Security 454. INDONESIA.

Your 485. [1]

1. At outset of todays debate U.S.S.R. used 1 1/2 hours including
interpretations, condemning Netherlands action, questioning U.S.

motives in 'forcing' good offices on Indonesians, and calling for
mediation and arbitration by Commission of Council Members.

Gromyko claimed that Dutch refusal to accept jurisdiction of
Council had been encouraged by failure of Council to accept Soviet
proposal for immediate withdrawal of Netherlands Forces from
Indonesia.

2. China then formally submitted amendments [2] (our 763 [3] text
in our immediately following telegram [4]). Tsiang quoted
Netherlands statement of August 11th [5] announcing intention of
Netherlands Government to carry out the 'purpose embodied in the
Linggadjati Agreement' i.e. to transform East Indies into 'A new
Indonesia, a sovereign, democratic and Federal State-Independent
Member of the United Nations'.

From this he agreed that the two parties were 'not far apart so
far as the future is concerned'. Provided the Council had the
right to receive its reports, the Consular body proposed by the
Netherlands [6] could keep the Council informed. A Commission of
Three, set up in the manner proposed by the Netherlands [7] could
'investigate and make recommendations helpful towards a solution'.

The Netherlands proposals were therefore 'steps in the right
direction' provided the Council received reports from the proposed
bodies and reserved the right to devise other means of settlement
in case a solution should be long delayed.

3. United States supported the Chinese amendments.

4. We expressed great surprise at fact China which had originally
lauded our resolution was now presenting amendments directly
contrary in principle. We pointed out that Chinese proposals
confused immediate and long range objectives and were a step back
from Council Resolution of 1st August. In view of the urgency we
agreed that Commission of Observers should consist of Career
Consuls in Batavia, i.e. (U.S., U.K., France, China and Australia)
but they must report to and be responsible to the Council. With
regard to long term settlement we were in general agreement with
Polish proposal for Commission of Three [8] and were on the point
of introducing a similar one ourselves. We recalled the fact that
good offices and even brilliant mediation by Killearn had been
insufficient, that both Netherlands and Indonesia had agreed to
arbitration as a method (Linggadjati Agreement). Indonesians had
asked unwillingly [9] for arbitration as recently as July 19 [10]
and wanted arbitration now. We could see no reason why proposal
for Council Commission should be unacceptable to Dutch. We were
prepared to agree to selection of one Arbitrator by each of
parties but third Commissioner should be selected by Security
Council.

5. Sjahrir stated that the Republic based its hopes on action by
the Security Council and placed no reliance on direct negotiations
with Netherlands, even if begun under good offices of some country
as United States. He concluded 'we stand firm by the requests made
in my previous statement' (our 760 [11]).

6. Change in Chinese attitude has further complicated position.

United States are of course actively opposing Council appointment
of arbitrators. They also prefer action outside Council to
supervise the cease fire order, but I have an assurance by Johnson
that if Chinese amendments are defeated they will support our
resolution. We shall support Polish amendment, with modifications
suggested in your 485 and will endeavour to bring all resolutions
to vote at next meeting on Friday morning.