Your 4796 INDONESIA. 
I discussed the position with the Secretary of State for Dominion Affairs this morning and emphasised the views contained in your telegram as well as drawing attention to the Cabinet decisions set out in my written memorandum to him of Friday last.
He is to provide me with a memorandum on two points viz., (A) Reason for the necessity of retaining British Troops until the end of November, and (B) Reasons underlying the Admiralty undertaking to supply ammunition to the Dutch.
In the meantime my general impressions may be useful and this message will be followed by a precis of the memorandum as soon as it is received.
The United Kingdom Government is also concerned at the lack of negotiating enthusiasm on the part of the Dutch although more recent events lead it to hope that progress will be more speedy and certain in the next few weeks. It points to the recent legislation of the Dutch Parliament and the appointment of Commissioners General to go to Indonesia as some evidence of the change in tempo and spirit of negotiations. The United Kingdom instructions to Lord Killearn as set out in telegram D.369  indicate that [U.K.] Government would regard undue delay or reversal of the present policy to reach peaceful agreement as justification for withdrawal of troops as soon as military tasks are completed. I gather that you had not seen that telegram before despatch of your message to me.
At the same time Lord Addison says it is doubtful whether troops could be withdrawn before the end of November in any case apart from the fact that all prisoners and internees have not yet been rescued. In effect then, the Secretary of State can be said to agree with your views on the wisdom of taking all action possible to influence the Dutch towards hastening a settlement.
The position regarding the supply of British ammunition really concerns the Admiralty with whom I note the Service authorities are raising the matter. It is contended, however, that the Dutch ships are still under British operational control. Some of the ships were sold by the United Kingdom to Holland and are thus suitable only for British ammunition. I was assured that all major repairs were to be done in Holland and as far as practicable minor repairs in Singapore and that in no sense was Australia to be used as a base. I got the impression that the Secretary of State was concerned as to the Admiralty reaction to the Cabinet decision.
He stated that the Admiralty was under pressure to remove stores and munitions from Australia and that it had undertaken to supply stores and munitions to ships sold to the Dutch and suggested that all safeguards were provided by the fact of British Operational Control.
A further message will follow when the memorandum is received.