Following is the draft statement referred to in my E47. [1]

Part 1. The Australian Government is vitally interested in the
situation in the Netherlands Indies and in the future of
Indonesia. The war against Japan has shown the importance of this
region to Australia. We lost a large number of Australian troops
when the Japanese captured Java and our mainland was bombed and
otherwise menaced by the Enemy from bases in the Indies. Our
forces played a prominent part in the fighting in the Indies and
carried out the liberation of Borneo and Celebes, Flores, Timor
and other places and played an indispensable part in the
operations leading to the recovery of Netherlands New Guinea.

Despite our own shortages we have made available supplies for the
rehabilitation of the Indies.

While vitally interested we feel we can approach the present
involved situation in a disinterested spirit. We have no political
stake in the internal affairs of the Netherlands Indies. We seek
no exclusive advantages of any kind. Our interest in the region
lies in security and also in order, provided it is founded on
justice, welfare, progress and the satisfaction of legitimate
political aspirations. We would hope to see the early beginning of
an evolution in South Eastern Asia and Indonesia of a co-operative
group of self reliant states linked with other States of the world
by ties of trade, legitimate investments and political co-
operation and Mutual Aid.

The Australian Government is ready to do what it can to help to
bring about such a state of affairs. It has come to this decision
in a spirit of good will towards both the recognised holder of
sovereignty in the Indies and the legitimate aspirations of the
peoples.

Part 2. Before the present difficulties can be solved, however,
certain salient facts must be recognised. Some of these have
recently been obscured; they must be acknowledged by all parties
before peace, reconstruction, progress and freedom can be
established. These salient facts are:-

(1) There is a large number of Japanese troops in Java, of whom
only a small proportion have been disarmed. The Japanese, enemies
of peace and progress, must be disarmed and removed and all items
of their armament and equipment accounted for. This is a task for
the Allied Forces of liberation, the forces under South East Asia
Command, and is a part of the Military operations belonging to the
conduct of the war against Japan. This is a paramount fact and no
opposition to this operation can be countenanced.

(2) There is also a large number of Allied Prisoners of War and
civilian internees in Java, only about half of whom have as yet
been brought within Allied care. This also is an Allied Military
responsibility, and its execution cannot be opposed with impunity
nor without alienating the sympathy of the civilised world and the
United Nations. The Allied Powers and the United Nations must hold
the Indonesians collectively and individually responsible for each
single prisoner and internee.

(3) The sovereignty of the Netherlands is a fact internationally
recognised. The political forms by which this sovereignty is
exercised in any part of the Netherlands territories are not
immutable and the principle of development of Self-Government has
been publicly recognised by the Netherlands Government.

(4) The question of sovereignty and the development of local Self-
Government cannot be allowed to impede these forces in the
fulfilment of their legitimate, urgent and paramount task of
executing the Japanese surrender terms in respect of Japanese
forces and Allied Prisoners of War and Internees.

(5) In the particular circumstances of Java, the questions of
sovereignty and political reform have become involved with purely
military task of the Allied forces. This has rendered difficult
the early execution of these tasks.

(6) This situation would not be eased by the further early landing
of Netherlands forces which would result in greater confusion and
jeopardize the execution of the paramount military task of the
Allied force.

(7) The setting up of a new Indonesian Cabinet, consisting of
persons not identified with Japanese influence, has helped to
clarify the situation as views of the Indonesian Nationalist
movement can now be less prejudiced. The Cabinet has to some
extent been recognized de facto by both the Allied Military
Authorities and by the Netherlands Government. It would be helpful
to all concerned, however, if this process of dissociation from
Japanese influence in aid could be completed.

(8) Political aspirations of peoples who are fit for Self-
Government but have not yet enjoyed it not only have the sympathy
of the vast majority of the peoples of the democracies but the
charter of the United Nations recognises the legitimacy of the
claim for Self-Government according to the capacity of the peoples
concerned, and imposes on the parent Nations a sacred trust to
assist in this development.

(9) The people of the Netherlands have made a very great
contribution to the development of the Indies, and people of other
Countries have assisted in this development. These services should
not be overlooked. The fact that they have been rewarded in the
past would not excuse expropriation now and an equitable
arrangement concerning investment and other property would be a
necessary part of a settlement intended to be a basis for the
future.

(10) The situation in the Indies has developed beyond a point
where it could be regarded as solely a matter of domestic
jurisdiction of the recognised sovereign state. The effective
carrying out of the Japanese surrender in this region is involved,
and this is a matter of direct interest to all Allied belligerents
in the Pacific war. Forces of the Allied Command are engaged. It
is no longer possible entirely to separate the military from the
political aspect of the situation.

(11) It is clear that the efforts so far made have not produced an
acceptable solution, and there is grave danger of a drift into
large scale warfare in Java, leading to further loss of life,
destruction, impoverishment of millions, dissipation of economic
life, serious risk in the loss of many Allied Prisoners of War and
internees, and a long delay in the task of rehabilitation and
reconstruction which should have already been underway.

Part 3. The Australian Government believes the solution lies along
the lines of the proposals set forth below. It is conscious that
they ask a conciliatory attitude of the sovereign power, the
Netherlands Government, but the Australian Government believes
that the Netherlands Government will adopt them in a spirit of
realism and magnanimity in the interest of peace, order and
justice, and future stability in the regions in which both the
Netherlands and Australia have so great a stake. They also make
demands on the Indonesian Nationalists for moderation and respect
for the sincerity and good faith of the Netherlands Government.

The Australian Government's proposals are as follows:

(1) That an immediate truce of thirty days be declared throughout
Java;

(2) That no Netherlands Forces be landed within that period;

(3) That Representatives of the Netherlands Government, the
Indonesian Nationalist Movement, South East Asia Command, in
respect of military matters concerning the Allied Powers, and the
Australian Government meet within one week of the beginning of the
truce and remain in continuous session during period mentioned,
with the object of arriving at terms upon which the Government and
Administration of the Netherlands Indies will be based, these
terms to be the subject of a formal agreement between the
Representatives of the Netherlands Government and the
Representatives of the Indonesian Nationalist Movement;

(4) That an Australian force be landed under South East Asia
Command to arrange and supervise the concentration and removal of
all Japanese troops and Allied Prisoners of War and Internees,
this force to have guarantees for the immunity of its personnel,
and its task to be strictly limited to the purposes mentioned;

(5) That in regard to Japanese Arms and equipment, their
disposition as between the Japanese and Indonesians to be frozen
as at the time of the issue of this statement. The Japanese and
Indonesian Commanders to be responsible that no arms or other
equipment pass between their respective forces, that any
contravention of this provision be a ground for an exception to
the amnesty proposed in sub-paragraph 7 below and that the
ultimate disposal of all Japanese arms and equipment be a matter
to be determined by the Conference proposed in sub-paragraph 3
above;

(6) That in regard to Allied Prisoners of War and Internees not as
yet under the care and protection of Allied Forces, the Indonesian
Nationalist Leaders provide immediately for their complete
protection and for their welfare, and undertake to hand them over
without exception to an Allied Authority;

(7) That the Netherlands Government undertake to proclaim an
amnesty covering all acts of war and placing activities on the
part of any Indonesians, this amnesty, however, not to cover acts,
proven by due process of law, to be war crimes or crimes
punishable under ordinary criminal law, the interpretation of
these clauses [and] the proclamation by the Netherlands Government
to be determined by the Conference in sub paragraph 3 above;

(8) That adoption of these proposals be officially notified to the
Australian Government within twenty-four (24) hours of the
official publication of this statement, viz., at or before........

hours on......... (date) ......, the thirty (30) days truce to
commence from that time and to be officially and separately
proclaimed by the four Authorities mentioned in sub-paragraph 3
above immediately on notification by the Australian Government of
adoption of the proposals by the Netherlands Government and the
Indonesian Nationalist Leaders.