on July 7, 1954.

With reference to Para. C. 2 of NSC 171/1, viz., increasing the training of Indonesian military officers in U.S. military schools, the OCB agreed that the Defense Department will endeavor to finance the trainees and that other agencies, directly or indirectly interested in this problem, will see if they can assist.

On July 7, 1954, subsequent to the date of the progress report, the Operations Coordinating Board also noted and discussed recent intelligence that the Polish ship Pulaski has loaded in Djakarta 200 tons of an estimated 6000 ton rubber purchase with the apparent intention of proceeding to Communist China in violation of the UN embargo. The Department of State called in the Indonesian Ambassador on July 3 and our Ambassador in Djakarta is making representations with the Prime Minister and possibly the Vice-President in an attempt to persuade the Indonesian Government to prevent or divert the shipment. The Operations Coordinating Board noted that this matter is presently being handled through diplomatic channels.³

Elmer B. Staats

[Attachment—Extract]

July 1, 1954.

Progress Report On NSC 171/1 United States Objectives And Courses Of Action With Respect To Indonesia⁴. At the Aug. 12 meeting (NSC Action No. 1204), the NSC reaffirmed the policy on Indonesia contained in NSC 171/1, subject to the changes made in paragraphs 19 and 21 (as set forth in paragraph 12 of NSC 5429/2). (OCB files, lot 62 D 430, “Indonesia”)

(Policy approved by the President November 20, 1953)

a. summary of major actions

Limited progress has been made in implementing the courses of action set forth in NSC 171/1, as follows (paragraph references are to Annex A):

(a) Agreement to purchase tin under the third year of the RFC-Indonesian contract and announcement of U.S. policy withholding from world markets tin in excess of stockpile objectives (para. 20b).

(b) Agreement on an FOA project for training and equipping the Indonesian Police (para. 26).

(c) At the Indonesian Government’s request, supplying ample anti-Communist legislation (para. 15).

(d) Opening negotiations on an Information Media Guarantee Program (para. 27).

(e) Opening negotiations on a Treaty of Commerce and Navigation (para. 23).

(f) Preliminary discussions on, and study of the feasibility of furnishing U.S. officers under individual contract as instructors in the Indonesian Army (para. 26).

(g) Preliminary discussion of a state visit for President Sukarno in 1955 (paras. 12 and 18).

(h) Improved conditions with respect to the U.S. technical assistance program (Indonesian financial deterioration impedes progress of the program) (para. 22).

(i) Increased training for Indonesian Army officers in U.S. military service schools (para. 26).

(j) Carrying out and strengthening informational activities (para. 27).

. . . . . . .

Only limited action has been possible with respect to rubber (para. 20a).

No solution favorable to the U.S. of the Dutch-Indonesian dispute over New Guinea has been found. An attempt has been made to discourage Indonesian action which would bring the New Guinea issue into the UN (para. 25).

. . . . . . .

1. See footnote 7, Document 254.
2. Document 255. It transmitted NSC 171/1 to the NSC.
3. At the NSC meeting on July 15, in connection with consideration of NSC 5417/2, “U.S. Rubber Policy” (for text, see vol. i, Part 1, p. 1226), mention was made of the reported shipment of Indonesian rubber to the People’s Republic of China. President Eisenhower observed that he thought it would be a first-rate idea to have Indonesia sell its low-quality rubber to Communist China and then commented that it would be best for the United States to turn its “blind side” to the transaction. (Eisenhower Library, Eisenhower papers, Whitman file)
4. In a memorandum dated Sept. 28, Staats informed the Operations Coordinating Board that the progress report was used by the NSC as a basis for discussion of NSC 5429/2, “Review of U.S. Policy in the Far East”, on Aug. 12 and 18; for text, see Part 1, p. 769