272 Department of External Affairs to Officer
Cablegram 103 CANBERRA, 10 August 1947, 1.30 p.m.
MOST IMMEDIATE SECRET
Your 133 and 134. 
1. Indonesians accepted American offer of good offices and ask them to be used to obtain arbitration by group of nations. This is virtually polite rejection and has been so interpreted by American Consul-General Batavia.
2. Meanwhile Indonesian Prime Minister has accepted our proposals for joint American-Australian arbitration. This offer was of course made to both parties.
3. Position now is that Dutch have accepted American mediation.
Indonesians have accepted American offer of good offices and have requested they be used to secure arbitration by a group of nations. Indonesians have accepted our proposal for joint American-Australian arbitration.
4. Way should be open for agreement before Security Council meets on our proposal or as compromise our proposal with addition of one other nation for example United Kingdom which would be acceptable to the Dutch.
5. It is unlikely Security Council will accept proposal of mediation and Dutch will be faced with choice of eleven power commission  of arbitration or failing agreement between Dutch and Indonesians on this reference back to Security. Council which shall itself endeavour to arbitrate. Talk of American veto  has nothing to support it as it would be politically impossible.
Agreement by the Dutch along lines of paragraph 4 above can assure satisfactory conclusion and they would be unwise to allow incorrect reports regarding our action to prevent them adopting this satisfactory course of action.
6. Regarding paragraph 2 your 134. My immediately following telegram is repeat of message from Hodgson  and should be communicated at once.
7. Please endeavour to obtain another interview with Foreign Minister explaining position as outlined above.