While the results of our reference to the Security Council are satisfactory insofar as they go, we cannot be content to leave the matter there. Hostilities have ceased, but mediation has not commenced. The American offer of mediation has been accepted by the Dutch, but it should not be assumed that this form of mediation is acceptable to the Indonesians. They have a clear right to be consulted, and our advice is that they will insist upon another party as well as America. They may have India in mind.
2. When we raised the matter in the Security Council, we endeavoured to make it clear to the Dutch here that the choice was between Australia raising it and retaining the initiative in such a way as to prevent merits being discussed and to guide the final solution, or another power raising it with the full intention of discussing the merits from a prejudiced point of view. We tried to persuade them that the long-term solution that we desire is not inconsistent with Dutch aims, and the difference of our point of view was merely that we believed that Dutch action would lead to their eventual expulsion, but that a satisfactory arrangement could be made if the Security Council ordered the cessation of hostilities and mediation.
3. We have been proved correct. India did raise it, but the form of our resolution gave it priority, and we were able to steer the two-day discussions to a conclusion which the Dutch must regard as very satisfactory.
4. A similar situation now has to be faced. Indonesians, supported by public opinion and by many members of the Security Council, are demanding Dutch withdrawal to points occupied before hostilities.
Dutch action in making landings after the order of the Security Council has done tremendous harm to the cause of successful mediation. In this situation, American arbitration is not only probably unacceptable, but cannot possibly meet with success, and the matter is likely in the near future to go back to the Security Council or go to the Assembly. The immediate problem is to get arbitration operating smoothly in the near future and, in any case, before the Assembly meets. As an arbitrator cannot reasonably be forced on the Indonesians, the Dutch must accept second country, and the choice will be between India and ourselves. We are well aware that we are not regarded favourably by the Dutch, but, at the same time, it is difficult not to make the observation that a statesmanlike solution would be for the Dutch to indicate to the United States, or even indicate publicly, that they would be prepared for mediation by America and Australia, particularly as Australia had raised the matter at the Security Council in a completely disinterested way, as opposed to India, where prejudiced statements were publicly made. The Dutch should have confidence in the way in which we should act, particularly as we would be acting as an agent for the Security Council, at which body no one can question the judicial attitude which has been followed by Australia in every situation so far discussed.
5. A second and related matter is that, for reasons similar to those outlined above, it is essential that we should have some point of direct contact with the Indonesians and be in a position to advise during negotiations. The Indonesians are completely inexperienced and Richardson, when at Batavia, observed that he felt that, if they had someone advising them in whom they had confidence, many problems could be overcome. If we cannot assume that role, or be in a position to persuade at a critical time, it only means that the indirect advice of other countries will be taken. We wish therefore, to send to the Republican capital as soon as possible an Australian who need not bear any title but representative of Australia at Jogjakarta.
6. If the second suggestion in any way weakens the position on the first, it should not be made. Please endeavour to put forward this advice informally and with conviction, as action by the Dutch along these lines would be dramatic in the sense of immediately promoting world confidence in Dutch policy and immediately solving what must otherwise be an impossible problem, and avoiding further reference to the Security Council. Please fully and immediately advise reactions. We are not mentioning this proposal to United Kingdom Government, as they have indicated more than once that they do not feel disposed to concern themselves with this matter any further now that the United States has offered mediation.