493.009/6–2551: Telegram
The Ambassador in Indonesia (Cochran) to the Secretary of State
priority
1819. Received by Darma Setiawan 8 p. m. 24th. I gave him orally message contained Deptel 1407. I suggested I shld deliver same message formally to FonMin Subardjo soonest. Darma phoned Subardjo who agreed receive me 9 a. m. 25th. Darma let me know he had arranged for Hatta to see Subardjo on embargo question when Hatta visited FonOff on tour inspection morning 23rd. Darma said special Cabinet meeting might be called for 25th to discuss inclusion rubber embargo list.
Received by Subardjo 9 o’clock today. I gave him plainly and firmly message contained Deptel 1407. I told him was my duty as govt representative well as friend Indo to urge Indo decision in favor unconditional embargo on rubber. I pointed out applicability Kem legislation and vulnerability Indo at this time when part of Exim Bank projects in course ratification by Indo Parliament and balance yet to be considered by Exim Bank.
Subardjo told me that after he arranged last night for our interview this morning he got in touch with PriMin. Meeting was then held later in night attended by Sukiman, Subardjo, Djuanda and officials Min Economics. Subardjo said they calculated Indo losing 150 million dollars thru drop rubber price caused by UN embargo. He said they hoped US cld come to their relief through making counterpart funds available for utilization by Indo and through 50 million dollar loan to pay for rolling stock, telephone equipment textiles et cetera.
I said it was entirely unreasonable to endeavor assess US for alleged loss 150 million dollars attributed to UN embargo. I said I had never heard any estimate volunteered by Indos as to how much they had profited from rising prices of tin rubber and other products as result war effort US putting forth within UN to protect Indo and other free nations in path Commie aggressor. Subardjo then emphasized difficult internal polit situation and objection on part press and parliamentarians to Indo subscribing to embargo on rubber. I responded that Min Fon Affairs itself had been initially and directly responsible for stirring up official and public opinion against embargo and against US role in UN in this connection.
I said US wld not bargain with Indo in endeavor get this country meet its honorable obligations under UN of which it member and to which it owes its sovereignty so importantly. I said we wld not endeavor compensate Indo dollar for dollar for losses which they attempting attribute to action on part US. I said Indo shld accept rubber embargo unconditionally without any counter undertaking requested from US.
[Page 682]I did say McCune and I on behalf ECA and Dept State would be sympathetically receptive to projects to be submitted by Indo Govt for utilization counterpart funds for purposes which govt thinks most helpful and required by present situation particularly in light decreased revenues due drop in certain commodity prices. I said initiative shld come soonest from Indo Govt. I reminded Subardjo that McCune and I cannot take decisions here but wld pass projects promptly to Wash for further consideration and final action. I urged Subardjo get responsible officials Indo Govt busy on projects soonest for use counterpart funds.
I positively refused recommend any additional loan for 50 million dollars. I said Indos had not been able absorb ECA aid in 1951 as rapidly as anticipated. Furthermore Exim Bank projects for 52 million dols not yet ratified. Subardjo said meeting with Parliament (Embtel 1817)1 had been planned for this morning but now cancelled since 7 Cabinet members meeting urgently on strikes in vital industries. He said Exim Bank ratification wld come up Wednesday.
I volunteered get Exim Bank experts out here shortly after ratification and after Indos take decision in favor UN formula on rubber. I said these could review projects they already approved and cld examine on spot proposals for utilization balance 48 million dols. I said experiences of Indo past few months and particularly tight budgetary position might cause Indos revise their projects. Exim Bank experts might suggest some revisions in view impossibility procuring certain short items from US. I particularly urged Indos get advice from White engineers who have now had opportunity make general survey ports, railways and certain industries for which Exim Bank items intended. I said these engineers wld probably recommend for instance that no more rolling stock be brought in but that now on hand be placed in condition. Furthermore, I thought they wld not recommend additional complicated machine tools in view large quantity on hand and until mechanics better trained for proper utilization thereof. I said so long as large balance Exim Bank loan unexpended there wld be no sense in recommending further. I said Exim Bank always sympathetic when it sees loans it makes are cleanly, constructively and properly utilized and re-payment thereon assured.
Darma Setiawan came in toward end conversation. To be sure of witness I repeated almost verbatim above statements which I had made on counterpart and loan possibilities. I was informed no special Cabinet meeting today but embargo question wld come up at regular meeting Tuesday.2
[Page 683]Received by Hatta 11 o’clock today. I reviewed entire embargo situation with him including my visit with Subardjo. Hatta said understood Sukiman govt feared put rubber on embargo list now because likelihood strong leftist internal reaction. I stressed responsibility Sukiman govt itself for stirring up resentment to UN resolution and particularly to role US govt. I pointed out Sukiman govt had recently won overwhelming vote confidence and shld be sufficiently strong now to stand test of strength with leftist opposition. I said if Sukiman govt not willing risk this test to honor its obligation under UN resolution it wld be difficult if not impossible for US to extend further aid to Indo in face Kem legislation. I said it wld certainly not be possible for me to recommend further assistance.
Hatta said Indo Govt argued that placing rubber exports on embargo list really not necessary and wld have no significance since Indo rubber exports have gone to Malaya for remilling and distribution in this area and responsibility shld be on Malaya to prevent further shipments to China. I said this argument not valid in face fact Chinese Commies have approached Indo with respect barter rice for rubber and Sukiman govt has actually given consideration to such scheme. Hatta said he had not heard of this and did not believe it feasible because of lack of shipping, shortage rice in China, etc. I said responsible Indo Govt officials had told me of project and had given it serious consideration. I said I was convinced these same officials wld be willing export rubber directly to Commie Chi if this fomid feasible and if not prevented by UN embargo.
Hatta promised speak with Sukiman govt in favor decision for unconditional embargo. He said he would try attend tomorrow’s Cabinet meeting.3