856D.2553/12–651: Telegram
The Acting Secretary of State to the Embassy in Indonesia
597. Ernst, asst to Board Chairman Caltex, called on Lacy yesterday to discuss Indo Govt attitude on revision its “let alone” fon exchange control agreements with oil cos. Though Caltex Agreement does not expire until Jan 1, 1953, Ernst stated his co very disturbed by reports from Stanvac, NY, on its negots related to expiration latter’s agreement Dec 31 this year. Ernst said he understood Stanvac negotiators departing NY had been given Dec 15 “arrival deadline” by Kuypers. Ernst attributed to Kuypers preponderant responsibility for Indo Govt’s actions contrary to oil cos interests, and had intended send special Caltex negotiator to “go over Kuypers head” to higher level Indo officials.
Lacy informed Ernst that Amer Amb has returned Djakarta, is closely fol developments affecting oil cos, and is in touch with high level Indo officials on this matter. Lacy added recent report from Emb (urtel 798 Dec 3)1 indicate Indos in negotiating frame of mind. It was pointed out Butterworth of Caltex is now in Indo and that it wld probably be advisable Caltex refrain from sending special mission to Djakarta this time, in order avoid appearance of “US oil cos ganging up” on Indos. Ernst stated he was reassured to learn Amb Cochran has returned Djakarta, and that Indo Govt appears to be acting reasonably. He will communicate with Butterworth before recommending Caltex send any special mission.
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