38 Makin to Department of External Affairs

Cablegram 133 WASHINGTON, 29 January 1948, 6.30 p.m.

SECRET

Indonesia I went today accompanied by Minister to State Department to see Associate Under Secretary Armour who had with him Lacy, N.E.I.

expert, and Richards. I developed at length the views set out in your telegram number 80. [1] Lacy said that U.S. advices were that there were very few exportable products from Republican area.

Sugar was only product in large quantities and this had been held up for so long-through no one's fault-it had now deteriorated. I replied that if this was the case it would be easier for the Dutch to be accommodating.

Armour said that it was their view that Committee should remain in Indonesia-if not Graham himself then someone else.

As regards exports this would require some study and he would undertake it at once.

I understand from a member of my staff that Lacy and others in State Department take view that Dutch have been reasonable in their attitude to recent negotiations whatever they were in the past.

Armour, as always, was extremely cordial and said he would communicate with me again.

1 Document 34.

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