195. Telegram From the Department of State to the Embassy in Thailand 1

1451. Embtel 1663.2

We have again reviewed reftel matter, including general consideration at all levels, and believe we must adhere to basic position stated Deptel 1439 to Bangkok,3 on which we gather you have not yet acted. In reaching this decision, we have taken full account of additional conversation with Thanom and Thanat reported in Karachi 16084 (being repeated addressees).
In view of strong affirmative urgings of Thanom and Thanat, we now believe best tactical method might be to discuss matter frankly, [Page 407]probably with Thanat, before we make any response to Achmad.5 Accordingly, you should see them and make following points fully and frankly:
We accept Achmad’s authorization to try to buy rice from Thailand, and even to seek US credit backing for so doing. However, our own contact with Indo military in Djakarta has left us with clear understanding that Nasution and Suharto do not wish anything at present time that could be identified as US aid. Accordingly, we are at present skeptical of validity Achmad’s statement that he is not worried by possibility that Sukarno would discover US involvement. Our own contacts leave us with directly contrary understanding, so that our present impression is strongly that any US role would have to be totally covert.
Any transaction on the scale of 50,000 tons, involving roughly $7 million, simply cannot be handled by USG on covert basis. We have examined this question exhaustively and believe reports to the Congress of action taken, if not an outright Presidential Determination, would be required, which in the existing state of Congressional opinion, with at least a few vocal questioners of such action, would mean that our action would almost inevitably become public at US end.
Moreover, Indonesian lack of credit is well known in rice market and any credit transaction would lead to immediate questions whether Thailand could conceivably be carrying on such operation from its own resources and to surmise in wide circles that USG was actually backing transaction. This factor alone would appear to us to remove any possibility that sizable transaction could be kept covert.
Assuming that US role would thus come to light, there is our strong judgment that exposure would be used by Sukarno and Subandrio against Army leadership as evidence US efforts interfere Indo domestic affairs. This could have serious and indeed potentially disastrous effect on Army’s current efforts to get clear upper hand in face Sukarno’s increasingly resourceful political tactics.
In addition, from policy standpoint, USG would have some doubt whether direct assistance to Army at this time might lead to weakening Army resolve to work for basic economic reforms necessary [Page 408]to create foundation on which outside assistance would have regenerative effect.
As to Thai argument that Chicoms likely to give rice to Sukarno, our own judgment is that Peiping/Djakarta relations are now at a new low and that Chicoms must be well aware that Army in fact would control disposition any rice arriving in Indonesia and would see to it that military needs met first.
Net of above is that we simply cannot see our way clear at this time to take risks, amounting we believe to certainty, of disclosure USG role, in return for doubtful benefits.
You should then discuss frankly with Thanat whether they or we should convey any message to Achmad for time being. FYI: Although they have clearly thought any transaction depended on us, our response may cause them to reflect on handling at least modest trial deal on their own. If so, we might wish to concert our response to Achmad with what Thai say. End FYI. In any case, we would not wish Thai to speak for us to Achmad other than along lines Deptel 1439, and if Thai have no other ideas we should probably get this message to Achmad ourselves after quick turnaround here.
In conveying all of above, you should of course make clear that our reluctance proceed with this proposal indicates no lack of sympathy in Indonesian problem nor unwillingness to help when we feel time is ripe and preferably when assistance would be of maximum benefit to Army. If for humanitarian as well as political reasons some injection rice and other essential consumer commodities became necessary we would be prepared consider rapid action. However, we do not believe situation has reached this critical a point as yet. In any event, we wish continue close consultation with Thai on Indonesian developments.
  1. Source: National Archives and Records Administration, RG 59, Central Files 1964–66, INCO–RICE 17 INDON–THAI. Secret; Immediate; Exdis. Drafted by William Bundy, cleared in substance with Komer, cleared by Green, Berger, and Underhill; and approved by William Bundy. Repeated to Djakarta and New Delhi.
  2. See footnote 2, Document 192.
  3. See footnote 3, Document 192.
  4. See footnote 4, Document 192.
  5. In telegram 1694 from Bangkok, February 17, Martin suggested that Dawee was the principal Thai official supporting Achmad’s efforts and Thanat had suggested U.S. support only if the transaction could be a “completely ’clean’ deal.” Since Thanat and Thanom were leaving for Australia, Martin had his frank discussion with Dawee who said he understood the U.S. decision, but regretted it. (National Archives and Records Administration, RG 59, Central Files 1964–66, INCO–RICE 17 INDON–THAI) In telegram 1701 from Bangkok, February 18, the Embassy reported that Achmad had been informed of the U.S. decision and at the same time assured of U.S. sympathy for Nasution and Suharto. Achmad regretted the decision, but stated he understood the U.S. position. (Ibid.)