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

190. Telegram From the Department of State to the Embassy in Indonesia¹

Washington, October 31, 1956—7:47 p.m.

699. Your 1020.² Before undertaking discussions with Indonesians on $25 million aid program necessary obtain executive branch determination authorizing us seek $10 million of that amount from Congress in FY 58 MSP program. This determination now in process and should be cleared within 10 or 15 days. Until we have obtained this determination we cannot therefore authorize you discuss with Indonesians line of credit totaling $25 million.

If however in view local developments you feel it necessary discuss with Indonesians $15 million line of credit for FY 57 prior receipt executive branch determination on other $10 million you may proceed do so. This amount would be over and above funds for technical cooperation and malaria and police. US prepared negotiate mutually agreed projects for financing with additional development assistance funds on loan basis repayable in dollars or local currency at option Indonesians. Indicate US desires proceed on project by project basis and actual commitments and obligations of $15 million or fraction thereof depends upon type projects mutually agreed upon.

In discussions with Indonesians trust you will be able avoid issuance any statements by them which might have adverse effect Dutch public opinion such as made by Indonesians at conclusion PL 480 agreement. Request therefore you inform Department when you propose begin discussions with Indonesians.

In effort minimize adverse effects on U.S.-Netherlands relations, you should seek government cooperation in avoiding public statements and in limiting for present publicity given to extension larger program. Our experience with other countries indicates that long time lag between announcement of aid program actions and their implementation frequently occurs and our belief that interests both governments best served if public announcement made after negotiations are complete. No formal announcement re increase aid planned here at this time.

Dulles

1. Source: Department of State, Central Files, 756D.5–MSP/10–2756. Secret; Priority. Drafted in SPA on October 11; cleared with FE, EUR, OFD, U/MSA, and ICA; and approved by Murphy.
2. See footnote 3, Document 188.