270 Embassy in Washington to Department of External Affairs
Cablegram 1090 WASHINGTON, 8 October 1948, 12.37 a.m.
Your 855. 
At the time the Netherlands Embassy informed State Department that they would accept the Cochran proposals (our 1079 ) they mentioned that they would have certain proposals which they would want discussed during the negotiations. State Department did not attach any particular significance to this until they received advice, presumably from Cochran, as to the nature of the Netherlands counter proposals and the further conditions they were attaching to resumption of negotiations.  On learning what the Dutch were proposing, the State Department informed the Netherlands Embassy, and instructed the United States Ambassador in The Hague to inform the Dutch Foreign Office, of their concern.
They told the Dutch that the conditions and counter proposals would almost certainly be unacceptable to the Republic and that Hatta would probably appeal to the Security Council. They said the United States would not feel in a position either to recommend acceptance by Hatta or to dissuade him approaching the Council and that in the Council debate, the Cochran proposals would inevitably be discussed. in that event the United States would, of course, support the proposals of their representative. So far as we can judge, the State Department spoke firmly and solemnly and feel they can do no more to impress on the Dutch their deep concern.
They are now awaiting the Dutch reaction though without too much optimism.
2. We understand that the United States is giving serious consideration to methods by which they can send economic assistance to Hatta and that Cochran has been asked for his recommendations. Soumetro, the Republic's Trade Representative, we believe, entered into a contract for a supply of 1,000 trucks from the United States but these would obviously take some time to arrive. Another possibility is diversion of vehicles en route to China but State Department fear criticism from Congress if this were done. It was suggested to us today that this might be an appropriate moment for Australia to approach the Dutch again for permission to send medical supplies to the Republic. The State Department feel it might assist if it could be stated that purpose was to assist Hatta in his struggle against Communists and that the Dutch would be free to inspect the shipments to ensure that they included only medical supplies.
3. One aspect which is clearly giving concern to the United States at the present time is the risk that if Hatta gains the impression that the United States will give him strong support because of his firm stand against Communism he may feel that there is no need for negotiation or compromise. The United States realise that the Dutch have exploited the Communist bogey in the past, and they do not wish to create conditions in which Hatta may play the same game.