With reference to telegram 921 from Mr. Bruce [1] conveying the
proposal of the Netherlands Government for the exchange of
diplomatic representatives between Holland and Australia, I desire
to offer the following comments.

Subsequent to the invasion of Holland and the collapse of France,
the position of the Netherlands East Indies vis-a-vis Australia
has assumed greater significance. As our nearest neighbour we are
closely concerned with the political, economic, and military
developments in the East Indies. Questions of common defence,
munition supplies and air communications all raise problems the
solution of which would be facilitated by an exchange of
Ministers.

While a Dutch Minister would be welcomed in Australia, it is
doubtful if Australia would derive any real benefit from the
exchange unless the Australian Minister accredited to the Queen of
the Netherlands in London was actually located at Batavia. To this
there might be some objections, as a Minister would have
precedence over all other foreign consular representatives in the
East Indies. The Dutch would probably be faced with an immediate
request for the appointment of a Japanese Minister, which in
present circumstances would prove an embarrassment to them.

There is also the fact that consequent on the establishment of the
Netherlands Government in London, many of the wider powers granted
to the Governor-General of the Netherlands East Indies in
anticipation of the occupation of the Netherlands have been
withdrawn. Thus, most questions of moment and policy which would
ordinarily be raised by a Minister would still have to be referred
by the colonial administration to London. These objections would,
however, be obviated if the press report to the effect that the
Queen of the Netherlands and the Dutch Government might shortly
transfer to Batavia, proved to be correct.

It might also be observed that in view of the personal discussions
which have taken place between yourself and Dr. Pao [2], the
Chinese Government may be under the impression that China will be
the next country selected for an exchange of Ministers.

In the circumstances, I suggest a telegram along the following
lines be sent to Mr. Bruce:-

'Your 921 of 16th October. Exchange of Netherlands and Australian
Ministers.

In principle, we would welcome a Dutch Minister in Australia, but
in view of unprecedented circumstances in which Dutch Government
is placed, the location of an Australian Minister in London would
have little practical value or benefit to Australia.

We are now intimately concerned with the political, economic and
military developments in the Netherlands East Indies, and closer
contacts will become inevitable. Therefore, if it were possible
for an Australian Minister to be accredited to the Dutch
Government in London but actually stationed in Batavia, we would
view the proposal favourably.

Such an unprecedented arrangement might, however, not appeal to
the Netherlands Government in view of various difficulties which
we can appreciate.

If the Queen and Government were to proceed to Batavia, as
reported recently in the press as being under contemplation, these
difficulties would be obviated.

Would be glad if you would convey to Minister for Foreign Affairs
[3] our appreciation and close interest in his proposal, obtain
informally his views on the suggestion we have advanced, and in
meantime keep the question open.' [4]

[F. STEWART]