Foreign Relations of the United States, 1955–1957, Southeast Asia, Volume XXII

175. Telegram From the Embassy in Indonesia to the Department of State¹

Djakarta, August 22, 1956—8 p.m.

538. Reference: Department telegram 282, repeated information The Hague 330, London 1164.² Saw Prime Minister (acting Foreign Minister) this morning and carried out instructions paragraphs 2, 3 and 4 reference telegram.³ In so doing used very much same language reported my telegram 506⁴ but stated I was acting under instructions and added point contained paragraph 3 reference telegram. Ali said decision to repudiate was unanimously approved by government parties, including conservative Masjumi, NU, Catholic and Protestant parties as well as PNI, which he said some people might consider leftist party although this not entirely true since Semarang meeting. He said he could understand although not agree with reactions of persons abroad who unfamiliar with whole unhappy history of Indonesia-Dutch relations. Said no one could be sorrier than he that Dutch obstinacy and narrow outlook on world had prevented growth of a Dutch-Indonesian relationship similar to those between British on one hand and Indians, Pakistanis, Burmese and Ceylonese on other hand or between US and Philippines. Wished Dutch interests in Indonesia which understood that present temper Indonesians toward Dutch were outgrowth Dutch errors since 1945 not to mention prewar colonial policy could exercise some influence over Dutch thinking at home. Ali emphasized that US and other third country interests in Indonesia had nothing to worry about and this would be brought out in note (referred to in my telegram 506) still under preparation and which he hoped would be ready for delivery next week. I said that I appreciated his repeated assurances that third country interests would not be affected but said that this did not remove the fact that Indonesian action had been of a type and under circumstances that could give rise to concern abroad that repudiation Dutch debts might be forerunner of further extremist action. Prime Minister said he could understand this concern but repeated government in hands of moderate parties above mentioned all of whom united in attitude towards Dutch but equally united in basically friendly feelings towards US and determination to carry out undertakings leave non-Dutch interests untouched if for no other reason than uphold Indonesia’s reputation and credit standing abroad. Ali again stressed that US interests in Indonesia especially oil, “had nothing to fear”.

Cumming

1. Source: Department of State, Central Files, 856D.10/8–2256. Secret. Repeated to The Hague and London.
2. Telegram 282 to Djakarta, August 20, instructed Cumming to approach the Acting Foreign Minister, inform him of U.S. concern that Indonesia’s repudiation of its debt to the Netherlands might cause adverse consequences in the United States, and reiterate his prior counsel of moderation in approaching Netherlands-Indonesian problems. (Ibid., 856D.10/8–2056)
3. Paragraph 4 is summarized in footnote 2 above. Paragraph 2 reported that the Department had received a number of inquiries from U.S. business and press circles concerning the Indonesian action. Paragraph 3 stated that U.S. business and press interest, as well as the Dutch reaction, might have a bearing on the discussion of economic aid to Indonesia.
4. Document 173.