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

493.56D9/7–1254: Telegram

No. 279
The Ambassador in Indonesia (Cumming) to the Department of State

secret

Djakarta, July 12, 1954—5 p.m.

72. Deptel 39.¹

1. I fully realize dilemma posed by possible Indo rubber shipment China. Of one thing I feel certain, however, and that is invocation of Battle Act, should rubber in fact be shipped, will on balance obstruct the attainment of our objectives Indonesia. Our primary objectives are to stem any drift of Indonesian policy away from one of “independence” toward the Soviet bloc, to slow down and ultimately to turn back slow Communist influence within the government, and in the long run to deflect Indo policy towards a voluntary understanding and support of the US position in world affairs. Termination of our aid program would not only, I think, be used against us by the anti-American elements in Indo—and they are not all Communist—but would for at least a measure of time distress our friends and weaken their quiet but nonetheless influential efforts to reduce Communist effectiveness even if they cannot orient Indo policy immediately in our direction. Termination of our barely begun program of assistance to the national police, a program agreed to by Ali not without, I am sure, considerable soul-searching, would alone be severe setback.

2. I am quite certain that Ali understands very clearly that shipment of rubber to China would involve mandatory consideration such action under pertinent provisions Battle Act. (Two days after my call on him the Foreign Office asked Embassy for full text of all provisions US law this point.) However, I was very careful in my conversation with Ali not to emphasize that “mandatory consideration” necessarily meant termination of aid as I wished to reserve for Department the fullest freedom of action in this respect. This did not in my opinion detract in any way from the earnestness of my representations. I entirely agree with Department that we cannot afford to bluff.

3. With regard to questions posed paragraph 4, reference telegram:

(a) I consider it likely that Indo economy will continue to deteriorate but that for at least some months resulting political repercussions will not in themselves be of sufficient strength to jeopardize position Ali government nor do I yet see any early basic revision of Indo policies and practices which have led them into their present economic and financial plight. I am not in position to estimate what effect current Indo-Dutch negotiations will have. For further discussion this point see latter portion my telegram 1533.²

(b) At this time I do not feel that such internal pressures as may be caused by economic deterioration will bring into power an even less friendly government; nor do I believe that for some time at least Masjumi or PSI would want to bring down Ali government and themselves fall heir to the present economic and financial mess.

(c) Unless “additional US aid” means substantial economic aid or a liberal loan in line of credit, I do not believe increased US aid could have any immediate effect in reversing current economic trends as these are due primarily to unsound policies.

(d) See paragraph 1, above. Furthermore, Battle Act invocation would be regarded by many Indos of all political shades as proof our aid program primarily bribe to bring Indonesia into our camp in cold war. While it is possible that Battle Act invocation might lead Indos to strengthen economic ties with Eastern bloc, I believe more likely Indos would attempt fill vacuum by increased calls upon UN and Colombo plan technical assistance.

4. With regard antepenultimate paragraph reference telegram, I believe invocation Battle Act would strengthen position Ali government. Pro-government press and politicians would praise Ali for courageous implementation independent foreign policy and strongly nationalist emotions aroused by termination US aid would make it difficult for moderate elements both in government in opposition to criticize Ali government decisions ship rubber China. Initially moderate voices would have to be small and hesitant and could not make themselves heard unless and until Ali policies and resultant termination US aid really hurt.

5. Re penultimate paragraph reference telegram, I am inclined against asking for a commitment that no shipment other than that of Pulaski be made. This would remove all doubts which I am sure are currently troubling Ali about advisability of first shipment.

Cumming

1. Document 277.
2. Dated June 24; in it Ambassador Cumming expressed the view that the Ali Cabinet would probably not fall in the next 6 months over the issue of the deteriorating economic situation. He also felt that the extension of direct U.S. aid would help the Ali government but, on the other hand, withholding the aid would not seriously shorten the life of the government. Furthermore, any offer of U.S. aid, while it might be accepted, would almost certainly be interpreted as an effort to buy Indonesian support and sympathy in the cold war and would probably make the Ali government less rather than more inclined to put its economic and financial house in order. (398.13/6–2454)