443 Embassy in Washington to Department of External Affairs

Cablegram 1306 WASHINGTON, 23 December 1948

MOST IMMEDIATE CONFIDENTIAL

Following is account by State Department officials of U.S.

assessment of probable course of Security Council action.

(a) U.S. resolution [1] now has support of China, Colombia, and Syria. Argentine and Canadian position is unclear. U.S.

Ambassador, Ottawa, has been instructed to see Pearson and press for support which is hoped. Soviet-Ukrainian position not yet known. In view of Hatta's action against communists U.S.S.R.

apparently hesitated as to line they should take, but probably will call for condemnation of Dutch and complete withdrawal of all Dutch forces from Indonesia. if this is defeated they will probably support U.S. resolution, which would then pass. Belgian opposition assumed, but in view of Herremans' association with Cochran and Critchley today Belgium might abstain. Assumed U.K.

and France will support cease-fire and abstain on withdrawal.

French veto not feared.

(b) U.S. fear Netherlands will continue to deny jurisdiction of Council and will not withdraw. They doubt whether Dutch will even allow opportunity for Good Offices Committee to make authoritative report. This would make even clearer Dutch defiance. U.S. would in that event be disposed to support resolution condemning Dutch (they do not think this should be included in present resolution).

(c) U.S. does not consider majority could be secured for Security Council resolution to impose economic sanctions although U.S.

might support such a resolution if it had a chance of success. At most, support might be obtained for sanctions directed against Dutch in N.E.I. only. Another possibility would be resolution approving action taken by United Nations members in support of Council decision but not calling on members to participate.

However, U.S. considers that if (a) Council passes cease-fire and withdrawal (b) Dutch do not comply (c) Council condemns Dutch, this would amount to approval by Council of whatever steps Governments decided to take unilaterally or on a regional basis (such as action already taken by Ceylon and India. [2] United States understands India may break off diplomatic relations with Netherlands.) 2. Our impression is that United States does not wish to take any economic measures other than the suspension of ECA authorizations to NEI now in effect. State Department officials claim that administration does not have constitutional power to upset contracts once concluded or to stop deliveries. (Our reading of Sections 118 and 119 of the ECA Act is that delivery of supplies scheduled could be terminated although question is complicated by differing procedures, e.g., whether by subsequent reimbursement or by letter of commitment. Also, in order to terminate deliveries, assistance would have to be terminated for the Netherlands and not merely N.E.I. It would also require finding either that Netherlands had not adhered to its ECA agreement or that assistance is not consistent with the national interest of the U.S.) So far the U.S. Government have scrupulously avoided any such finding and has based suspension purely on the ground that there is no assurance that aid can be distributed efficiently!

1 See Document 407.

2 See Documents 422 and 424.

[AA:A3300/7, 688]