Foreign Relations of the United States, 1961–1963, Volume XXIII, Southeast Asia

337. Memorandum of Conversation⁰

Washington, October 2, 1963, 10–10:30 a.m.

SUBJECT

1.

Malaysia and Indonesia

2.

ANZUS Treaty

3.

Australian Defense Budget

PARTICIPANTS

• The President
• Mr. Harold Holt, Australian Treasurer
• Sir Howard Beale, Australian Ambassador
• Mr. Roger Hilsman, Assistant Secretary of State for Far Eastern Affairs

After an exchange of courtesies, the discussion turned to Malaysia and Indonesia. Mr. Holt mentioned Prime Minister Menzies’ guarantee to Malaysia, characterizing it as the strongest guarantee that Australia had ever issued.¹

In response to a question from the President, Ambassador Beale described the guarantee as unconditional and pointed out that it referred to subversion as well as overt aggression. He volunteered the view that we must be “firm with Sukarno.”

Mr. Holt interjected that whatever we do about Indonesia we must do together. The Indonesians have been behaving like juvenile delinquents, although they could turn on the famous Malay charm with individual visitors. But in spite of the delinquency there were 100 million Indonesians and we must somehow live with their existence. They could, of course, be a great asset. To accomplish this he felt US firmness was needed.

The President said that we have attempted to retain some influence with Sukarno through our aid and so on—although there might come a time when our policy might have to change. However, we have one guerrilla war on our hands and did not relish the prospect of another. Recently we have worked with the Philippines to help keep Sukarno in line or at least to isolate the Indonesians in their opposition to Malaysia.

The Ambassador noted that Barwick had detected an ominous note in his recent meetings with Sukarno and Nasution.

The President asked about the status of our discussions on ANZUS. Was there disagreement between us as to the meaning of the treaty or was it clear?

The Ambassador stated that the Harriman statement on the occasion of his visit to Australia covered the matter.²

Mr. Hilsman pointed out that, although we had agreed that the ANZUS treaty covered an attack on Australian forces in the treaty area, the discussion between the President and the Prime Minister had, first, specifically excluded guerrilla warfare and subversion and, second, established the need for consultations on specific circumstances in which the treaty might be applicable.

The President posed the following question: “If under the Australian agreement with Malaysia Australia moved troops into North Borneo who were then attacked by Indonesian guerrilla units, would the United States automatically be engaged?”

[2 paragraphs (5 lines of source text) not declassified]

Mr. Holt said that his understanding was that the United States would not be obligated in the case of subversion, but, if the Australian troops in North Borneo became massively engaged, then the United States would have to come in.

The President asked Mr. Hilsman why the consultations to clarify the circumstances under which the United States would be obligated that he had requested at the time of Mr. Menzies’ visit had not taken place.³

Mr. Hilsman replied that, immediately following Mr. Menzies’ visit, we had requested consultations with the Australians. Later we had sent another message, but had still received no answer.

The Ambassador said that the Foreign Minister was coming for a visit and he could drop in and chat with Dean (Rusk).

(Later Mr. Hilsman, referring to this point, suggested that the broad outlines had already been established in the conversations between Menzies and the President; what was needed now was not a chat between the two Foreign Ministers but detailed joint staff studies of various specific contingencies.)

Mr. Holt said that the Australians had been stimulated to take this course of a strong public commitment to Malaysia as a result of Mr. Harriman’s statement on his visit. Mr. Harriman had made it quite clear that the United States was with Australia and this had stiffened the Australians up. He wished to stress that this was a historic announcement and that the Australians were not given to making declarations of this nature. The statement had been largely influenced by Mr. Harriman’s position.

The President asked what it was that Mr. Harriman said that had “largely influenced” Australia in this direction. Mr. Holt said that it was his statement about the ANZUS treaty and his view that it was up to the Australians to take up some responsibilities in Southeast Asia.

The President said that there was probably no disagreement between the two countries but he wanted to be sure that they understood each other and that the Australians wouldn’t turn around some day and say “where is the United States?” He was willing to go along, but he wanted to know where we were going.

Mr. Holt said that it was in the United States interest to see some stability in the area.

The President reiterated his desire for consultations on specific circumstances and contingencies in which the treaty would be applicable. He said that it was possible that Sukarno would push his confrontation policy to a dangerous point. He felt, however, that we must be clear where we are going and at what point we will get into a war. He agreed that the ultimate deterrent to Sukarno was probably the United States, but, if the United States got into a war over the Borneo Territories, it would take some explaining.

The Ambassador said that in his opinion the only thing that would work would be to make it plain to Sukarno that he would have to reckon with United States power as well as UK and Australian power.

The President said that the United States had not said anything like that. We have been working on an entirely different track and with considerable success—bringing Sukarno along to an oil agreement, to a stabilization program and recently, to a standstill of provocative statements and actions. We have not said “if you do so and so the result will be war with the United States.” Right now something like that would not, in our opinion, be helpful. He felt that we have done the right thing with Sukarno through persuasion. The suggestion of cutting off aid was implicit, he supposed, but he did not think an overt threat to cut aid would be helpful.

Mr. Holt asked if it was our opinion that the Soviets would supply aid if the United States withdrew theirs, adding that in his opinion the Soviets did not have the resources to do so.

The President said that we could play that card only once, for cutting aid would also cut off our influence.

The Ambassador asked if Congress would permit the Executive to continue aiding Indonesia, to which the President replied that it would be a mistake if they didn’t.

The President then asked about the Australian defense budget.

Mr. Holt replied to the effect that they felt their efforts to build roads, railroads and airfields in a country of continental size which had only 11 million people was a contribution to joint defenses; that the Defense Minister feels that the Australians are moving as fast as training, etc., will permit.

The meeting ended with Mr. Holt describing his conversations with Secretary Dillon. As the party took their leave the President repeated that he did not want the Australians to think that the United States was not with them, but he did want some idea of the direction we were going and what specific commitments the Australians understood we had made.⁴

0. Source: Department of State, Central Files, POL INDON-MALAYSIA. Secret. Drafted by Hilsman and approved by the White House on October 14. The time of the meeting is taken from the President’s Appointment Book. (Kennedy Library)
1. On September 25, Prime Minister Sir Robert Menzies told the Australian Federal House of Representatives that Australia would give military assistance to defend Malaysia in the event of any armed invasion or of subversive activity supported, directed, or inspired from outside Malaysia.
2. See Documents 338 and 340.
3. Prime Minister Menzies and President Kennedy had met on July 8. During their discussion, Menzies asked for clarification of U.S. support of the ANZUS Treaty. Menzies stated that Australia was contemplating a commitment to Malaysia, but hesitated to do so unless he was sure that “the United States would back them if they got into trouble.” Menzies specifically asked if Australian troops stationed in North Borneo were attacked, would the ANZUS Treaty take effect? Kennedy “agreed that the Australians should know the exact commitment under the ANZUS Treaty and that Sukarno and others should also know it. The President directed Mr. Hilsman to look into the question as to whether an attack on Australian forces stationed in the treaty area would invoke the ANZUS Treaty. If it turned out that the ANZUS Treaty did apply in such circumstances, Mr. Hilsman should discuss with the Australians means of consultation between Australia and the United States in advance of Australian forces being stationed in such places which would invoke the ANZUS Treaty if they were attacked.” (Memorandum of conversation, July 8; Department of State, Central Files, DEF 18–3)
4. In a memorandum for the President, August 8, Acting Secretary Ball suggested that under ANZUS the United States was only committed to consult and to act in the event of an attack on a treaty member’s forces in the Pacific. “Act” covered a broad range of measures from diplomatic support to the use of troops. The Department of State did not want to give Australia a “blank check” for support of their troops anywhere in the Pacific. (Department of State, Central Files, DEF 4 ANZUS)