I have seen the telegrams exchanged during the last few days
between the Secretary of State for Commonwealth Relations and the
Australian Government on the subject of Indonesia. [1]

As you know, we have been putting pressure on the Dutch as well as
the Indonesians to settle their differences. We are now
considering, with the United States Government, whether we can
together make an attempt at mediation and arbitration. We feel it
our duty to try to secure a direct settlement according to the
spirit of the Charter before the matter is referred to any other
body. We. have kept the Australian Government fully informed
throughout these negotiations. We are very conscious of Australian
proximity to Indonesia, of her consequent interest in all that
happens there, and it is of course for the Australian Government
to do what they think right. But the situation is also a difficult
one for us in view of our vital responsibilities in that area and
of the task of mediation which devolved upon us at the time of the
Japanese surrender.

The Indian Government is now pressing us to offer mediation
together with the United States Government. This seems to us an
additional argument for taking no further action until we see
whether the United States are prepared to respond to our latest
proposal. If they are not, a new situation will be created and we
shall of course consult with you immediately. It is the fact that
preliminary United States reactions are not particularly
favourable but they have promised full consideration of our
proposal and it remains to be seen what their final view will be.