Foreign Relations of the United States, 1958–1960, Indonesia, Volume XVII

14. Memorandum of Conversation⁰

Washington, February 7, 1958.

SUBJECT

• Dutch-Indonesian Relations

PARTICIPANTS

• Ambassador J. H. van Roijen, Ambassador of the Netherlands
• Baron S. G. M. van Voorst, Netherlands Embassy
• Mr. D. Ketel, Netherlands Embassy
• The Secretary
• EUR—Mr. Elbrick
• L—Mr. Becker

Ambassador van Roijen began the conversation with the statement that Indonesian actions against Dutch interests in Indonesia had created an economic vacuum in that country. The Dutch Government was very anxious that the vacuum not be filled by Communist bloc countries. The Dutch Government felt that it was its duty to take the initiative with friendly Governments to work out ways by which this could be avoided. The Ambassador said he hoped the present conversation would be followed by others in which there might be a full and frank exchange of views on various aspects of developments in Indonesia. His Government considered that such an exchange of views should concern not only developments in Indonesia but also the policies which the two Governments intended to follow in that area.

The Dutch Government took the position, he said, that should conditions in Indonesia develop in a direction which might justify assistance from Western countries, such assistance should be conditioned on the willingness of the Indonesian Government to reach an agreement with the Dutch Government concerning the confiscation of Dutch interests in Indonesia and Indonesia’s failure to meet its financial obligations to the Netherlands. As examples of what his Government had in mind, he cited U.S. policy toward Iran in 1952 and the blocking of Egyptian accounts after the nationalization of the Suez Canal in 1956. He asked for U.S. cooperation with any Dutch efforts to obtain compensation for damages which it had sustained in Indonesia.

The Ambassador then referred to the possibility that private firms might wish to take over certain Dutch interests in Indonesia. In order that these firms should avoid complications resulting from Dutch claims for damages he said that the Dutch considered that the foreign firms should work out with the Dutch firms a mutually agreed basis for any take-over operation. The Ambassador then handed the Secretary an Aide-Mémoire, copy attached, which covered the points he had made. He also gave the Secretary a copy, in translation, of the Dutch note to the Indonesian Government, dated December 30, 1957, protesting Indonesian actions against Dutch interests. (Copy attached).¹

The Ambassador explained that a similar approach had already been made to the British Foreign Minister who had received it sympathetically. He added that approaches along the same line were being made in Brussels, Paris and Bonn and that his Government also intended to talk to the Japanese Government in this general sense.

The Secretary commented that the Dutch Government was faced with many problems arising out of developments in Indonesia and said that the Department would be prepared to exchange views informally with the Dutch Government on this general subject. He then added that he wished to comment on one point which the Ambassador had made. He said that U.S. action in blocking Egyptian assets in 1956 had not been undertaken as a form of reprisal. He explained that this action had been designed to protect our shipping companies from double jeopardy.

The Secretary then said that there seems to him to be at least a superficial inconsistency between the Dutch position that non-Communist countries and enterprises from these countries should fill the vacuum in Indonesia and the statement putting everyone on notice that unless acceptable compensation arrangements were worked out with the Dutch there would be interminable legal complications. van Roijen said that in his opinion the apparent inconsistency could be removed if the problem was considered in terms of the situation which the United States faced in Iran in 1952. van Roijen added that his Government did not wish to appear unreasonable. The Dutch did not expect to be compensated for the entirety of the losses they had suffered in Indonesia. As another example of the fact that the Dutch were taking a reasonable attitude, he mentioned their position on the furnishing of arms and equipment to Indonesia. He said that the European Allies of the Dutch had been informed that the Dutch Government was not opposed to the shipment of all military equipment to Indonesia but that it did not wish to see military equipment supplied Indonesia which could be used against West New Guinea. The Secretary asked what was the Dutch attitude toward the providing of military equipment which might be used against Sumatra. The Ambassador replied that he believed that his Government would also oppose the shipment of such equipment to Indonesia at the present time, adding, However, that his Government would wish in this connection to avoid giving the appearance of interfering in internal Indonesian affairs.

At this point, Ambassador van Roijen said that he was confident that Hatta, if he should ever become the head of the Indonesia Government, would be in favor of establishing at least the principle of adequate compensation. The Secretary commented that Hatta appeared to him to have lost some of his sound Moslem virtues and suggested that his trip to China might have contributed to his present attitude. van Roijen indicated that he continued to have confidence in Hatta but said that Hatta’s deteriorating physical condition might have resulted in making him a less efficient leader.

van Roijen then returned to his Government’s request for a continuing full and frank discussion of Indonesian problems and developments. The Secretary again acquiesced, commenting that, as he understood it, the Dutch Government had in mind an informal exchange of views. He pointed out the Indonesian actions against Dutch interests were setting an unfortunate precedent and referred to the position which the Afro-Asian Conference in Cairo had taken towards private investment.

Prior to leaving, it was agreed that the Ambassador if he was questioned by the press would say that he had had a discussion of Dutch interests in Indonesia and the effect of Indonesian actions on these interests.²

0. Source: Department of State, Central Files, 656.56D/2–758. Confidential. Drafted by Turner C. Cameron, Officer in Charge of Swiss-Benelux Affairs, Office of Western European Affairs. C. Burke Elbrick briefed Dulles for this conversation in a February 6 memorandum. (Ibid., 656.56D13/2–658)
1. Neither printed. See Supplement.
2. The Department transmitted a summary of this memorandum of conversation to the Embassy in the Netherlands in telegram 1449 to The Hague, February 7. (Department of State, Central Files, 856D.19/2–358)