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

164. Telegram From the Department of State to the Embassy in Indonesia⁰

Washington, November 19, 1958, 11:32 a.m.

943. Follow summary major points Robertson–Subandrio conversation Nov 18.¹

1) Robertson informed Minister we have approved program additional military assistance which will include items not only for Army but also for Navy and Air Force. Stated until we obtain Presidential determination under Section 451 MSA which we requesting, we cannot make commitment to GOI nor discuss details and added we hope instruct Ambassador Jones shortly advise GOI of this program.

2) Robertson also advised Subandrio we approve in principle GOI request for additional PL–480 program but matter must be considered by Inter-departmental Committee. Stated we do not know magnitude of program but possible it may not be for as much as GOI has requested because among other reasons insufficient quantity surplus rice available at present time. Advised details of program will be discussed with GOI after final approval by interested agencies.

3) Re other economic assistance, Robertson told Minister we have instructed Ambassador Jones explore with GOI possible use DLF funds for financing GOI purchase KPM ships. Re Ex-Im Bank Robertson stated all applications under active consideration and we hope be able act on them soon. Noted contract with STANVAC for natural gas not yet signed by GOI and such contract necessary before application re fertilizer plant can be approved.

4) Robertson impressed upon Subandrio that there should be no publicity concerning these programs either here or in Djakarta until everything had been settled. He reiterated we would instruct Ambassador Jones give GOI all details as soon as we in position discuss them. Minister stated he was “pleasantly surprised” over these prospects though he understood no commitments made. He stated satisfactory atmosphere created and this would make his task easier not only in Indonesia but in his discussions with other governments as he attempts implement Indo foreign policy and he “really grateful” for this prospect.

5) When queried on Blitz story re possible GOI nationalization American oil companies in Indonesia,² Subandrio replied he had not made any such statement, had seen no newspapermen in India and would see that denial was issued.

6) Robertson stated there was considerable concern here over implications Sukarno’s Ambon speech that if Indonesia does not get West Irian it will not make any settlement for nationalized Dutch properties.³ Minister replied it important consider need meet psychological atmosphere in Indonesia, implying some of such statements made primarily for domestic consumption. Subandrio continued it unfortunate use GOI attitude toward Dutch as indicative GOI attitude toward private capital, stated that Indonesia has always paid its foreign obligations and asked that we be understanding of problem, adding he confident satisfactory solution would be worked out as soon as dust settles, perhaps within next 6 months.

7) Remainder of conversation devoted to discussion SEATO, neutralism, Soviet Union, Communist China and Communism. Subandrio remarked that in Indonesia they realized now more than ever before danger of communist subversion. Minister added Indonesians wish settle problems themselves and not be accused of blindly following U.S. but that with necessary tools from U.S. he confident GOI could meet the problem. Text memo conversation being pouched.

Herter

0. Source: Department of State, Central Files, 756D.5–MSP/11–1958. Secret; Priority. Drafted by Wenzel and approved by Robertson. Repeated to The Hague, Canberra, and CINCPAC for POLAD.
1. Subandrio stopped in Washington on November 18 on his return from the Colombo Plan meeting in Seattle. A 5-page memorandum of Robertson’s conversation with Subandrio, drafted by Mein, is ibid., 756D.00/11–1858. See Supplement.
2. The Indian newspaper Blitz quoted Subandrio as saying while in India, en route to the United States, that “the Indonesian Government was seriously contemplating the plan of nationalization of foreign-owned oil companies which are taking a huge bite of the foreign exchange earnings of the country.” (Briefing memorandum from Mein to Robertson, November 17; Department of State, Central Files, 756D.13/11–1758) See Supplement.
3. Jones reported on this speech in telegram 1614 from Djakarta, November 13. (Department of State, Central Files, 756D.11/11–1358)