8. Summary Record of the 521st National Security Council Meeting1

INDONESIA

Director McCone gave a briefing on current developments in Southeast Asia, with special attention to the situation in Indonesia.

Secretary Rusk opened the discussion as to whether the President should determine that U.S. economic and military assistance to Indonesia is in the U.S. national interest. In an amendment to the Foreign Assistance Act, Congress required the President to make such a determination (see attached State Department paper).2

Secretary Rusk said it was not a good time for the President to sign a determination because of the situation existing in the area, i.e., Sukarno actively seeking to “confront” Malaysia by training and using guerrilla forces on islands now controlled by Malaysia. However, Secretary Rusk continued, the President cannot delay indefinitely taking the action required by the Congressional amendment. The Foreign Assistance Act was signed December 18 and Congress will expect Presidential action on the determination shortly. Sukarno is coming up to the watershed where he will have to decide either

(a)
to pull back from his “confrontation.” We have no confidence that he will do so, but it would be possible for him to retreat via a decision to carry on his confrontation policy in an Asian context, i.e., not frontal opposition to the British as sponsors of Malaysia, or;
(b)
to go ahead with his present policy. If he chooses the latter course, he might resort to open aggression against Malaysia. In such an event, our obligations under the Anzus Pact would be involved.

If we oppose Sukarno by cutting off all U.S. aid, he might react by confiscating extensive U.S. investments in Indonesia. In the case of a showdown, he might ask help from China and even Russia.

Secretary Rusk said Philippine President Macapagal will be talking to Sukarno in Manila this week. If he so chooses, he might be able to persuade Sukarno to hold back. Therefore, we should take no action today or this week which could have the effect of pushing Sukarno [Page 17]into all-out aggression against Indonesia. If the law requires action, a temporary determination should be signed. Timing is an important part of the problem. We want to keep the U.S. in a position to influence Sukarno, but we must keep our good relations with Congress and not allow Congressmen to think we are disregarding the legal requirement they imposed upon us when the Foreign Assistance Act was amended. A determination restricting the scope of the assistance and limited in time would be one way to deal with the present situation.

AID Director Bell said a decision would be required within a few days. After citing the law, which was signed December 18, he said a determination must be made in a reasonable time.

Secretary McNamara recommended that the President sign the determination today and instruct all agencies to monitor closely the assistance now in the pipeline which would continue to be sent to Indonesia. He said he understood it was agreed that we would hold up aid amounting to approximately $140 million. In the pipeline, there is $50 million of aid, plus an additional $25 million which is to be put into the pipeline. We should try to hold down this $70 million of assistance but we should avoid the consequences to us of action terminating all aid immediately.

In response to the President’s request for his views, Speaker McCormack said he had no confidence in Sihanouk. [Sukarno?] He recalled an address which Sihanouk made several years ago to a Joint Session of Congress as being the most supercilious speech ever made by a foreigner to the Congress. We must have supreme regard for our friends, i.e., the British, who have primary responsibility in the Malaysian situation. He admitted that the decision was a very close one, but he could not disagree with the reasoning contained in the State Department paper.

Secretary Rusk said no one in Washington disagreed with the Speaker’s description of the unsavory character of Sukarno who is the least responsible leader of any modern State. He said allied solidarity in this situation is very important. He noted that neither the British nor the Australians are ready to break relations with Sukarno. Australia is continuing its aid to Indonesia in an effort to influence Sukarno to give up his confrontation with Malaysia. Our allies are agreed that the time has not yet come to break with Sukarno and conclude the situation is hopeless.

In response to the President’s request, the Attorney General said that as long as the Indonesians are carrying on an active guerrilla campaign against Malaysia, any announcement that the U.S. was continuing aid to Indonesia would be a big boost to Sukarno. It would be interpreted as action in support of Sukarno despite Sukarno’s present unacceptable behavior. If we must act, we should do so in such a way as to make clear that our action is not a vote of confidence in Sukarno. [Page 18]The effect in the U.S. of continuing aid to Indonesia without a change in Sukarno’s policy would result in confusing domestic opinion.

Secretary Rusk said that Ambassador Jones has already told Sukarno that the U.S. will provide no more aid unless the Indonesians turn away from the policy of confrontation. Jones has also said that if Indonesia is blamed as an aggressor, our obligations under the Anzus Treaty will come into play. He said he agreed with the Attorney General on the U.S. domestic reaction if we continue to give aid to Indonesia. However, it would be bad to act now before the situation is ripe. The stakes are very high. More is involved in Indonesia, with its 100 million people, than is at stake in Viet Nam. We will know much more about the situation and be in a better position to decide what to do in two weeks.

The Attorney General asked whether it was absolutely necessary for the President to make a determination now.

Director Bell said it was so far as approving any new obligations. A determination cannot be put off much longer even if the assistance we continue to give involves no new obligations.

The Attorney General asked whether we could continue as we were now doing for two more weeks.

Director Bell said that we could with some difficulty. He suggested that the determination be phrased in such a way as to permit the continuance of aid for a limited period of time. At the end of that period, a new determination could be made or aid could be halted.

Mr. McGeorge Bundy said that Congress would be asking very soon what the President was going to do about aid to Indonesia. In addition, there would be press inquiries. At stake were the Administration’s relations with Congress. In response to the President’s question, Mr. Bundy said he would recommend signing the determination but sending to Djakarta a tough man who would tell Sukarno that the President did not intend to continue assistance unless Sukarno halted the confrontation effort. He suggested the Attorney General as a Presidential emissary noting that the Attorney General had a reservoir of good will which was built up during a visit to Indonesia.

The Attorney General demurred and said he did not look forward to a trip to Indonesia.

Director McCone noted that in his view cessation of U.S. aid would not induce Sukarno to give up his effort to destroy Malaysia. He thought that a cutoff of aid would have very serious consequences for us, but would not alter Sukarno’s opposition to Malaysia. Possibly there may be a solution in Sukarno’s meeting with Macapagal in Manila. We should not write off the possibility of something coming out of Manila by making a decision now, even though further delay will probably cause criticism in the U.S. He recalled that in his meeting with Macapagal [Page 19]recently, he urged the Philippine President to meet with Sukarno. He agreed that a Presidential emissary should be sent to Sukarno but this should be done in such a way as not to impair the relationship which Ambassador Jones now has with Sukarno. He recommended that if action is necessary, a determination for a limited period of time should be signed.

In response to the President’s request, Mr. Harriman recommended that a limited determination be signed, i.e., limited in scope. He believed that if a determination limited as to time were signed, then every thirty days we would have to go through the exercise all over again. He believed we should get the decision behind us now to avoid the issue coming up in Congress every time a fixed period ended. He predicted that some months would pass before we know exactly where we are in Indonesia. He favored continuing a limited program for keeping a foot in the door. If the Indonesians turn against us and seize U.S. investments, the Chinese Communists might get the U.S. oil companies, thereby altering the strategic balance in the area.

Secretary Rusk said the question was whether we decide to stay at the table and play a little longer rather than leave the table now.

Mr. Harriman noted that if Sukarno steps up his guerrilla warfare against Malaysia, we can charge him in the UN with aggression. Other political pressures are available to us.

Secretary Dillon said that the picture was indeed dark, but the U.S. should not force the issue now because this is the wrong time to act. We should continue the smallest amount of aid possible. This aid would serve as a protection to the U.S. investments in Indonesia. The determination should not be friendly and should make clear that our assistance was being continued for the time being, but not for a fixed period.

Secretary Rusk noted that if a determination were signed, this would not mean that at a later time we could not cut off aid if, for example, Sukarno was charged by the UN with aggression.

Mr. Sorensen asked whether the U.S. was giving aid to Malaysia.

Director Bell replied that no U.S. aid was now being given to Malaysia. The British are giving assistance. We decided that we did not have to start a program in Malaysia which, for an underdeveloped country, is comparatively well off.

General LeMay, as acting Chairman of the Joint Chiefs of Staff, favored the State-proposed program. He believed the U.S. should keep its foot in the door. He recommended that a decision be held off until after the Manila conference.

The President asked Secretary Rusk whether a decision had to be made now. He suggested that we could describe the current situation [Page 20]to the Congressional leaders, telling them that no new aid was being provided, that aid in the pipeline would continue, and that the determination that this aid was in the national interest would be a temporary determination. We should inform Sukarno and Macapagal of our position and following the Manila meeting, and in the light of circumstances then existing, we could decide what to do.

Secretary Rusk agreed that it would be useful for us to take a reading following the Manila meeting. He said the problem had been brought to the President because the Department was aware of Congressional pressure on the President to make a decision. He agreed that we could inform the appropriate Congressional committees that we are holding off making a decision.

The President said we should talk to the appropriate Congressional committees, explaining our hope that a solution to the immediate problem caused by Sukarno’s confrontation policy would be found. We should consider sending a Presidential emissary to talk to Sukarno and we should tell the British and the Australians what we are doing. As soon as we are able to take a new reading, and if the Congressional committees’ reaction is satisfactory, we would be in a position to decide. Both the Secretary of State and the Secretary of Defense should talk to the Congressional committees in an effort to find out what they think. He said it would be a mistake to decide to cut off aid before we knew the outcome of the Manila conference. But, on the other hand, it was very difficult to say that aid to Indonesia under present circumstances is in the national interest.

Secretary McNamara thought we could avoid a determination for some weeks. He suggested that the Attorney General ask one of his lawyers to decide whether a Presidential determination is required now. If there is a difference among the lawyers, as appears to be the case, the Attorney General could decide which lawyer had the best case.

The President asked the Attorney General to take on this task. He said he did not want to be in the position of acting with lack of faith toward Congress.3

Bromley Smith 4
  1. Source: Johnson Library, National Security File, National Security Council Meetings, Vol. 1, Tab 2, 1/7/64, Assistance to Indonesia. Secret. Hilsman also took notes at this meeting. (National Archives and Records Administration, RG 59, Cabinet Files: Lot 68 D 350, CP–40, Cabinet Meetings, January 1964) Colby prepared a memorandum of this meeting on January 8. (Central Intelligence Agency, DCI (McCone) Files: Job 80–B01285A, Meetings with the President, 1 Jan. to 30 Apr. 1964)
  2. Apparent reference to Document 7.
  3. The decisions taken at this meeting were included in NSC Action No. 2474, January 7. According to that record of action, Robert Kennedy was directed to prepare “an opinion of law” on whether a Presidential Determination was required for obligations incurred prior to the passage of the 1963 Foreign Assistance Act; the President directed Rusk, McNamara, and Bell to consult with appropriate members of Congress about the determination and U.S. relations with Indonesia; and directed Rusk to consider sending a personal representative to Sukarno. (Johnson Library, National Security File, National Security Council Meetings, Vol. 1, Tab 2, 1/7/64, Assistance to Indonesia)
  4. Printed from a copy that bears this typed signature.