Foreign Relations of the United States, 1955–1957, Southeast Asia, Volume XXII

128. Telegram From the Embassy in Indonesia to the Department of State¹

Djakarta, December 21, 1955—5 p.m.

1465. Deptel 1033.² I believe we should proceed with negotiations PL 480 program on assumption “AURI affair”³ will be worked out and present Govt will continue in power until formation of new Parliament possibly April. As we have previously pointed out our attitude toward present Govt will not only affect its ability to stay in power but will also have bearing on nature and orientation of Govt based on newly elected Parliament. We should not therefore be first to assist in pulling rug out from under present Cabinet which while have [sic] net effect postponement negotiations.

Although final results September elections not yet in, prospects indicate that non-Commie Govt will be formed excluding Commies although not yet clear whether will be led by PNI or Masjumi. Would seem to us advantage however, no matter which party leads new Govt, to strengthen hand of any non-Commie Govt which may emerge even though it may not be as friendly to US as present Cabinet. No Govt will be able to meet fully Indo’s present economic needs without assistance from abroad. To withhold assistance from any future non-Commie Govt might force it to seek help from other sources. It would seem therefore we should continue negotiations with present Govt in order to strengthen its position and hope thereby favorably affect formation post-April Govt, and implement agreement with any non-Commie Govt.

Emb assumes program will also include rice (Embtel 1027⁴) in addition commodities listed Deptel 1033.Emb attempting obtain info on rice as requested Deptel 1027 which will be reported separately.

On total and composition of suggested increases regrettable that proposed figures still below original Indo request of $24 million and particularly that composition is so heavily weighted against wheat. Wide discrepancy between tobacco and wheat figures likely to have unfavorable public repercussions playing into hands of ready snipers and detractors of PL 480 programs (despatch 341⁵). I hope therefore we can bring total up to $24 million if possible by increasing wheat and dairy products, although I am aware of problems involving other countries normal trade Indonesia.⁶

Cumming

1. Source: Department of State, Central Files, 411.56D41/12–2155. Secret; Priority.
2. Telegram 1033 to Djakarta, December 19, reported that interagency agreement was tentatively reached on a P.L. 480 program for Indonesia at a level of $19.1 million for 1 year in cotton, tobacco, dairy products, and wheat, but that in view of the uncertain political situation, especially relating to the Air Force disorder, the Department wished to have the Embassy’s assessment of the advantages and disadvantages of proceeding with negotiations. (Ibid., 411.56D41/12–1555)
3. See footnote 6, Document 126.
4. Telegram 1027 from Djakarta has not been found. The reference is apparently to telegram 1027 to Djakarta, December 16, which informed the Embassy that informal discussions were held the previous day with representatives of the Burmese, Thai, and Indonesian Embassies to make clear the U.S. position that any U.S. sale of rice to Indonesia under the P.L. 480 program should not materially injure Burma’s and Thailand’s rice trade. It also informed the Embassy that the United States was willing to offer the Indonesians up to 250,000 tons of rice provided that they purchased the usual marketings of Burmese and Thai rice and that the Indonesian Government and the Embassy in Djakarta could justify this quantity. (Department of State, Central Files, 411.90B41/12–1655)
5. Despatch 341 from Djakarta, December 6, reported that several recent editorials in the Indonesian press had criticized the P.L. 480 program. (Ibid., 411.56.41/12–655)
6. Telegram 1064 to Djakarta, December 23, authorized the Embassy to tell the Indonesians that the United States could meet the Indonesian request for 250,000 tons of rice provided that U.S. relations with Burma and Thailand would not be impaired by material injury to the normal Burmese and Thai exports to Indonesia. (Ibid., 411.56D41/12–2355)