220. Memorandum From William J. Jorden of the National Security Council Staff to President Johnson 1

SUBJECT

  • Presidential Determination on Aid to Indonesia2

Secretary Rusk recommends3 that you sign the attached Presidential Determination under Section 620 (j) of the Foreign Assistance Act. The Bureau of the Budget (Acting Director Hughes) concurs4 as does AID Director Gaud.

The Determination will permit State to begin talks with the Indonesians on an interim assistance program. As discussed at the recent NSC meeting on Indonesia,5 our hope is that long-range assistance can be worked out on a multilateral basis.

Ambassador Green hopes we can tell the Indonesians that we are ready to move ahead on short-term emergency aid for the Indo economy before Foreign Minister Malik leaves for Moscow on September 2.

Items that might be considered for action under this Determination are: (1) PL 480 food and cotton; (2) spare parts and replacements for U.S. equipment now in Indonesia; (3) participant training; (4) technical assistance, including advice, textbooks and training aids; (5) possible inclusion of Indonesia in regional development programs; (6) modest scale resumption of civic action training of the military.

State and AID estimate that such interim programs, excluding PL 480, might cost somewhere between $12 million and $22 million. There is no commitment on any of the above; the list is only illustrative.

Congressional leaders have been kept informed of Indonesian developments. The specific question of immediate, short-term aid resumption has not been posed.

[Page 469]

State and AID wonder whether you prefer:

1)
to proceed with PD as is;
2)
to sign PD but withhold announcement until key Congressional leaders and Committee chairmen can be informed;
3)
to get a reading from key Congressmen before proceeding.

The Indonesian economy is in shambles. The new government desperately needs short-term help. It would be to our great advantage to move quickly on some of these modest but psychologically important programs before a mood of desperation sets in Djakarta. It would help greatly to be able to tell the Indonesians of our willingness to begin talking about some of these matters before Malik takes off for Moscow.

I would therefore recommend course 2 above.6

Bill Jorden
  1. Source: Johnson Library, National Security File, Country File, Indonesia, Vol. VII, 5/66–6/67, [2 of 2]. Secret. Rostow “OK”ed and initialed this memorandum on August 28.
  2. The Presidential Determination was attached to Rusk’s memorandum (see footnote 3 below) and is also in the Johnson Library, National Security File, Country File, Indonesia, Vol. VII, 5/66–6/67, [2 of 2].
  3. Rusk’s recommendation was in an August 23 memorandum to Johnson. (National Archives and Records Administration, RG 59, Central Files 1964–66, DEF 19–8 INDON)
  4. Philip S. Hughes concurred in an August 25 memorandum to Johnson. (Johnson Library, National Security File, Files of Walt W. Rostow, Meetings with the President, Apr.–Dec. 1966)
  5. See Document 217.
  6. There is no indication on the memorandum as to Johnson’s preference, but after consultation with key Congressional leaders, as described in a memorandum of conversation by Douglas MacArthur II, August 30, and a September 1 memorandum from Rusk to Johnson (both National Archives and Records Administration, RG 59, Central Files 1964–66, POL 19–8 US–INDON), the President approved and signed the Determination. (Memorandum from Rostow to Johnson; August 31; Johnson Library, National Security File, Country File, Indonesia, Vol. VII, 5/66–6/67, [2 of 2]. The signed Determination, September 1, is ibid.