856D.50/5–1747: Telegram
The Consul General at Batavia (Foote) to the Secretary of State
183. In re following report please refer my telegram 128, April 14; 137, April 18; 138, April 19; 141, April 22; 146, April 25; and 152, April 28.79
Joint Dutch-Indo Economic Committee were near agreement and Gani came to me personally to give data contained in above references. When Dutch agreed virtually to every Indo proposal, Gani went Djocja to submit matter to Indo cabinet. When he returned it appeared every proposal rejected by Djocja or made contingent upon acceptance other proposals which unacceptable to Dutch.
NEI Director Economic Affairs and committee then had meeting with Gani and advisers at which Dutch asked if Indos willing cooperate formation joint board for distribution food within areas of coming USI if they willing cooperate formation regulations govern [Page 927] imports, exports and financial matters in NEI and if willing cooperate implementing article 14 Linggadjati. Gani’s replies all in negative and said in Java, Sumatra and Madura this business Repub and not Dutch. Re implementation article 14 Gani said foreign and other owners must apply direct to Repub and obey such rules as Repub may prescribe re wages taxation, working conditions, and not to Dutch.
Matter then brought to meeting Beel, Jonkman and advisers and Van Mook advisers and Department heads. Some severe criticism of Van Mook by Beel and Jonkman and two of Van Mook’s closest advisers, Van Hoogstraten and Idenburg, said present policy leading nowhere and should be changed. Van Mook then called in representative entrepreneurs and said there might be change of policy but decision thereon would be made after Beel and Jonkman return Hague and submit reports on fact find[ing] visit.
American, British, and Dutch businessmen agree problem will never be solved as now proceeding because when Dutch agree one point Indos reject it and demand two more. No doubt Indos stalling for time hoping Dutch be refused loan USA and become helpless financially.
Communists growing stronger and while formerly quiet are becoming bolder. Bothani [Both Gani?] and Masjoemi appear taking sides against Soekarno, Sjahrir, Sjarifoeddin and others for seeking Communist support and their representatives visited Van Mook and said they not opposed Linggadjati but rather action Communists supporting it and to growth Communism in all branches Republic Govt (long despatch on growth and tendencies communism being typed). In meantime Van Mook receiving increasing number pleas from Indos in Republic areas take military action to relieve them from terrorism of Communists and irregulars.
If Indos refuse cooperate re article 14 and Dutch fail enforce Linggadjati by military action, Department may be assured foreign industrial interests including USA will be lost either to Communism or their return greatly delayed. Whatever happens present situation cannot continue much longer.
- None printed except No. 137, April 18 (p. 918).↩