55 Ballard to Department of External Affairs

Cablegram 130 BATAVIA, 13 May 1947, 6.35 p.m.

IMMEDIATE SECRET

Gani and Hoogstraten contacted separately say their talk Monday was satisfactory. Agreement not yet signed pending conclusions on details of division of goods, amount of rice to be supplied in return, and prices. This will take a few days.

2. Joint message to the Australian Government will then follow.

3. Arrangements will be that the whole Indonesian payment in kind for their share will be made here to the Netherlands East Indies Government not sent abroad as exports.

4. Possibility of back-loading ships involved with export goods to Australia has been explored, but Hoogstraten's position is that exports abroad must wait for agreement in general Dutch-Indonesian talks concerning foreign trade and foreign exchange. He is hopeful of early conclusion of these and definitely has Australia in mind as source of supply and recipient of exports at that stage.

5. We understand that high Indonesian quarters are inclining to the view that compromise on the Economic and Foreign Relations aspects of the present general talks following Linggadjati would be worthwhile if implementation of the provision for the reduction of Forces would be secured. This may be very difficult and may prolong impasse.

6. Richardson has had useful talks on the financial position and possible technical arrangements on which he will report in due course. All agree there is no point in him postponing the departure for Singapore arranged for Thursday.

7. Carne left this morning.

8. In view of paragraph 4 above, fairly early establishment of Australian Trade Commissioner, Batavia, is desirable for preparatory work and Hoogstraten agrees with this.

[AA:A1838/278, 401/1/3/2, ii]