My immediately preceding telegram Indonesia.1 1. In view of the worsening situation in Java and the reported discussions in London between the Dutch representatives and English Ministers , we have been giving consideration to the policy to be adopted towards the Dutch-Indonesian conflict.
2. Certain factors have in this situation impressed themselves upon us as being significant. Some of these factors have been stressed to us by observers formerly interned in Sumatra.
Incidentally we are fully conscious of the need for having as many observers as possible on the spot and are making plans accordingly.
(a) There is a paramount need for the elimination of Japanese influence if only for reasons of prestige. It is obvious that whilst the Japanese troops remain in the area they will be a potential source of trouble. Furthermore, indications up to the present are that the main responsibility for removal of Japanese influence will fall upon British forces. This is a fortunate result in as much as prior to capitulation all groups looked to the United States for relief.
(b) The Indonesian fear of reprisals as a result of the severe handling of political offenders in the past by the Dutch administration.
(c) At least in the outer possessions, Java being an unknown quantity, the Dutch will lack for some time to come any real organized administrative structure. Many of their district officers will have perished and the Dutch will be very much dependent for some time to come on local native representatives.
In any case in pre-war days administrative staff was under manned.
Whether these local natives will be able to cope with all necessary administrative work is doubtful. Relations between older, more stable elements in population and local collaborators formerly working for the Japanese require investigation. The Japanese trained volunteer army (heihos) [was] largely recruited from undesirables and some possibly may still have arms.
(d) Another important factor which has weighed with the Indonesian movement, and which appears to be a valid contention, is the opportunity that has been afforded to commercial interests. It may be that there are elements in the Dutch administration who are genuinely opposed to the primacy of commercial interests but the fact remains that these interests have occupied an over- influential position in the government of the islands. General feeling is that profits from exploitation of the rich natural resources of the East Indies flow to the mother country and entirely insufficient proportion of the profits is devoted to raising standards of living of local, population and development of N.E.I. generally.
(e) It is difficult to estimate the dependence of the Dutch in the immediate future upon Australia in the matter of supplies of food and materials needed in the Indies but it would appear likely that the Indies will look to Australia for assistance in reconstruction.
(f) Observers believe that the Indonesians would more readily accept non-Dutch white troops in carrying out the expulsion of the Japanese. It must be realised, however, that in such a situation as exists in the Indies today, there would be a continual danger of serious clashes between the Indonesians and, for the sake of argument British troops. This might have unfortunate effect upon prestige of the British citizen in the eyes of the Indonesians.
Any action taken would therefore have to be on such a scale as to be definitive.
(g) It seems at least doubtful whether the Indonesians are ready for full self government. Probably a period of tutelage will be necessary. Furthermore, it is difficult to estimate the real strength and for that matter the capacity of the republican movement.
(h) It must be acknowledged that the Dutch have a sound administrative record particularly in the matter of health services and material development. The majority of the natives were apparently fairly satisfied with such progress as was achieved and were not as a whole, it seems, politically conscious nor were they encouraged to be so. Indeed, at least certain sections of the nationalist movements in pre-war days did not seek immediate independence and moderate opinion in all circles favoured something approaching Dominion status. Of course the effect of Japanese occupation on the outlook of the Indonesians must be allowed for. On the one hand it may be that the effect of Japanese occupation has been to make the majority of the Indonesians more willing to accept the return of white rule. On the other hand it is possible that the overthrow of white rule and consequent loss of the prestige of the white man may have strengthened the forces working for immediate and full self- government. It is difficult to estimate without adequate observation which of these two consequences has followed.
3. Bearing all these factors in mind, we have come to the following conclusions and would appreciate your urgent comments:
(a) The Dutch will be dependent on the United Kingdom for military support in the immediate future at least and may possibly be compelled to look for supplies of food etc. from Australia. For guidance of our own policy information therefore desirable regarding United Kingdom objectives and available forces.
(b) It does not seem unreasonable that in return the Dutch should be prepared to give certain guarantees such as:-
(i) Guarantees that Indonesians are not punished because of their political convictions.
(ii) A public recognition by the Dutch of the obligations imposed on countries responsible for dependent territories under Article 73 of the United Nations Charter.
(iii) The securing of a pledge by the Dutch that they will be prepared to place the Netherlands East Indies under the International Trusteeship System envisaged in Chapter 12 of the Charter (Article 77 (C)).
4. It is fully appreciated that the Dutch will be extremely unwilling to pledge themselves to (ii) or (iii) above let alone the first two guarantees. Furthermore, it is also appreciated that the securing of such a pledge to place the Netherlands East Indies under the Trusteeship provisions of the Charter would carry certain implications in regard to Malaya, French Indo-China and of course New Guinea and Papua and other dependent areas in the South East Asia region. These implications would necessarily have to be faced by the United Kingdom, French and our own Governments. It is felt, however, that the situation in the South East Asia Area is so full of explosive possibilities in the future that only fairly drastic remedies applied now will have any hope of successfully resolving the situation by meeting the legitimate demands of the native peoples whilst at the same time preserving some order and stability by permitting the return of the previous administration, experienced and skilled in handling these peoples. There is no need to stress the vital security interests of Australia in fostering a liberal settlement of the problems of the dependent peoples of this area.
We shall be communicating with the New Zealand Government on this subject merely at this stage acquainting them with a few of the considerations listed above under paragraph (2) and perhaps mentioning the possible course of action to them, without committing ourselves before you comment as to the adoption of any particular course of action. It may be that the New Zealand Government will feel disposed to support us in any representations to the United Kingdom and the Dutch authorities.