Office of the Historian

493.56D9/7–1654: Telegram

No. 283
The Secretary of State to the Embassy in Indonesia

secret
priority
Washington, July 17, 1954—2:11 p.m.

72. Department has no objection proposed conversation Ali your 113.1 You will of course avoid any intimation (1) line of action US would take in event Indonesians ship rubber Commie China; and (2) US reconsidering policy inclusion rubber UN embargo.

Agree joint discussion and realistic study of Indonesia rubber industry highly desirable providing such study does not degenerate into debate merit UN embargo and Battle Act. Among points US should make are those Deptel 48.2 As evidence US genuinely sympathetic Indonesians’ rubber problem you may wish cite statement US Delegate Colombo that “US Government willing sympathetically consider in cooperation other interested countries possibility assisting natural rubber-producing countries improve efficiency natural rubber industry” (Deptel 324 to Colombo).3 Indonesians may be advised US did not make this statement lightly and US would be interested Indonesian proposals for specific implementation.4

[Page 450]

In this connection you may wish point to 1) large-scale rubber replanting program undertaken in Malaya where, according to our best estimate, estates have replanted some 300,000 acres since 1946, that a program for replanting 500,000 acres small holdings has been launched and that small holdings acreage reported at end 1952 was over 225,000 acres greater than at end 1947; and 2) to fact that Indonesia will be placed in highly disadvantageous competitive position within relatively few years unless prompt and effective action taken improve efficiency Indonesia rubber production and marketing.

Dulles
  1. Supra.↩
  2. Document 280.↩
  3. Not printed. Reference is to the meeting of the International Rubber Study Group at Colombo in May 1954.↩

  4. On July 19, the Department of State sent the following message to Djakarta:

    “For Embassy’s information and guidance only.

    “Further reference point mentioned last sentence second paragraph Department’s 72. Approved in principle as US Government policy as partial contribution solution rubber problem Southeast Asia particularly Indonesia are:

    • “1. Extending grants surplus agricultural commodities. Proceeds from sale thereof to be used improve production and marketing natural rubber.
    • “2. Extending grant assistance or long-term loans where feasible in association with other countries to improve production and marketing natural rubber.

    “This policy approved subject development feasible integrated program and estimate general cost magnitude.” (Telegram 80; 490.56D9/7–1954)

    This policy was contained in NSC 5417/2, “U.S. Rubber Policy”, approved July 16; for text, see vol. i, Part 1, p. 1226.

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