CANBERRA, 7 August 1947

INDONESIAN DISPUTE
Australian Offer of Joint U.S.A.-Australian Arbitration

The Prime Minister commented today concerning reports of an
American offer to mediate in the Dutch-Indonesian dispute.

The decision of the Security Council was that the two parties
should cease hostilities and then submit to arbitration or other
peaceful means of settling the dispute. When that decision was
taken by the Security Council, it was interpreted by the
Australian Government as meaning that the two parties would submit
their case to an arbitrator who would give a decision which would
be binding on the two parties, the arbitrator acting as an agent
for the Security Council. Consequently, any offer merely of good
offices does not adequately meet the situation.

Reports are current that Republican authorities do not find
mediation acceptable, nor do they find the good offices of only
one country acceptable. While it is understood that the
Netherlands Government has accepted the American offer, it must be
accepted by both parties before negotiations can commence. It
might be recalled that previously the Indonesians accepted the
good offices of the United Kingdom, United States, and Australia,
which were put forward separately, but these, at that time, were
not acceptable to the Netherlands authorities.

The present situation is full of dangers as, while there is a
truce, there is no negotiation or contact between the two parties,
and incidents are likely to occur each day which might make
negotiations more difficult. The period between the cessation of
hostilities and the commencement of negotiations should be as
short as possible.

If both parties consider it would help to terminate this interim
period and to commence negotiations immediately, the Australian
Government, for its part, would be prepared to act jointly with
the United States Government in a capacity of mediator and
arbitrator.

This offer is made in the spirit in which the Australian
Government raised the matter in the Security Council, that is in a
spirit of impartiality and with one desire only, to see, as soon
as possible, a peaceful settlement of the prolonged dispute in the
Netherlands East Indies.