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

158. Memorandum of a Conversation, Department of State, Washington, May 17, 1956¹

Washington, May 17, 1956

SUBJECT

• U.S.-Indonesian Relations

PARTICIPANTS

• Roeslan Abdulgani, Indonesian Foreign Minister
• Moekarto Notowidigdo, Indonesian Ambassador
• The Secretary
• Walter S. Robertson, Assistant Secretary for FE
• Hugh S. Cumming, American Ambassador to Indonesia
• James D. Bell, Director for SPA²

Mr. Robertson and Ambassador Cumming briefly told the Indonesian Foreign Minister and Ambassador Mukarto of the excellent impression being made by President Sukarno, and particularly referred to his talks at the Vice President’s dinner May 16 and before Congress May 17.

Foreign Minister Abdulgani stated that he would like to stress details “of the general picture” and said that his country hoped, now that the general elections were over, to normalize their relations with the Dutch and the Japanese. He pointed out that these relations also have an effect on Indonesian-U.S. relations. He stated that the Indonesians had negotiated many times with the Dutch and had failed to reach any agreement. As a result the Indonesian Parliament had unanimously voted to abrogate all the round-table agreements with the Dutch including the financial and economic accords and the transfer of sovereignty agreement. He stated that this action would not affect third parties but that it would eliminate the special position, the preferences, which the Dutch now enjoy.

With respect to West Irian the Foreign Minister said that his country considered the area to be “an essential part” of Indonesia and the question should be essentially a colonial issue. Aside from the fact that all Indonesians wished the return to Indonesia of an area considered to be an integral part of the Republic, Indonesian military people considered the area to be important to Indonesia’s security—that its retention by the Dutch constituted a threat to Indonesia. Moreover, he thought that the West Irian area was of importance to the U.S. since in addition to our defense arrangements in the Far East through alliances, he felt that our position would be strengthened by having a friendly and peaceful Indonesia behind our defense lines. Abdulgani said that he was, of course, aware of our policy but that now with the elections over and the major parties united in a stable coalition, he hoped very much that we could “be more than neutral”.

Speaking of Japan the Foreign Minister pointed to the suffering the Indonesians had undergone during the occupation. Despite this, he said that during the Asian-African Conference an attempt was made to bring Japan into the picture and assure greater cooperation with the Japanese.

Mr. Abdulgani said that he hoped the U.S. would give its attention to the question of reparations. He referred to previous discussions with the Japanese on this matter and mentioned an interim agreement which provides for salvage of sunken vessels. He stated that the Japanese had made an offer of $250 million, which the Indonesians found completely unacceptable. He indicated that he hoped to have sympathetic United States cooperation in reaching an agreement with the Japanese.

Mr. Abdulgani stated that now the Indonesian elections are over the time had come to develop a more solid basis for long-term U.S.-Indonesian relations.

The Foreign Minister said his Government had developed a five-year economic plan which he fully expected to be endorsed by the Indonesian Parliament and which would require from 11 to 12 billion rupiahs, which he estimated at about one billion dollars.

Referring to the exchange of persons program the Foreign Minister stated that the present program was producing good results and that he hoped we would be able to produce even better results in the future. He expressed the hope that the exchange of teachers and students could be balanced with more emphasis on exchange of persons in technical fields and that exchanges could be on a longer-term basis. He suggested the desirability of making full courses for technical training available. It was his belief that greater technical assistance, meaning availability of technical training, would be of great mutual benefit. Subsequently, referring to “scientific help”, he said that rather than get into the field of atomic reactors, etc., Indonesia would like to have U.S. technical aid to explore the availability of atomic raw material. He apparently was interested in a team that would conduct a geological survey in the hope of locating uranium.

Ambassador Cumming pointed out that the situation with respect to the exchange program could be improved if agreement were reached on a Fulbright program for Indonesia. The Foreign Minister was not informed on this subject but indicated he would discuss it further with Ambassador Cumming.

The Secretary stated that the problems between Indonesia and the Netherlands presented great difficulties for us as we were friends of both countries. He recalled the role the United States played in Indonesian struggle for independence. He referred briefly to some of the problems that arose from our struggle with the British for independence and pointed out that they were the same type that Indonesia now faces. He recalled that Washington, Franklin and Adams had advocated a policy of moderation and that although we never paid all of the British claims against us in full, we did pay 65 to 75 per cent and that many of our greatest leaders had urged complete payment.

Referring to the general atmosphere surrounding Indonesian-Dutch relations the Secretary said that a great improvement could be achieved if the Indonesians could stop the trials of Dutchmen now under indictment in Djakarta. He pointed out that these trials made the Dutch extremely angry. He referred to attacks on him by the Dutch Press for his statements in Djakarta. The Secretary said that although he had no knowledge of the merits of the case of the Dutchmen, in the interest of improving relations and influencing world opinion, it would be wise to be magnanimous. He stated that he was fully aware that it was not proper for one government to interfere in the internal affairs of another and that he had no intention of doing so, but that Indonesian action to eliminate this source of irritation would be an act of statesmanship.

With respect to West Irian the Secretary said that we would continue to adhere to our policy of not taking sides. He stated that in our view the legal case is not clear and the moral case is not clear. The inhabitants are not of the same race as the Indonesians, and from their standpoint the choice appeared to be between Dutch or Indonesian Colonialism. He said that it was our belief that the inhabitants of West Irian had not developed sufficiently to enjoy self-rule and that they were not ready for self-government or independence. The Secretary did not feel that he would be justified in expressing an opinion on the merits of the case. He did, however, say that our policy in this respect was more unsatisfactory from the Dutch view than it was from the Indonesian.

The Secretary pointed out that we have encouraged and will continue to encourage the Japanese to restore normal relations with the Indonesians by a proper settlement of the reparations issue. He told the Foreign Minister that Indonesia must take into consideration that the Japanese economy is not strong and that it would not be easy for them to undertake large payments. He said that the United States in effect has supported Japan for the last 10 years. The Secretary pointed to his experiences working on reparations at the Versailles Conference in 1919. He stated that the exaggerated settlements which the allies attempted to extract from Germany had a great deal to do with the rise of Hitler and World War II. He said that in the negotiation of the Japanese Peace Treaty³ he had tried to avoid the mistakes made at Versailles. He felt that the Indonesians should be aware of the necessity for keeping their demands within reasonable limits. Now that a Philippine settlement⁴ had been reached the Secretary thought an agreement with Indonesia would be possible and that we were prepared to do what we could to promote good will by Japan with respect to an Indonesian settlement.

The Secretary said he fully realized the necessity for Japan to develop stronger economic and commercial relations with Southeast Asia. He expressed the view that it was a mistake to believe that Japanese trade with Mainland China had ever been of great significance except when Japan controlled Manchuria. He also pointed out that trading with Communist countries had almost never proved beneficial, due in part to state control of all trade.

Mr. Robertson urged the Indonesians to take into consideration the Japanese capacity to pay in any reparations discussions.

The Secretary said he believed the Foreign Minister was correct in stating that exchange of persons on a long-term basis would be preferable to the present system of four-month tours by leaders or one-year grants to students.

The Secretary said that we had been discussing with the British limited rubber shipments to Communist China, particularly from Malaya and Ceylon. He said that if anything were done in this respect he would want Indonesia to be in as good a position as Malaya.

In answer to a question by Mr. Robertson, the Foreign Minister said that Indonesia had a rubber surplus but he subsequently said that they sold on the world market almost their entire production last year. The Foreign Minister asked if the rumor in Djakarta that the United States was going to put a large part of its rubber stockpile on the market were true. Mr. Bell said that no decision to this effect had been taken.

Mr. Robertson stated that we had information that Communist China had about all the rubber it needed and that it would be a mistake to believe that opening up the Chinese Communist market would solve all the problems of rubber. He pointed out that some of the rubber which the Chinese Communists had obtained from Ceylon had been shipped to Czechoslovakia. The Foreign Minister said that his information was to the contrary and that the Chinese Communists had indicated to the Indonesian Government that they were very anxious to get rubber—that they need more than they now get. He said they wanted an appreciable amount of small-holder (low grade) rubber.

Referring to the trials of Dutch citizens in Djakarta, the Foreign Minister said that the situation was complicated because of the difficulties with respect to Darul Islam. He stated that there were direct connections with the Darul Islam movement and the trials. He pointed out that the Moslem Parties were cooperating with the PNI in a campaign to crack down on Darul Islam. He also pointed out that the matter of the Dutch defendants was already in the hands of the court. Ambassador Mukarto said that while the Indonesians have given the Dutch defendants a fair trial the Dutch had not given a fair trial to Indonesians arrested in West Irian.

Ambassador Cumming stated that even American newspapermen most sympathetic to Indonesia had remarked on the desirability of the Indonesians doing something about the trials because of the bad atmosphere they created. He said that even speeding up the trials would be of some help. The Foreign Minister said that this would be done in the case of the Schmidt trial.

Mr. Robertson stated that some years ago during the period when Sunario was Foreign Minister, we had discussed with the Indonesians the desirability of negotiating a treaty of Friendship, Commerce, and Navigation. Although we had initially received a favorable response we have heard nothing more of the proposal. The Foreign Minister was not familiar with this matter and made no comment.

1. Source: Department of State, Central Files, 611.56D/5–1756. Secret. Drafted by Bell.
2. On April 1, the Office of Philippine and Southeast Asian Affairs was replaced by the Offices of Southeast Asian Affairs and Southwest Pacific Affairs.
3. Signed at San Francisco on September 8, 1951; for text, see 3 UST (pt. 3) 3169.
4. For text of an agreement on reparations between Japan and the Philippines, signed at Manila on May 9, 1956, see 285 UNTS 3.