501.BC Indonesia/9–1549: Telegram
The Chargé in the Netherlands (Steere) to the Secretary of State
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793. Hicus 30. Following observations Ushic 12:1 Financial aid. Recommend second sentence Department’s paragraph be replaced by one encouraging parties work out fair and practical settlement debt question and achieve economic-financial agreement which will be mutually advantageous but without prejudice to third parties. Agreeable to telling Stikker we are studying financial problem with view determining what we can do to ease impact of transfer sovereignty, but would stress duty Netherlands to give in on workable arrangements consistent with sovereignty status. Neither Netherlands nor Indonesia should get impression US intends be sole financial underwriter Indonesia although both should be assured of our intention help.
Following for secret background as to why I stress above point and oppose resumption now ECA aid to Indonesia, Netherlands authorities continue play up non-compliance TNI with cease hostilities orders. Their accumulating evidence thereon and their refusal reveal situation in proper perspective, namely admit casualties down more than 75 percent, would tend confirm suspicion had from beginning that Netherlands Government would utilize plausible excuse to suspends or break up RTC. While such move would of course be fatal, it would, not be inconsistent with policy followed by Netherlands Government in subsidizing trip of American journalists to Indonesia and publishing-posthumous reports which at best could only belatedly justify to some extent position which Netherlands endeavored maintain but now has irretrievably lost. As long as Netherlands authorities contend military situation unsatisfactory in considerable part Indonesia, believe US would be both technically and politically wrong in resuming ECA aid considering ground on which suspended.
Indonesians oppose both resumption ECA aid while basic issuer unsolved RTC and Netherlands making important financial plans and commitments for which USI would be eventually irresponsible. They are aware Stikker particularly concerned over support his own party, including estate owners and others who would benefit from early [Page 488] rehabilitation their properties, etc. Indonesians have told me members NethDel financial committee have expressed opinion I might be responsible for impeding progress in financial and economic committee. I have had nothing to do so far with that committee except attend silently one formal meeting with other UNCI members. My opposition to ECA aid revival is of course known as is my determination to see that Indonesia gets square deal in financial and economic settlement. Indonesians have told me they thought Stikker accompanied by strong financial group to US would endeavor get agreement with US by-passing me and anticipating RTC. I gave strongest arguments I could against such possibility in Hicus 2.2 Stikker’s statement to press on arrival New York twelfth indicates emphasis which he places on international financial aid for Netherlands and Indonesia and his tendency to over-emphasize Netherlands’ share toward common effort for peaceful development Far East.
As my cables have reported, I have succeeded this week in getting Indonesians move considerably toward Netherlands position on difficult subject of hearing “significant interests” and on vital issue of union statute. I have done this since I genuinely feel Indonesian position has been unsound on significant interests and not in harmony with spirit Linggadjati and Renville on union statute or even good long-time policy on this latter subject. When financial and economic agreement comes to point of negotiation, I am convinced I shall have to press NethDel to withdraw somewhat from position set forth working paper enclosed my letter September 5 to Lacy.3 If statement should now come out from Washington that Stikker has influenced us toward supporting Netherlands position in financial negotiations RTC, this would be disastrous. In fact, hope any communiqué following Stikker’s conversations Washington will contain no reference to RTC issues.
Following on Netherlands bases: Would refer only to possible retention by Netherlands of “naval” bases in Indonesia. Inter-Indonesian conference August 2 contained recommendation that “Netherlands armed forces (KL) should be entirely withdrawn from the Republic of United Indonesia”. Since failure second police action and obvious necessity Netherlands transfer sovereignty soonest, am doubtful whether agreement would be accepted by Indonesians permitting military garrisons after certain date. Considering small number military forces that Netherlands could afford to leave in Indonesia, doubt real value thereof if any attack against Indonesia by third party. Foreign military instructors will be required. Believe we must however look to Indonesians themselves to police country, protect [Page 489] foreign interests and defend their land. Would be especially cautious any commitment our part this time favoring retention Netherlands armed forces in Indonesia considering bitterness of Republic on this subject and tendency Netherlands to exaggerate necessity for their troops remaining Indonesia and “law and order” that might be expected therefrom. Unwilling give final and definite view this subject pending progress overall negotiations, awaiting further evidence effectiveness TNI and watching Communist moves SEA.
While confident settlement acceptable both sides can be worked out RTC in two-month period, believe still likelihood NethDel balking at certain necessary concessions on ground these might upset government. Believe best chance achieving balanced settlement which Netherlands Parliament will be obliged ratify to keep government commitments and meet international opinion will result from free negotiations RTC without evidence pressure from US or elsewhere. Signed Cochran.
Sent Department 793; repeated Batavia 58.