Ambassador saw Butterworth today and spoke along lines of your telegram No. 4. 
Butterworth said United States regarded it as unfortunate that an Asian Conference should have been called in such an emotional atmosphere. He feared that Committee might 'sow dragons' teeth'.
United States Ambassador in India  had expressed concern to Acting Foreign Minister  regarding calling of conference and one of Nehru's statements. Presence of Australia might, however, assist in keeping the Conference on objective plane.
2. Butterworth said the State Department had been considering what action could be taken in the Security Council in face of the situation created by Dutch action. United States had attempted to secure resolution ordering withdrawal of troops but had failed to secure sufficient support. He doubted whether majority could be secured now. Some action was required which took new circumstances into account. There must of course be no condoning of Dutch.
United States had been considering possibility of resolution calling for elections under supervision of Committee of Good Offices and providing for transfer of sovereignty within a stated period to a United States of Indonesia in which the Republic would have just representation. Another possible approach would be to 'smoke the Dutch out' with respect to their many assurances. The line which the United States would take would probably not be determined until after the return of Jessup who will arrive in New York tomorrow. 
3. The Ambassador stressed need for effective steps by Security Council before further reactions developed in Asia. Butterworth agreed that this was desirable but gave the impression that in his view the opportunity had now passed for obtaining a withdrawal by the Dutch.
4. The Indian Ambassador  requested an interview this afternoon to discuss Indonesia. He said he had suggested on a personal basis to United States officials that the Brussels Pact  and North Atlantic Alliance  by creating a common front against the U.S.S.R. in the west might divert Soviet energies towards Asia.
The Netherlands, while contributing [to] the security in the west, were helping to create in Indonesia conditions of insecurity for South East Asia. He had suggested that the United States might warn the Brussels Powers that it would be difficult for the United States to join a North Atlantic Pact unless the Imperial Powers refrained from Anti-Nationalist measures in Asia. Sir Rama felt that this argument had impressed State Department officials and that it might be elaborated to good effect. (A State Department official has expressed concern to us that the Dutch aggression might deter other Western European powers from joining the North Atlantic Alliance, as other acts of aggression might be allowed to go on unresisted.) 5. Sir Rama also said that his Government had made clear to the United States that in calling the Asian conference, it had no thought but to act strictly in accordance with the Charter. He said he appreciated Australia's decision to attend the conference which would negative any suggestion that it had a purely racial basis.