My Minister  has asked me to pass informally to the Ambassador  certain information  which has come to us from a Dutch source in Singapore concerning the present position in Indonesia.
I should be glad, if you should send this message forward for the information of your Government, if a request could be made that the source, that is Singapore, be not revealed.
Our reports indicate that the Dutch Army officers are endeavouring at the moment to engineer a crisis in Indonesia. They profess alarm at the skilful infiltration of their areas recently by T.N.I. forces. To meet the situation, the Dutch Army Command is believed to have already recommended to the Crown Representative, Lovink, that a third police action must be envisaged, that is prepared for, or that the Dutch should immediately retire to prepare consolidated positions, presumably to resist any further T.N.I. infiltration.
It is understood also the Dutch Army morale is low, and the Dutch Army Command is concerned at the result of having such large numbers of men virtually unoccupied.
The Head of the Dutch Military Intelligence Organisation, Somer, apparently is strenuously opposing Lovink's policy, which he regards as pro-Indonesian. These elements at Batavia have, it is understood, deliberately sent messages to The Hague during The Hague talks indicating further T.N.I. infiltration and raids in an attempt to bring about the failure of The Hague deliberations, which, if successful, they would regard as being fatal to Dutch interests.
Independently, we have received fairly full accounts of The Hague discussions. They apparently got off to a good start, and Critchley's reports were quite encouraging. During the last few days, however, it has been made clear that no progress has been made and that serious problems are being faced. If at any time you are in the Department, McIntyre would be glad to give you further details.
One of the causes of difficulty is the question of New Guinea.
While we are not in a position to suggest it, the obvious move the Dutch should make is to place New Guinea under trusteeship under their own administration. However, this is only one of the many matters at present causing difficulty.
No doubt your Government has its own reports both on the development of The Hague talks and on the situation in Indonesia.
I am directed to forward you informally this information, because we are inclined to believe that such moves are being made on our general knowledge of the persons concerned, but it is only the United States Government which at this stage can make any constructive intervention direct with The Hague authorities.