Joseph B. Kennedy and the Jet Speed Air Cushion Rail System

In the NDC’s last blog entry, readers discovered from the records of the United States Embassy Djakarta, how an embassy goes about its mission to protect American citizens living in a foreign country during times of trouble.  This entry will look at a different mission, one that tried to protect America’s overseas interests from….Americans.

Meet Joseph B. Kennedy

This story unfolds in the embassy’s 1967 files beginning with Djakarta’s Airgram A-404 dated March 3, 1967 from Ambassador Marshall Green and addressed to the Department of State.  Mr. Kennedy was introduced as president of International Sales and Services Unlimited Enterprises Ltd. (ISSUE).  ISSUE’s wide-ranging portfolio involved potential projects in exploitation and marketing of asphalt on Buton Island, exploitation of sulphur deposits on Java, food processing (a proposed process to create artificial rice from rice bran, sago, corn cobs, banana peel, and flour with other ingredients), marketing of rubber and other products of over 100 small estates in West Java, production of milk powder, fishing, forestry and road construction in Sulawesi, irrigation and flood control projects, and, finally, tourist facilities.  While ISSUE held no specific contracts for any of these projects, the company had understandings with the Indonesian government that ISSUE would have the first opportunity to initiate these projects.  A curious Ambassador queried the Department in A-404 whether the enterprise had the financial wherewithal to pull off any of the listed projects and whether the artificial rice process was viable.

The Department’s answer arrived more than a month later in its Airgram CA-8118 dated April 20.  In that response, the Department advised the Embassy that ISSUE was not an incorporated company in the state of California as had been stated.   Further investigation revealed that ISSUE did not have the financial resources required for any projects and that Kennedy’s background was in psychology–specifically in the field of marriage counseling.  The Airgram confirmed that ISSUE was involved in four Indonesian projects: an asphalt plant on Buton Island; the completion of the partly constructed 28-story Wisma Nusantara Building; an unspecified light industry project; and the P.T. Isma Company, a joint venture that would produce, process, and can beef, fruit, etc.  The Department also confirmed that the artificial rice concept was feasible and being done with other products.  The Department also requested that the Embassy would like to be kept informed as to the progress of ISSUE’s various ventures.

That there was trouble afoot with ISSUE became apparent in a letter dated April 20 from Francis Underhill, the Country Director for Indonesian Affairs back at Main State in Washington DC to the Embassy’s  Counselor for Economic Affairs, Paul McCusker.  Associates of Mr. Kennedy, Dr. Wayne Mann, the inventor of a high speed cushion rail transportation concept, and a Dr. Morris approached Underhill to discuss ISSUE’s financial difficulties.  The two visitors explained that ISSUE’s financial backers did not live up to their commitments, leaving ISSUE’s  Indonesian projects at risk of failing.  Mann and Morris claimed that Indonesia leader General Suharto approved the ISSUE projects, and with their failure, Suharto’s reputation would be in jeopardy.  Could the United States government help ISSUE financially? Underhill evidently had a busy day with the ISSUE representatives who did not understand that the US Government did not make investments with private companies for overseas adventures.  Underhill goes on to describe the situation as an international “Guys and Dolls” theatrical production with dire consequences for U.S. businesses wishing to work with the Indonesian government in the future if ISSUE’s poor project management were to be seen as an example of American business savvy.

As the summer of 1967 unfolded,  Joseph Kennedy shifted his Indonesian efforts to a new entity known as the Indonesian Development Company (IDC).  Key to Kennedy’s plans was the addition of a better-known associate, former California governor Edmund Brown, fresh off his defeat in the 1966 California gubernatorial election by Ronald Reagan .  Initially Kennedy claimed that he retained Governor Brown’s law firm as legal representation for ISSUE.  Djakarta’s Telegram 3087 of June 30, 1967 requested that the Department “…discreetly sound out Governor his awareness operations and background Joseph B. Kennedy.”  The telegram goes on to say:  “However sincere his intentions, Kennedy has consistently exaggerated his so far non-existent business accomplishments, has generated unfavorable local press comments, and has tarnished the American business image among leading Indonesians.”

The Kennedy Plan

2017_03_30kennedyplan

The pamphlet found in the Embassy folder on Kennedy was certainly an impressive read.  The publication’s opening lines reached out to grab the reader:

“A nation in transition attracts the problem solving mind.  Mr.  Joseph B. Kennedy, a man with such a mentality, an American citizen, a man with a purpose armed with the faith of a crusader has come forth with a system of endeavor, which, if effected, could profoundly influence the economic life of Indonesia.”

The pamphlet outlined six elements to Kennedy’s Plan: (capital letters in the original)

1.  The Indonesian Development Corporation–“This program is the heart of the Kennedy proposal.  It channels development so that the resources of the country are developed for the use and benefit of both the developer and the country.”

2. Consolidation of the Republic–“If the Republic is to be a truly consolidated nation, a single rapid transportation system and a highly refined communications complex are primary needs.”

3.  Bringing Tourists to Indonesia–“THE SEVEN MARVELS OF THE WORLD as a counterpart of the old “Seven Wonders of the World” with one of the new MARVELS located in Indonesia could be planned so when the new aircraft flying at speeds of 2000 mph carrying 500 passengers started operating, Indonesia would be in a position to benefit.”

4.  Bringing World Leaders to Indonesia–“This idea would entail having an organization of an international scope where SEVEN WORLD CONVENTION CENTERS would be established, the first one being located in Indonesia.  The leading companies of the world would sign up for 7 year contracts agreeing to hold their conventions AROUND THE WORLD.  Such a plan would bring INTERNATIONAL EXECUTIVE LEADERSHIP to Indonesia on a continual basis where OPPORTUNITY BULLETINS could be published for wealthy visitors.’

5.  Natural Resources and Financing–“The INDONESIAN DEVELOPMENT CORPORATION shall see that the national reserves of resources of the nation be proven, and with the information plus operating facilities, the reserves can then be used as collateral for obtaining necessary funds for use by the government.”

6. Developing Harbor and Minerals–“A new unit, THE HELIDREDGE can be disassembled and flown to remote areas.  Having a capacity  of 100 yards per hour and costing much less than other dredges, it can be utilized for harbor work and in placer mining or irrigation projects.”

The pamphlet contained facsimiles of official documents complete with stamps and signatures of Indonesian Army Lieutenant General Hartono as well as Kennedy and Mann.  In addition to the paragraphs praising Kennedy and his ideas and the official documents, there was a two-page description of a concept called the Jet Speed Cushion Rail Trans-Water Transportation System, the patented invention of Dr. Mann.  There were few technical details given about this system. The impression one gets in reading about the concept is that this is was a hovercraft that could also ride on rails at speeds approaching contemporary jet airliners.  That the system was a key component of the Kennedy Plan is indicated by the presence of a small art work depicting the cushion rail vehicle on the cover of the pamphlet as well as an implied route map traced on an outline of the Indonesian archipelago.

Downfall

By September, Ambassador Green was meeting with visiting potential investors in the IDC actively discouraging them from pursuing any venture with Joseph Kennedy.  A September 13 memorandum for the files, written by Embassy Economic Counselor Joseph Harary, detailed a meeting between the Ambassador and several men led by Mr. R. D. Alexander of Santa Barbara, California.  The hour-long meeting detailed the current situation in Indonesia politically, economically, and sociologically before moving to the specifics of Mr. Kennedy’s projects. By the end of that hour, Mr. Alexander and his associates promised to steer well clear of ISSUE, IDC, and Kennedy.

Joseph Kennedy’s downfall proceeded very quickly after the Alexander meeting.  Djakarta’s Airgram A-147 of September 15 summarized Kennedy’s troubles.  While he had moved his family permanently to Djakarta to better coordinate his business deals, Kennedy was not able to demonstrate progress on the two surviving projects for which he had been given responsibility by the Indonesian government–the Buton Island asphalt works and the Wisma Nusantara high rise building project.  Governor Brown, having been warned about Kennedy’s activities and reputation, wisely steered clear of meeting the man during a state-sponsored trip to Djakarta in July, thus depriving IDC of credibility and furthering the downfall of Mr. Kennedy’s reputation.  Djakarta Airgram A-218 of October 11 pretty much sounded the death knell for ISSUE, IDC, and Kennedy’s aspirations.  In this document the Embassy’s Deputy in Charge of Mission (DCM) Lydman informed the Department that a local Indonesian newspaper published an announcement that the Indonesian Presidium circulated a letter that called on all Ministers, and heads of institutes and agencies, not to conclude any agreements with ISSUE.  This news was officially confirmed by the DCM when approached by the Mohamad Sadli, Chairman of the Foreign Investment Technical Committee.  However, the Indonesian government did not want to declare Kennedy persona non grata, hoping that the disgraced entrepreneur would take the hint and leave the country on his own.

The final mention of Kennedy in the Embassy’s 1967 files was in the Department’s Airgram  CA-3110 on October 24th to Djakarta.  The Airgram clarified IDC’s now legal California corporate status, which was verified.  However, the corporation did not have permission to issue stock.  One of IDC’s officers, one Richard Niles, the Executive Vice President, opened the IDC’s office in the World Trade Center in San Francisco.  The Airgram also mentioned that Niles was the only IDC officer known to be active in the San Francisco area.  He requested that the office be listed at the WTC as the Institute of Human Dynamics, but the WTC rejected Niles’ request as the organization name was not related to international trade.  It is at this point the that the documentary trail on Mr. Kennedy ends in the Embassy files in 1967.

The IDC situation played itself out over a span of only eight months.  As is readily seen from the existing State Department documentation, ISSUE, IDC, and Mr. Kennedy were out to get money from any possible source–private investors, the Indonesian government, and the US government–to fund projects that were quite fantastic and unrealistic in scope, while failing to succeed in near term projects that should have been much easier to complete.  Due diligence on the part of the Djakarta Embassy and the State Department ensured that potential American investors, such as Governor Brown and Mr. Alexander, steered clear of any entanglements with Kennedy, thus limiting the damage to the reputation of American business ventures in Indonesia.

 

 

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