1. Forsyth saw Morgan in order to follow up State Department
undertaking that we would be kept informed of developments in
Indonesia. [1] Morgan was not aware that Foote had returned to
Batavia and said that official report on Foote's visit to
Djokjakarta [2] had not yet been received.

2. Morgan said that the object of Foote's visit had been to
explain to the Indonesian leaders that the United States was
offering 'good offices' and not at this stage at any rate
mediation, i.e. the United States was willing to bring the parties
together [but] in offering 'good offices' was not undertaking to
preside over the process of settlement.

3. Forsyth mentioned that the Indonesian Government had accepted
Australia's offer to join in a joint mediation with the United
States. In the discussion to which this gave rise he gathered the
following based in part on a call by Van Kleffens at State
Department at noon today.

(a) The Dutch emphatically do not accept the suggestion that the
Security Council appoint a commission of supervision.

(b) The Dutch Government had instructed Van Kleffens to propose to
the United States and to the Security Council tomorrow, that they
themselves voluntarily invite some neutral Governments to
supervise the 'cease fire'.

(c) The State Department officials concerned thereupon suggested
to Van Kleffens that it would be more acceptable if the
Indonesians could be persuaded to join with the Dutch in such a
proposal.

(d) Van Kleffens is telegraphing this suggestion to The Hague but
may not receive revised instructions before the meeting of the
Security Council tomorrow.

4. Morgan thinks that the United States would regard the Dutch
suggestion above as constituting a sufficient 'next step'. The
offer of 'good offices' would remain in effect but United States
would take no positive step toward mediation or arbitration in the
meanwhile.

5. Reference our telegram 1057 [3] Morgan said that press report
that the United States was prepared to mediate was not at all his
understanding of what General Marshall had said. It was definitely
not United States policy to mediate at any rate at this stage.

6. Forsyth asked whether Morgan thought the 'cease fire' would
ever have happened if the Security Council had not taken the
initiative. Morgan replied that the 'cease fire' could have been
brought about by other means, explaining that he meant by
diplomatic action.

7. This last point was made in the course of a brief general
discussion of the situation in the course of which Morgan also
took pains to stress the serious implications of Security Council
intervention in disputes which might be held to be not between
states but between one part of a state and another part,
especially at early stage in the development of the United
Nations.

United Nations Delegation has been informed.