856d.00/9–1649: Telegram
The Chargé in the Netherlands (Steere) to the Secretary of State
801. Embassy takes somewhat different view than Cochran in Hicus 30 (Embtel 793, September 15, 12 noon) re Netherlands attitudes and intentions. We do not believe that “Netherlands Government would utilize plausible excuse to suspend or break up RTC.” Dutch contacts of Embassy, including officials, politicians and businessmen, generally consider breakdown of RTC would lead inevitably to chaos Indonesia, withdrawal Dutch forces and nationals and loss of most if not all investments. Common expression is “conference must succeed.”
Actually Dutch Government (and informed people generally) feel Netherlands is in extremely difficult position vis-à-vis Indonesians, has few cards can play, and that position will deteriorate if progress is not made in negotiations. Dutch attitude, we believe, entirely defensive one, motivated by desire to salvage as much as possible Dutch investment Indonesia and regain Dutch standing internationally. These considerations certainly behind journalists’ trip.
Dutch concern about military (particularly guerrilla) situation is, we believe from our contacts, based fundamentally on belief or fear that Indonesian Government after regaining sovereignty will be unable to maintain order essential to implement economic and financial agreements it may accept in RTC. Dutch therefore probably emphasizing unsatisfactory features military situation in effort secure best possible agreement on provisions for withdrawal military forces. We do not believe Dutch here have any illusions about effectiveness of military pressure on Republican authorities, and at best hope formula can be found for RIS to use Dutch forces help maintain order while building up own strength. If this impossible, Dutch will have retired. There is strong underlying sentiment in Holland get troops home; replacement unit recently sailed for Indonesia with 132 desertions.
As for resumption ECA aid, Embassy agrees entirely present time unpropitious. However, we are surprised that Cochran should apparently feel that he will have to exert great pressure “to see that Indonesians get square deal” in financial and economic settlement. We have [Page 493] felt Indonesians are in driver’s seat this matter and that great persuasion probably would be necessary insure Indonesian agreement to economic financial terms which are both fair to Dutch and of character to induce continued ready availability of foreign capital and technical skills to Indonesia. We doubt whether Dutch in event treatment they consider unfair are going to send good money after bad and continue in large numbers to devote their undoubtedly great talents and experience to Indonesian development. We believe, therefore, that it in interests of both parties and of wider US interests in that area that economic and financial arrangements arrived at RTC are generally held to be fair and reasonable to both sides.