Your 1006.  Indonesia.
The Ambassador saw Senior State Department Officials today.
The United States Government is shocked at Dutch action taken despite frequent assurances that police action would not be resumed. The State Department agrees that the Security Council must take immediate and firm action to ensure cessation of hostilities. United States Delegation will co-operate closely with Australian representative in Paris.
2. United States representative attempted to persuade Langenhove last week to take the initiative in the Security Council and to urge both Parties not to resort to force. Langenhove refused.
United States representative was instructed yesterday, after Dutch had announced establishment of interim regime, to ask Australian and Belgian representatives to join in approach to the Security Council. Langenhove would not agree, but United States hopes that in view of hostilities Spaak, who was to be in Paris today, may possibly co-operate. In any event United States expect to secure meeting of the Council tomorrow, Monday.
3. United States consider the first objective is to stop the fighting. The Council should then direct attention to restoring the position of the Republic. Consideration has been given to possible use of economic 'sanctions' and United States representative has been instructed to approach other Delegations to ascertain whether their Governments would support such sanctions. The State Department cannot commit the United States Government at this stage but is consulting with the United States Military Establishment to obtain their concurrence.
4. United States assume that the Committee of Good Offices cannot continue to function as such in the changed situation, and that its report on the circumstances surrounding the Dutch action and reports of the Military Observers on the fighting will be its last official action. (One United States observer is in Djokjakarta and will be reporting on bombing. Latest United States report is that Dutch Parachutists control the airport.) 5. The United States envisage that new body will have to be established to supervise implementation of Security Council Resolutions. They still do not favour participation by U.S.S.R.
and Ukraine and have in mind Canada and Norway.
6. Our impression is that the United States are now convinced that effective and realistic measures must be taken and that they really mean business.
7. Your 1008  just received. We will keep in touch with the State Department and report all developments. The Ambassador is to see Lovett tomorrow morning.