84. Memorandum From the Assistant Secretary of State for Far Eastern Affairs (Robertson) to the Under Secretary of State (Hoover)1

SUBJECT

  • Release of Section 1212 funds for the FY 1955 program in Indonesia

A. Problem:

The Defense Department’s refusal to approve a piecemeal release of Section 121 ($700 million) funds for the Indonesian FY 1955 program is holding up its implementation. The delay in announcing the desired program figure of $7 million threatens to undermine progress in U.S.-Indonesian cooperation in technical assistance achieved during FY 1954 and to create political difficulties for the U.S. in Indonesia. The present allocation is $3.7 million.

B. Discussion:

1.
The additional funds requested ($3.3 million) are for the following reasons:
a.
Technical assistance projects started in previous fiscal years; regarded by our Mission as sound and strongly desired by the various Indonesian Ministries concerned (see list Tab A3).
b.
A malaria eradication program calling for $1.3 million. Expansion of the malaria program is of importance for the following reasons: (1) the previous program concentrated principally on technical assistance and limited demonstration through providing DDT and spraying equipment for selected areas; (2) FOA experts agree with the Mission that continuation of this limited operation risks increasing immunity to DDT and requires a more concentrated approach over a wider area of operation; and (3) the program has had some dramatic effects in certain areas. Public Health experts agree if the anti-malaria project is dropped now a resurgence of the disease will follow. This would provide a ready target for unfriendly elements in Indonesia.
2.
Implementation of the FY 1955 program is being held up pending a decision on the additional $3.3 million. The Embassy has reported that Indonesian newspapers continue to press the Government and Mission for information about the size of the aid program. In addition, Tousfo 609 (Tab B)4 reports an editorial in Pedoman (an opposition [Page 134] paper) strongly endorsing the FOA program. It is the first expression of its kind appearing in the Indonesian press since 1952.
3.
Embtel 11175 reports that the Foreign Minister, in a conversation with Ambassador Cumming, referred to the possibility of increased U.S. aid as an indication of our sympathetic understanding of Indonesian problems (Tab C).
4.
In his most recent cable Embtel 1161, dated January 19,6 the Ambassador indicates that we should proceed with the modest increase in technical assistance as scheduled.

C. Recommendation:

It is our understanding that Mr. Struve Hensel (Defense) has indicated a willingness to sign the appropriate documents for the release of additional funds if the Department recommends immediate action for political reasons. We believe the reasons discussed above justify immediate action and would appreciate your authorizing Mr. Nolting to state this as a State Department position to Governor Stassen and Mr. Hensel.7

  1. Source: Department of State, Central Files, 756D.5–MSP/1–2555. Confidential.
  2. Section 121 of the Mutual Security Act of 1954 (approved August 26, 1954; 68 Stat. 832) provided up to $700 million for Southeast Asia.
  3. Not printed.
  4. Dated January 13, not printed.
  5. Telegram 1117 from Djakarta, January 12, reported a conversation between Cumming and Sunario during which the latter referred to a press report of possible increased U.S. aid as a sign of U.S. sympathetic understanding of Indonesian problems, but Cumming indicated that no decision had yet been reached. (Department of State, Central Files, 856D.00/1–1255)
  6. Document 80.
  7. The source text bears the handwritten note: “Concur. Hoover”.