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

856D.00–R/11–2351: Airgram

The Acting Secretary of State to the Embassy in Indonesia

confidential

Washington, November 23, 1951.

A–110. Joint State, Defense and ECA. Interested agencies concur in handling new criteria for eligibility for United States aid and other provisions of Mutual Security Act¹ (MSA) through exchange of notes. Draft note which comes at end of this airgram has been prepared for submission Indonesian Government on basis appropriate discussions between you and Indonesian officials.

Prompt action this note urgent due provisions MSA (Section 531) that no military economic or technical assistance may be furnished any country which shall not have agreed to Section 511 assurances within 90 days, i.e. by January 8, 1952. Failure of Indonesia to provide necessary assurances will jeopardize continuation of current assistance programs under Economic Cooperation Agreement and under agreement on military assistance in form of constabulary equipment.

It is clear from the legislative history of the section and from the use of the words “has agreed” in that section that the requirement laid down therein can be fulfilled without receiving a restatement of intent to fulfill the commitments in Section 511 if it can be found that in existing agreements the particular country has already accepted the commitments contained in the section. However, it has been concluded that the Executive Branch will respond to the Congressionally imposed requirement in the most direct fashion by requesting all countries receiving aid to subscribe to these undertakings in the words of the section. To try to spell out of the United Nations Charter, the North Atlantic Treaty, and other documents the commitments laid, down in Section 511 would involve a semantic exercise of some proportions, at the end of which there would be danger that the Congress would remain unpersuaded as well as somewhat annoyed. For it is not at all apparent to those who inserted this section into the statute why any nation should have any difficulty subscribing to these commitments. It is felt that any nation which received aid from the United States ought to be willing, without hesitation, to embrace these general political commitments which seem, at least on their face, to involve nothing more than an agreement to do what in good conscience any recipient of aid ought to agree to.

Paragraph No. 1 this note is based on language of Section 511 (a) in order to continue present constabulary and economic programs after January 8. Funds for the FY 50 constabulary program were not completely expended at end FY 51. This unexpended balance has been consolidated with the funds authorized by the Act (see Section 301 of MSA). As a result Section 511 (a) assurances must be obtained from Indonesian Government if these funds are to be drawn upon after January 8. These assurances would also be necessary to enable the United States Government to act favorably on military supplies for Indonesians mentioned by Subardjo to Secretary September 14 (Department’s telegram No. 330, September 15, 1951)² and by Ali to Rusk November 16 (Department’s telegram No. 2963, November 16, 1951 to Paris,³ assuming Subardjo and Ali meant grant assistance. (You will note that the preamble to Section 511a specifically exempts reimbursable aid under Section 408 (e) of MDAA of 1949 as amended⁴ from 511a assurances.) In event Indonesia prepared to place constabulary assistance and other military supplies which may be requested on a 408 (e) reimbursable basis after January 8, 1952, assurances based on Section 511 (b) of MSA would be adequate.

In proposing presentation paragraph 1 of draft note the United States assuming Indonesian Government may be prepared to accept language 511 (a) in order to continue military and economic assistance programs on grant basis. Most serious difficulty foreseen by Department to Indonesia’s acceptance of paragraph 1 consists of point three and the word “military” in point six. With particular reference to point three Indonesian Government may feel that it has not assumed any “military obligations” under other agreements or treaties “to which the United States is a party”. Mere membership in the United Nations is not considered the assumption of a military obligation. On the other hand, membership in the Inter-American Treaty for Reciprocal Assistance, the North Atlantic Treaty, and bilateral defense treaties with the United States are deemed to involve “military obligations” as that phrase is used in this section. Therefore, although point three desirable in interest of removing all possible basis for questioning Indonesia’s compliance with Section 511, it is not directly applicable to Indonesia in absence of “military obligations” in the sense in which these words are used. If in your opinion it would not be in the interest of the United States to include point three in paragraph 1 of draft note, this point may be dropped from the note. Similarly if word “military” likely to cause difficulty for Indonesian Government words “economic and military” may be dropped from point six.

If Indonesian Government unable to agree accept paragraph No. 1 as it appears in draft note below or as modified above and if Indonesian Government prepared to place the constabulary program on a reimbursable basis, then Indonesian agreement to following alternative paragraph 1 based on Section 511 (b) of MSA should be obtained.

“The Government of the Republic of Indonesia re-affirms that along with the Government of the United States of America it is firmly committed to join in promoting international understanding and good will and in maintaining world peace and to take such action as may be mutually agreed upon to eliminate causes of international tension.”

Indonesian agreement to this provision is a prerequisite to the continuation of economic assistance in absence of Indonesia’s acceptance of paragraph 1 of draft note based on section 511 (a).

Paragraph No. 2 of draft note based on Section 524 of MSA which requires the President to make appropriate arrangements with recipient countries for the return of equipment or material no longer needed for the purposes for which originally made available. Such procedures have already been proposed to a number of countries. It is considered desirable to insert this general undertaking in all the agreements with countries receiving assistance under the Mutual Defense Assistance Act.

Paragraph No. 3 of draft note based upon Section 515 of MSA and follows language that section. You may point out this section enacted out of concern by Congress for situation in which funds intended for Greece were attached in Belgium during past year. It is recognized that in certain situations attachments possible on United States foreign aid funds wherever assistance program operates. Problem becomes generally significant only in those cases where advances of funds are made prior to actual delivery of goods and services. Provision would have no effect where the country obtains the commodity or service involved with its own resources and the United States has reimbursed such country on receipt of documentation showing that commodity or service has actually been purchased and delivered or where the United States makes available commodities or services and payments are made directly by the United States to suppliers. In any cases where the attachment provision will require action to be taken, the Indonesian Government can be assured that the United States will cooperate in helping to work out arrangements for compliance that will not be unduly burdensome.

Inclusion paragraph No. 4 considered desirable due need fully regularize economic aid arrangement. If impossible obtain that assurance by January 8 deadline the Embassy is authorized substitute the following language. “The Government of Indonesia considers the aforementioned Economic Cooperation Agreement fully effective”. If even this impossible obtain by January 8, you may omit paragraph 4 entirely from present exchange notes provided Indonesian Government will notify the United States re either ratification or lack of necessity for ratification very shortly after beginning calendar year 1952. Ninety day limit re Section 511 undertakings clearly implies Congressional intent to have bilaterals fully concluded and effective within corresponding period.

Final paragraph. Local conditions may require some modifications in the form of the closing paragraph. These will be considered by Department so long as a legally binding agreement is achieved. In view January 8 deadline urgency prompt action on conversations and exchange of notes again stressed. Progress on negotiations should be reported. Draft text of note follows:

“Excellency: I have the honor to refer to the conversations which have recently taken place between representatives of our Governments relating to the effect of the enactment by the Congress of the United States of the Mutual Security Act of 1951 (P.L. 165–82nd Congress) upon furnishing assistance under the Economic Cooperation Agreement signed on October 16, 1950 and the agreement for military assistance in the form of constabulary equipment signed on August 15, 1950 between the Government of the United States and the Government of the Republic of Indonesia. I also have the honor to confirm the understandings reached as a result of these conversations, as follows:

1. The Government of Indonesia hereby confirms that it has agreed to

(1) join in promoting international understanding and good will, and maintaining world peace;

(2) take such action as may be mutually agreed upon to eliminate causes of international tension;

(3) fulfill the military obligations which it has assumed under multilateral or bilateral agreements or treaties to which the United States is a party;

(4) make, consistent with its political and economic stability, the full contribution permitted by its manpower, resources, facilities, and general economic condition to the development and maintenance of its own defensive strength and the defensive strength of the free world;

(5) take all reasonable measures which may be needed to develop its defense capacities; and

(6) take appropriate steps to insure the effective utilization of the economic and military assistance provided by the United States.

2. The two Governments will establish procedures under which equipment and materials furnished by the Government of the United States under the Mutual Defense Assistance Act of 1949, as amended, other than equipment or materials furnished under terms requiring reimbursement, and no longer required for the purposes for which originally made available will be offered for return to the Government which furnished such assistance for appropriate disposition.

3. The two Governments will establish procedures whereby the Government of Indonesia will so deposit, segregate, or assure title to all funds allocated to or derived from any program of assistance undertaken by the Government of the United States so that such funds shall not be subject to garnishment, attachment, seizure or other legal process by any person, firm, agency, corporation, organization or government, when in the opinion of the Government of the United States any such legal process would interfere with the attainment of the objectives of the said program of assistance.

4. The Government of Indonesia has fulfilled all necessary legal requirements in connection with the bringing into effect of the aforementioned Economic Cooperation Agreement.

Upon receipt of a Note from your Government indicating that the foregoing provisions are acceptable to the Government of Indonesia, the Government of the United States of America will consider that this Note and your reply thereto constitute an agreement between the two governments on this subject which shall enter into force on the date of your Note in reply.”

Foregoing note, if acceptable, would cover all changes necessitated by MSA. While Act also extended use guaranties (Section 520) this will be subject separate approach.

Copies of this airgram are being sent to Djakarta.

Webb

1. Approved October 10, 1951; 65 Stat. 373.
2. Not printed.
3. In telegram 2963 to Paris, November 16, Ambassador Cochran was informed that Ambassador Sastroamidjojo had called on Assistant Secretary Rusk that day stating that his government would be appreciative if the United States would make a decision in principle on extending military aid to Indonesia. The Assistant Secretary replied that in view of the heavy demands of the American military and due to the needs of friendly powers for available supplies, it would be impractical to attempt to achieve such a policy decision in principle. He also added that the same factors would make it very difficult for the United States to advance a guarantee for any specific supplies, but he did assure the Ambassador that Indonesia would receive sympathetic consideration subject to the above limitations and to the provisions of the new Mutual Security Act. (601.56D11/11–1651)
4. Approved July 26, 1950; 64 Stat. 373.