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

493.56D9/10–254: Telegram

No. 295
The Chargé in Indonesia (Steeves) to the Department of State

secret
priority

Djakarta, October 2, 1954—noon.

540. Excon. Embassy understands from Department’s circular telegram 169, September 30,¹ that Department takes position Battle Act will not be invoked in Pulaski case regardless of destination,² and suggests as future course of action that if Indonesia makes additional shipments of rubber to Communist China US policy be that such shipments constitute de facto withdrawal by Indonesia of rubber from UN embargo listing, and that US then urge Indonesia consider desirability informing UN of withdrawal from list. Embassy’s comments follow:

1. Pulaski case is first breach by Indonesia of UN embargo. As Department aware UN embargo has not been popular in Indonesia. Indonesia abstained on adoption of resolution in 1951 but except for Pulaski shipment has carried out its provisions as loyal member of UN. Opposition to continued adherence embargo has become more vocal lately with many quarters urging government take lead in seeking its rescission. US intransigeance on rubber question is considered by many to be primary cause of serious difficulties now facing Indonesian rubber industry. US continued insistence on embargo of rubber to Communist China has now become definite political liability, is undoubtedly costing us friends, and may jeopardize attainment overall US objectives Indonesia.

2. As reported in Embtel 490, September 23,³ Indonesian Government may be considering unilateral action for withdrawal rubber and tin from list of Indonesia-embargoed commodities.

3. Re paragraph 3, Deptel we should not let Pulaski case pass unnoticed. Although shipment may be justifiably judged “not knowingly permitted” nevertheless it was breach of faith since there were sufficient grounds support presumption rubber destined for China. Indonesians are undoubtedly waiting to see what action we will take in this instance before proceeding with further shipments. Failure to take official notice Pulaski case may be considered sign of weakness on our part especially in view statement made by Ambassador to Prime Minister, on instructions from the Department, and may serve encourage Indonesian Government permit further shipments in violation UN embargo.

4. Re paragraph 4 Deptel⁴ we recommend following alternative course of action vis-à-vis Indonesia:

(a) US should call attention Indonesian Government Pulaski shipment as violation UN embargo, and at same time point out that US does not plan invoke Battle Act in this case for following reasons:

(1) US taking lead in suggesting to countries concerned that they may wish take unilateral action for removal rubber from embargo list and thus not subject to Battle Act action; (2) that we understand Indonesia may be considering unilateral action for removal rubber from UN embargo list; and (3) circumstances surrounding shipment may be considered adding up to “not knowingly permitted”.

(b) At the same time urge Indonesian Government (1) take necessary action for removal of rubber from list; (2) not permit any further shipment rubber to Communist China until such action completed; and (3) continue embargo in all respect except for tin which no longer title two commodity.

(c) Above action should be taken earliest possible. Nothing to be gained by waiting until additional shipments rubber made by Indonesia. If Pulaski case goes by unnoticed by US Indonesia will undoubtedly make additional shipments. Timing is important, and in our opinion we stand to gain by taking the initiative and acting before our hand is forced. To back down on Battle Act enforcement after additional shipments to Communist China, which after Pulaski operation may be made openly, may cost us more politically and psychologically than we stand to lose by immediate action along lines suggested above.

5. Re paragraph 5, Deptel we concur with action proposed.⁵ However, we would appreciate clarification whether Indonesia would be expected continue pre-shipment controls and report all exports since US and Indonesia have not entered into agreement on basis Section 202 of Battle Act.⁶

Steeves

1. This telegram requested comments from a number of posts on the wisdom and feasibility of retaining rubber on the list of strategic goods embargoed to North Korea and mainland China and kept under surveillance with regard to the European Soviet bloc countries, particularly in light of the Indonesian situation where continuation of the embargo on rubber sales to China might cause the United States more political disadvantages than benefits. (460.509/9–3054)
2. The Department of State was in receipt of numerous unconfirmed reports that the Pulaski had proceeded to a mainland Chinese port where it was discharging its rubber cargo. Circular telegram 169 referred to a “top level determination in Pulaski case that Battle Act would not be invoked regardless of destination”. A policy briefing paper compiled by the Executive Secretariat of the Department of State, Sept. 12, stated: “The President has indicated that he ‘does not want this shipment by Indonesia to create difficulties for the United States in that country’, and action under the Battle Act adverse to Indonesia will not be taken.” (FE files, lot 55 D 480, “Policy (Hoover) Briefing Book for FE”) See also footnote 3, Document 278.
3. Not printed.
4. Paragraph 4 of circular telegram 169 suggested that the United States take the position, if further rubber shipments to China were made, that Indonesia’s action constituted de facto withdrawal of Indonesia’s listing of rubber under the U.N. embargo resolution and urge Indonesia to inform the United Nations of its intent to withdraw rubber but continue embargo coverage in all other respects. Other areas, such as Ceylon and Malaya, could then be informed that the United States would accept something less than a complete embargo of rubber to mainland China under the Battle Act.
5. Paragraph 5 suggested a more immediate course of action based on informing concerned countries that a more limited form of controls would be acceptable, such as continuing pre-export controls and reporting on all exports, permitting unilateral withdrawal of rubber from the embargoed list provided that the U.N. resolution would be continued in other respects, and requesting that countries be prepared to reinstitute control of rubber to China in the future should circumstances warrant.
6. In response to telegram 540, the Department on Oct. 16 cabled that the Pulaski case would not pass unnoticed if a violation of the U.N. resolution was definitely demonstrable. There was no conclusive evidence that the Pulaski’s rubber cargo had been discharged in Communist China. If the Pulaski called at London, the Department hoped to ascertain whether the rubber had been discharged. Meanwhile, the matter continued to receive active consideration. (Telegram 453 to Djakarta; 493.56D9/9–1054)