Security 438 (repeated as 435).

INDONESIA.

1. The Indonesian question came forward for discussion late this
afternoon [1] (first part of the session was devoted to statements
by Albania and Bulgaria on Greece).

2. We supported the request of the Philippines to participate but
the resolution to issue invitation received only six votes
(Australia, United States, Syria, China, Brazil and Colombia).

3. India then reviewed the history of the case stressing the
unilateral interpretation of Linggadjati Agreement by the
Netherlands. Sen then referred to telegrams from the Indonesian
Government urging the withdrawal of Netherlands forces to the
October demarcation lines and the appointment of an international
commission of arbitration. [2] He suggested that the Council
should take action to meet these requests.

4. Van Kleffens made a general statement attempting to justify the
Netherlands action since the passage of the Council resolution, in
particular, the occupation of Madura, which he claimed was
essential to save the population from starvation (see also our 736
[3]).

5. We then analysed the situation stressing the lack of
stabilising factors which were present when the truce of October
1946 was negotiated (your 437 [4] paragraph 3) and the danger that
the situation might deteriorate if action was not taken quickly to
reopen negotiations. We drew attention to charges and counter-
charges which had already been made and which might have been
avoided if our proposal for the despatch of an observer by the
Secretariat had been adopted. We suggested that the Council should
either instruct the Secretary-General to send an official or might
send out a small commission to observe the implementation of cease
fire orders.

We pointed out however that this was a short range plan only and
that it was even more important that steps should be taken as soon
as possible to ensure that the second part of the Council's
resolution was implemented. We stressed the fact that good offices
or even mediation was insufficient and that Australia had
understood the resolution to call for arbitration. The only offer
which had hitherto been made was by the United States for
mediation and that the Indonesian Government had asked for
arbitration by more than one power. At this point we drew
attention of the Council to the offer of joint mediation and
arbitration, quoting from the Prime Minister's statement. [5]
Finally we indicated that at the next meeting of the Council
(probably Tuesday) we would submit a resolution to give effect to
our proposals.

6. Today's action will enable us to continue initiative when
Council resumes. What we have in mind is resolution noting and
approving United States and the Australian offers and possibly
appointing a small commission which could observe and report to
the Council. Such a commission might enable the Indonesians who
are committed to larger body to accept joint United States-
Australian arbitration without loss of face. If you approve we
will work along these lines over the weekend and will try to
persuade Sjahrir who is expected in New York tomorrow to accept
them on behalf of the Indonesian Government.