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

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

Djakarta, July 11, 1957—3 p.m.

102. Re Deptel 28.² I discussed substance of reftel with Foreign Minister this morning. I told him that for all practical purposes I believed Indonesia could not expect to obtain credit arrangements for greater than three years and that, of course, there was no guarantee that even this could be done. I pointed out that such military equipment as might be available had many calls upon it and that obviously those countries which had mutual security arrangements with United States would receive first priority. Foreign Minister understood this perfectly and said in this connection: “If I were Foreign Minister of Turkey or Pakistan I, too, would probably advocate collective security arrangement with America.”

Foreign Minister inquired whether credit arrangements for three years would require any assurances other than those contained in letter of March 14³ and when he was told no further agreements would be necessary except on terms of loan he said it would now be possible for him to recommend to Cabinet that Indonesian list be submitted to United States. He said very specifically that his government at this time would not wish to make any agreement which required assurances greater than those in its letter of March 14 and he quite understood when I told him that this would in all probability preclude receiving grant military aid. I do not believe it wise at present to recommend use of special Presidential fund under Section 401 (a) of Mutual Security Act. Subandrio then said it was not certain that Indonesia would request any credit at all but that he merely had wanted to get facts straight before question was put to Cabinet [garble] hopes to have Secretary General of Defense Department turn over Indonesian lists to Army Attaché within short time. Foreign Minister volunteered statement that, of course, this whole matter should still be considered “without commitment” on either side.

I anticipate we may receive lists next week and I stressed to Foreign Minister advisability that items on list be stated in terms of priority.⁴

Allison

1. Source: Department of State, Central Files, 756D.56/7–1157. Secret.
2. Telegram 28 to Djakarta, July 3, stated that after receiving a list of Indonesian requirements, the United States could consider arrangement of up to 3 years credit; up to 10 years credit was possible but unlikely. It stated also that grant aid could be furnished only by one of two means, both of which would require a high-level U.S. decision: (1) Indonesian agreement to the conditions of eligibility set forth in Section 142a of the Mutual Security Act of 1956 (approved July 18, 1956; 70 Stat. 555) or (2) use of the Special Presidential Fund provided for in Section 401a of that act. The Embassy’s views on both possibilities were requested. (Department of State, Central Files, 756D.56/6–1357)
3. See footnote 7, Document 218.
4. The Indonesian list was given to the Embassy on an informal basis on July 23 and transmitted to the Department in despatch 42, July 25, which reported that Djuanda and Colonel Hidajat had stated that although they would prefer to purchase U.S. equipment, they were doubtful of their ability to do so without long-term credits. (Department of State, Central Files, 756D.56/7–2557)