194. Telegram From the Embassy in the Philippines to the Department of State0

2. From Dillon.1 Following summary talks Djakarta:

Nasution discussed role of army in present Indonesian scene in general terms along lines familiar Department. Only new elements were that, although constituent assembly can fill office vice president, not expected office be filled for two or three years and that army expected have increased representation new government to be formed July with Chief of Staff position possibly raised above cabinet rank. Nasution stressed need for political stability and solving country’s economic problems as important to security and attainment of military objectives. He said that Darul Islam more difficult problem for army than PRRI.2

In meeting with Subandrio and five of his cabinet colleagues, Fon Minister referred improvement US-Indonesian relations, reviewed political and economic problems of newly independent countries especially as being faced by Indonesia and renewed plea for US understanding. He said government giving highest priority to security and that government wishes settle rebellion, for it not only source of friction, but also threat to very existence of state. Finance Minister said government in need of loans and is now negotiating with several US banks for short-term line of credit for importing raw materials and hoped reach agreement possibly by end April.

I took occasion to raise with him as I had earlier with Nasution, security problem on rubber estates. Also mentioned question of internal price oil production and Stanvac needs for additional concessions.

Meetings with Djuanda and Sukarno being reported separately.3
  1. Source: Department of State, Central Files, 756D.00/4–1359. Secret. Also sent to Djakarta.
  2. Dillon arrived in Baguio on April 13 for the annual meeting of the Far Eastern Chiefs of Mission. Prior to this meeting Dillon made a 2-day visit to Indonesia, April 12–13, and before that he was in Wellington as the U.S. representative to the fifth SEATO Council of Ministers Meeting, April 8–10. During his stay in Indonesia Dillon met with President Sukarno, Prime Minister Djuanda, Army Chief of Staff Nasution, and Foreign Minister Subandrio; see Document 195. Briefing papers prepared for Dillon’s visit to Indonesia are in Department of State, Conference Files: Lot 64 D 560, CF 1263.
  3. Telegram 3111 from Djakarta, April 13, reported more fully on Dillon’s meeting with Nasution. (Ibid.) See Supplement.
  4. See Documents 195 and 196.