66 Embassy in Washington to Department of External Affairs
Cablegram 199 WASHINGTON, 13 February 1948, 8.08 p.m.
Your 79 to New York for Kirby. 
1. After full consultation with Kirby, Forsyth today had a frank discussion at the State Department with Lacy (South East Asia Division) and Bancroft (United Nations Affairs Division) making the following main points- Australia shares the concern of America with the stability and economic reconstruction of Indies area but considers it fundamentally important that in the process Indonesian aspirations should not be prejudiced and particularly that the position of Republic [a]s effective political entity must not be impaired. The Renville principles leave difficult questions, in the settlement of which general considerations of world economy should not be allowed to prejudice the Republic's immediate and eventual position. These questions include control of trade and foreign representation. Constant watchfulness and where necessary exertion of American and other influence will be needed to safeguard the Republic's position. The points listed in paragraph 4(C) of Kirby's telegram UN 106 (with the addition of plebiscites as in paragraph 1 of his 109). 
2. Reception of these points by the officials concerned who are principal advisers in this question, were on most points very satisfactory, and they were definite that the United States firmly intends to secure just implementation of the Renville principles and assist the Republic to maintain its position as an effective political entity.
3. Specifically (A) United States desires 'supervision' of plebiscites and officials concerned were confident that this could be secured by the Committee's own action and evolution. They felt, however, that if formally proposed in the Security Council the Dutch would feel obliged to resist for reasons of prestige.
(B) Similarly, in regard to stronger powers for the Committee (public suggestions as in paragraph 4 UN 106).
(C) Should the Dutch show disposition to reject the request of the Republic for continuance of Committee after political agreement the United States would undoubtedly make strong representations.
(D) They would regard creation of new States by the Dutch as contrary to the spirit of Renville agreement and inconsistent with the status of the Republic as a party to settlement involving the whole area. In their opinion the Dutch would be foolish to continue such action and they believe the Dutch realise this.
(E) As regards foreign representation of the Republic, American advice to the Dutch would be to treat this issue gently with a view to settlement at a convenient time in relation to future overseas representation of the Indies and in such a way as to save face of the Republic.
4. In regard to Trade, the State Department's general position has not altered from that stated to the Minister by Lacy, vide Washington cable to you number 156.  Officials interviewed envisaged a relationship between this question and the powers of provisional [and]  interim Governments. Recalling the desire expressed by Butterworth (see UN 106 paragraph (2)) that the Republic join the present provisional Government, they felt that if the provisional Government were revised to possess real powers the Republic might see its way to merge control of its Trade in [control]  of Trade of the whole area in which it would participate. Adequate representation of the Republic would be necessary though United States would not be able in view of Dutch sovereignty to go further than make suggestions to the Dutch on this. They said that the Netherlands Government is concerned with problems of avoiding arbitrary exercise of sovereign powers by officials of the Indies. The Americans are very conscious of the desirability of restraining the Dutch from over legalistic attitude, especially now the Dutch are committed to handing over the sovereignty in the not distant future.
5. Lacy and Bancroft said that the Dutch wish to avoid difficult issues in the Security Council and would feel better able to do so if the Indonesians also refrained. They said that the United States certainly does not wish such issues to be raised. In [re]ply to direct question as to whether Australia intended to raise such issues, including [trade]  and foreign representation, Forsyth said that while the Australian attitude might be influenced by conversations of Monday  and today, unless the Australian Government felt convinced that everything possible would be done to ensure successful and just implementation of Renville principles, the Australian representative must be free to raise fundamental questions in Security Council, in order that Council should not be left in ignorance of real obstacles to settlement still remaining.