321. Editorial Note
At a meeting of the National Security Council on December 12, Allen Dulles commented on developments in Indonesia as follows:
“Mr. Dulles indicated that the anti-Dutch campaign in Indonesia was continuing unabated. In his first speech in a long time, President Sukarno had indicated no compromise with the Dutch. The Communist-dominated labor union, SOBSI, has continued to take over Dutch enterprises, which course of action was given an air of legality by the government appointing Indonesian officials to supervise these enterprises. In any case, the bulk of the great Dutch investment in Java was now in Indonesian hands.
“The President inquired whether there would be any compensation to the Dutch, or whether the Indonesian action amounted to straight confiscation. Mr. Dulles replied that there was no clear answer as yet. The Indonesians say they will provide compensation, but it is extremely doubtful. Meanwhile, Mr. Dulles pointed out, the anti-Dutch campaign was having extremely serious repercussions in Indonesia. The price of rice had been trebled in recent weeks. Moreover, the Soviet bloc was exploiting the situation by offering the Indonesians ships, technicians, etc., to replace the Dutch. There were also unconfirmed reports that the authorities in Sumatra would soon declare their independence of Djakarta. There was also pretty good evidence that the Indonesian military commander in Central Sumatra had forbidden the oil companies henceforth to pay their revenues to the Central Government in Djakarta.” (Memorandum of discussion by Gleason, December 6; Eisenhower Library, Whitman File, NSC Records)