AMEMBASSY DJAKARTA 929

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP65B00383R000100260063-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 3
• Document Creation Date: December 16, 2016
• Document Release Date: October 25, 2004
• Sequence Number: 63
• Publication Date: April 12, 1963
• Content Type: TELEGRAM

Approved FQ*.Release 2004/12/15: CIA-RDtP641300383FZ0001 9963-6~ 9 4 5 7
`OUTGOING TELEGRAM Department or state
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Origin ACTION: Amembassy DJAKARTA 929
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Heated tone of Congressmen's statements and discontinuity of discussion
explain mistaken reporting on Clay testimony regar - ng donesia . If disturbing
stories appear in Indonesian press you authorized show to appropriate persons
following transcript of what actually said in exchanges between Congressmen
Hays and Broomfield, and Clay. Times, Post, and Herald Tribune reports on
hearings make no mention Indonesia.
BEGIN VERBATIM
Mr. Hays. I know that we are under some inhibitions about discussing
this country by country in this session but your report did mention Indonesia.
This has been one of my pet peeves for a long time. I have pointed out before
in these hearings and I will say it again at the risk of being repetitious, that
you have Indonesia, which is one of the most naturally rich countries in the
world, I am speaking of natural resources, which is practically bankrupt due,
I believe, to inadequate management on the part of the rulers of the country and
a downright "don't care" attitude on their part, contrasted with Malaya which
will soon be - which has much less natural resources but which has been able
Drafted by,
`E:RV'Barnett:eve 4/12/63
Clearances,
Telegraphic transmission and
classification approved byr
Robert W. Barnett
Clay Cmte-Mr.Dentzer SPA-Mr. Bell
REPRODUCTION FROM THIS
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to provide in much less time more opportunity for its people. You have mentioned in
your report that unless Indonesia puts its house in orde m6kought to be cut off. I
take it you mean at the end of our present commitments?
General Clay, Yes, sir. We looked at Indonesia very carefully. It is a nation
of tremendous resources. It is a large nation. In its geographic position we would like
very much to see it a strong and Independent nation. On the other hand it is heavily in
debt, a large part of the debt is to the Soviet Government, about half of it is on hard
terms and is due for repayment now. For us to go In with loans in such a period just
doesn't seem to us to make very much sense, We do believe that the training program
in which we are involved In Indonesia particulary with the military and the so-called
civic type of military program in which we are providing some engineering equipment
So that their troops can do constructive work should be continued, that they have made
friends for us among the officers of the Indonesian army and among other people in
Indonesia. But until Indonesia has been able to work out a reasonable repayment of its
loan to Russia, until we can be assured that it is going to place its financial house in
order, we do not believe that we should go into extensive economic aid to Indonesia and
ve so stated.
Mr. Broomfield. Do you personally feel that in some of these areas that you
are obviously critic, of in your report, and I was pleased to read the comment on
Indonesia, and I join with Congressman Hays in feeling the very same way, that we
ought to cut off immediately our aid to that country, do you feel that there are areas
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that we have been supporting that in view of their past experience it might be better to
eliminate as soon as possible because of our commitments, and if Russia, the
Communist nations are so anxious to take over, let them do it and back away from
sole of these areas?
General Clay. I wouldn?t like to say that by areas. I would be very happy at an
executive session to talk about that country by country, yes, sir. END VERBATIM.
SCP - EXEMPT. End.
RUSK
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