My telegrams 23rd July, D. Nos. 638 and 639. 
It is our opinion that the Dutch may gain an initial military success but that the resulting situations in South East Asia cannot fail to cause dislocations in the whole area and that in spite of legal and juridical arguments which may be advanced by the Netherlands Government problem must be considered on a practical and realistic basis.
2. It is significant that in their statement in reply to our latest offer of good offices  (see the Foreign Secretary's statement in the House of Commons text of which is contained in my telegram D. 638) Netherlands Government were at pains to stress their friendly relations with and help received from both the United States and United Kingdom Governments (although in fact no offer of help has been made by the United States Government since the latest developments occurred) rather than to respond to offer of good offices made by the United Kingdom Government alone.
3. We are accordingly convinced that the only hope of arresting the present course of events is for the United States and United Kingdom Governments to induce the Netherlands Government to accept some form of arbitral solution (which would first have to be agreed between the arbitrating Governments). We may expect that the Dutch will dislike and perhaps resent this though Indonesians are likely to agree readily to any reasonable solution proposed which would put an end to the fighting.
4. The urgency of this proposed course is in our view increased by prospect that the matter will otherwise be taken before the Security Council with the probable consequence that it will be exploited by Russia to embarrass and discredit western powers and pose as champions of oppressed Asiatic peoples.
5. We have accordingly instructed the United Kingdom Ambassador at Washington to make an urgent approach to the United States Secretary of State on the above lines. Our object is not to suggest concrete terms of any solution which it might be possible to urge upon Dutch; this would of course require most careful consideration by experts. We consider, however, that to have any chance of success solutions must aim at finality and must provide that the Dutch and Indonesians bind themselves in advance to accept our and United States award.