102. Telegram From the Department of State to the Embassy in Indonesia^Source

Washington, May 17, 1958, 2:03 p.m.

3335. Pass CINCPAC for POLAD. Embtels 4230,¹ 4235,² 4254.³ You should inform Djuanda that we will explore with Philippine and GRC governments Indonesian Government’s allegations that their nationals are assisting and their territory is being used in support of rebels which those governments have repeatedly denied. You should point out however that as in case US, Philippine and GRC Governments may have difficulty in controlling actions their nationals abroad. You should also reiterate that the situation in Indonesia is inevitably of deep concern to peoples of free world who are in close proximity to Indonesia and that no one could realistically expect that Indonesia should be moved into Sino-Soviet orbit with the total good will and acquiescence of all the neighboring peoples who would be greatly endangered thereby. Indonesian Government should therefore realistically recognize it as a fact that there cannot but be at least a minimum of reaction on the part of all those, Indonesians and neighbors of Indonesia, who see in rising Communist influence the prospect of alien domination, and that the best way to avoid assistance by few people in surrounding areas who may be assisting rebels is for Indonesian Government to eliminate reasons for their action by taking steps against internal Communist threat. (Deptel 3301)⁴

With specific reference to several points raised in your messages:

• 1. You should make points in Deptel 3301 to Sukarno at early opportune moment unless you perceive objection.
• 2. Statement by Secretary at press conference still under consideration. Whether Secretary makes statement may well depend on developments next few days.
• 3. Regarding approach to rebels with suggestion they seek settlement conflict there would appear be no reason why an approach by them would be likely to succeed in view of adamant position taken by government that it will not negotiate with rebels. If you have reason believe government’s attitude would be different we will be glad reconsider.
• 4. You should express to Djuanda and Army appreciation for action taken in canceling “anti-intervention rally” scheduled for yesterday.
• 5. We will explore question of military mission (Embtel 4154)⁵ in light developments in Indonesia.
• 6. In line suggestion your tel 4254 that we show our approval for recent action taken by Army and Government we are:
  • a) granting license requests which have been pending for several months;
  • b) proceeding with action on Sumatra highway construction and diesel electrical projects, and;
  • c) issuing instructions to you for implementation Japanese yen loan.
• 7. We are not making any announcement regarding these steps. Issuance licenses will of course become immediately known to Indonesians but we leave to you how and when Djuanda, Subandrio and Nasution should be informed of yen loan. Until you receive further instructions from us which we will attempt get out soon as possible you should not discuss with Indonesians highway and diesel projects. Indonesians may not be aware however that these projects have been held up for other than technical reasons. You may wish also reiterate items paragraph 4 of Deptel 3300.⁶

Dulles