Foreign Relations of the United States, 1951, Asia and the Pacific, Volume VI, Part 1

490.56D9/5–2551: Telegram

The Ambassador in Indonesia (Cochran) to the Secretary of State

secret
priority

Djakarta, May 25, 1951—6 p. m.

1651. Indonesian Cabinet met for four hours May 24 to consider embargo question. Indonesian Amb to US was heard. Vice President Hatta also attended.

Was recd by FonMin Subardjo 9 a. m., May 25 his request. Amb Ali was present. FonMin handed me following statement in English text:

“At its session held Djakarta 24 May, Council Ministers took under review questions associated with proposal accepted by GA of UN on 18 May.

“In connection with this govt states following as its opinion:

“Proposal accepted by GA of UN takes form of recommendation to member nations of UN which gives opportunity to each state to determine what materials, in its opinion, are of strategic nature.

“At time when discussions were going on in UN with reference to embargo, delegation of Republic of Indonesia abstained from the vote, the procedure followed by Indonesian del being in line with this country’s active and independent foreign policy which is designed bring about world peace. This same standpoint was manifested by Indonesia when she, in concert with the seven Asian and Arab States, on 3 February acted on question of branding People’s Republic of China as aggressor in Korea.¹

“The facts show that up to this moment there have been no exports from Indonesia to People’s Republic of China of vital materials.

“Govt of Indonesia, in sense indicated above, will be able to honor recommendation of UN.”

Subardjo asked what I thought of statement. I said I presumed some of his explanatory remarks were in effort to maintain Indonesian independent position and to respect UN decision with least possible internal friction. I said more forthright statement might have been more convincing in circumstances.

I asked if I was correct to base my judgment of statement on final para thereof and to interpret this to mean Indonesia intends impose embargo on shipment strategic materials to Commie China, as Subardjo had informed me orally wld be decision (see Embtel 1601).² Subardjo answered in affirmative. He said this statement represented limit Indonesia Govt thought it cld go at this time. He said Amb Ali was being informed as to Indonesian situation, particularly with respect to result of embargo on rubber, and wld return to US to take up matter of obtaining US goods needed by Indonesia.

Turning to Amb Ali I assured him Embassy and STEM Djakarta are handling most sympathetically and helpfully Indonesian requirements for imports from US. I said when particularly urgent case existed, such as need of spare parts for Convair planes that was brought to my attention by Djuanda, special steps were taken and prompt results achieved. I said Indonesian Govt cld count on us doing everything possible at this end to help justify legitimate and reasonable Indonesian requests for US products. Amb Ali said he had been assured of sympathetic US interest by SecState and Asst Secy Rusk before his departure and that he realized our problem.

I admitted loss to Indonesia thru drop in rubber price was serious, but insisted it was not calamitous and should not be overplayed. I argued against Indonesia endeavoring count upon proceeds from export sale one product quickly to finance rehabilitation national economy which had deteriorated over many years. I said rubber prices had skyrocketed as result Korean war where US bearing important share of burden in both men and materials. I referred to US efforts reach stabilizing agreements London and Rome. I cautioned against any tendency now demand from US either stabilization rubber prices or provision goods under firmer assurances and better terms than we can give our allies in arms. I said Indonesia shld be mindful of possible reaction in US to such demand lest this might increase US tendency to depend more importantly upon synthetic rubber.

I recalled to FonMin and Amb Ali material assistance US had rendered thru Exim Bank and ECA as well as part we played in obtaining reduction Indonesian debt to Netherlands by 2 billion guilders. I mentioned heavy investment American private capital in Indonesia, and new funds being brought in by Stanvac, Caltex, Goodyear and others, on our recommendation. I pictured diversity Indonesian resources for most of which US is excellent market. Ali admitted these facts but feared Communism wld grow in Indonesia if losses sustained thru drop in rubber prices and standard living consequently lowered. I expressed personal opinion such argument wld not be recd with much sympathy in US considering billions US spending in Korea to protect free nations including Indonesia from external Communist aggressors.

I said Indonesia had done almost nothing toward suppressing Communism within Indonesia since achievement sovereignty and that disorders had reached their height during past few months when greatest profits were being obtained from rubber and economic prosperity rising. I mentioned murders, kidnappings, looting, pillaging and strikes. I referred particularly to slowdowns in American owned and other plants. I pictured losses to govt in taxes, export proceeds, etc., I stressed necessity Indonesian Govt seeing their situation from all aspects and not endeavoring blame US, which has been Indonesia’s greatest benefactor, for presently threatened economic decline and Communist growth. I said Embassy, ECA and White Engineers all cooperating thoroughly and working hard in genuine effort assist Indonesia recover and maintain sound and prosperous economy. As champion of Indonesia’s cause, and personal friend both Subardjo and Ali, I felt constrained however to give them frank advice on important matter of policy now at issue.

Reverting to subject of rubber I said I assumed that, since FonMin and Amb Ali were stressing so importantly the unhappy results that wld come from UN decision and were planning to make approach to US on provision goods, Indonesia definitely intends include rubber in strategic materials to be embargoed. I intimated situation wld be serious if they did not. Subardjo said statement he had handed me indicated determination to adhere to pattern trade as existed before embargo, when no rubber was exported to Commie China.³

Subardjo asked me if Wilson of GSA was in Washington. I said I understood he was coming to Thai. I asked if Subardjo desired Wilson come Indonesia. He said contact with Wilson here and Rome had been helpful and he wld consult his technical staff to see if they thought any useful conversations cld be had here in near future. He wld let me know shortly (Deptel 1286).⁴

Cochran

1. Documentation on this resolution, approved by the United Nations General Assembly on February 1, is scheduled for publication in volume vii.
2. Not printed; see footnote 4, p. 660.
3. In telegram 1656 from Djakarta, May 26, Ambassador Cochran reported that after talking with the Foreign Minister, he had a conversation with Mr. Djuanda and asked him if the Cabinet statement on the United Nations resolution actually meant that Indonesia would embargo rubber to the People’s Republic of China. Mr. Djuanda replied that the statement had been drafted primarily for domestic consumption, but he did intimate that Indonesia would cooperate in a sincere fashion. (493.009/5–2651)
4. Not printed.