Gani and Hoogstraten contacted separately say their talk Monday
was satisfactory. Agreement not yet signed pending conclusions on
details of division of goods, amount of rice to be supplied in
return, and prices. This will take a few days.

2. Joint message to the Australian Government will then follow.

3. Arrangements will be that the whole Indonesian payment in kind
for their share will be made here to the Netherlands East Indies
Government not sent abroad as exports.

4. Possibility of back-loading ships involved with export goods to
Australia has been explored, but Hoogstraten's position is that
exports abroad must wait for agreement in general Dutch-Indonesian
talks concerning foreign trade and foreign exchange. He is hopeful
of early conclusion of these and definitely has Australia in mind
as source of supply and recipient of exports at that stage.

5. We understand that high Indonesian quarters are inclining to
the view that compromise on the Economic and Foreign Relations
aspects of the present general talks following Linggadjati would
be worthwhile if implementation of the provision for the reduction
of Forces would be secured. This may be very difficult and may
prolong impasse.

6. Richardson has had useful talks on the financial position and
possible technical arrangements on which he will report in due
course. All agree there is no point in him postponing the
departure for Singapore arranged for Thursday.

7. Carne left this morning.

8. In view of paragraph 4 above, fairly early establishment of
Australian Trade Commissioner, Batavia, is desirable for
preparatory work and Hoogstraten agrees with this.