125 Moodie to Burton

Minute CANBERRA, 1 February 1949

The attached appreciation [1] is the final form of the document which was considered in the Joint Intelligence Committee last November and subsequently discussed with the Joint Planning Committee. Certain amendments have been made.

The main points appear on pages 2 and 3 [2] from which will be gathered the considerable divergence from the approach in our Appreciation. [3] The relevant reference is paragraph 29 [4] on page 6 referring to Chinese populations in South East Asian countries.

The statement regarding Indonesia in paragraph 39 [5], page 8, is reasonable but its condensation in paragraph 6, page 2, means very little.

In accordance with your instructions I took no part in the preparation or discussion of this document. [6]

This document will no doubt be considered by the Defence Committee and will ultimately go before the Council for Defence. The Appreciation prepared by this Department will presumably be dealt with in the same way in the Defence Department. I understand from enquiries in Melbourne that it has been considered by the Joint Intelligence Committee who do not quite know what to do with it.

[7]

1 Document 124.

2 i.e. paragraphs 4-13 of document 124.

3 See Document 121, Attachment thereto.

4 Paragraph 29 reads: 'It should be home in mind also that a potential subversive element exists in the presence in all these countries of large Chinese communities owing allegiance to their home government.' 5 Paragraph 39 reads: 'Both the Dutch Government and the Indonesian Republican Government are opposed to communism.

Although in the event of war, with the consequent preoccupation of Holland in European affairs, the Indonesian Republican Government may seize the opportunity to press their claim for autonomy against the Dutch it is unlikely that they would embrace the cause of communism to do so. If, however, unsuccessful in their aim of self-government, due to lack of support by the Western powers, it is possible that the Indonesian Republican Government may turn to the U.S.S.R. for assistance, which no doubt would be forthcoming.' 6 For Burton's instructions see Document 123, footnote 4.

7 Burton annotated the minute: 'Make it clear that you dissociate yourself fro. views so that when it goes to Defence Council it will not be said we were present & agreed.'

[AA:A1068/7, DL47/5/1A]