1518. Manila for MLG, also pass 13th AF.
Department pass CINCPAC for POLAD. Prime Minister Djuanda saw me this morning in company
with Foreign Minister Subandrio for about one hour. Following are points made
with specific relation to present anti-Dutch activities. During this
discussion I mainly played role of listener.
1. There will be no immediate mass expulsion of Dutch from Indonesia.
Djuanda and Subandrio recognize necessity of
keeping economy of country going and necessity of retaining many Dutch
experts. However it is firm government policy to speed up replacement of
Dutch by Indonesians and to break stranglehold of Dutch on Indonesian
economy. Djuanda pointed out that previous
agreement with BPM, for example, called for two-thirds staff to be Dutch
and one-third other nationalities including Indonesian. This would be
reversed with Indonesians having two-thirds staff.
2. Take over of KPM banks and Dutch
estates (this just announced this morning) by government is for purpose
of conserving them, keeping communications open and containing [continuing?] production. There has been no
confiscation or nationalization. Earnings have been frozen but this is
question open to negotiation at proper time.
3. Strict orders have been given and will be enforced, that human and
property rights of individual Dutchmen, as well as all foreigners, must
be respected. Djuanda said there
had been agitation for closing of all Dutch schools but he had ruled
against it, as he said Dutch children had nothing to do with dispute
between the two governments and as long as they were in Indonesia they
should have right to go to school. He admitted with regret that excesses
had been committed but expressed belief that worst was over and that
matters are now under control. (This remains to be seen.)
4. Press stories of Dutch warships in Indonesian waters most disturbing.
This only added fuel to fire, did no good, and makes it increasingly
difficult for moderates in government to exercise influence.
5. Public statements by Dutch Ambassador van
Roijen in Washington personally attacking President
Sukarno most unhelpful
and in Indonesian opinion, with which I agree, comes close to violating
6. Still not too late for overall negotiations to take place which could
reverse present trend. However, time was running out and if something
not done soon, extremists would carry the day. Indonesia could not be
expected to take initiative as she had already done so too many times.
Forcible outside intervention would do more harm than good. Appeal by
friendly power to both Netherlands and Indonesians to come together and
talk might be effective. Djuanda
referred to his known record for moderation but said he was convinced
his government could not do otherwise than it was. He recognized that if
negotiations did not take place and Indonesians went ahead with their
present program considerable suffering would ensue. He recalled in this
connection that in 1945 and in subsequent Dutch police actions,
Indonesians, relatively speaking, were armed with spears against cannon
and yet had won out. If necessary, in the economic field, they were
prepared to go through a similar phase and in the long run he was
confident of success.
Comment: These were two worried but determined
men. They hope to keep things under control but have no intention of
reversing the trend unless some
indication that Dutch will talk. They definitely would welcome US
intervention, addressed to both sides, but if this not forthcoming they
are prepared keep ahead and, if need be, go down with the ship.
1Source: Department of State,
Central Files, 656.56D/12–1057. Confidential. Repeated to Canberra,
The Hague, and Manila.