Your 225. [1]

INDONESIA

I asked McNeil why Australia had not been included with the United
States in the proposal to mediate between the Netherlands
Government and the Indonesian Republic, particularly in view of
our recent successful contacts with both parties. His explanation
was that the United Kingdom Government had been approached
informally by the Netherlands who are anxious to secure American
funds for reconstruction purposes. The Netherlands wanted,
therefore, not only to see increased United States interest in
settlement in Indonesia but also wanted to show that they were
adopting reasonable attitude towards the Indonesians. Addison
added that Cabinet felt it had to take prompt action as the
situation in Indonesia was regarded at the time as explosive.

2. Heaton Nicholls said he thought he should make the South
African position clear with regard to the consultation. South
Africa did not regard it as incumbent upon the United Kingdom
Government to consult South Africa. If South Africa were to demand
consultation on international issues she would automatically
assume responsibility for their solution. I replied that we all
knew that each Dominion had different views on the subject of
consultation but so far as Australia was concerned there were some
things in which we did look for close consultation and one of
these was the solution of the current situation in Indonesia. I
took the opportunity of sketching briefly the Australian
suggestions over the last few years for better methods of
effecting proper consultation within the British Commonwealth.

McNeil said that he apologised for the 'impolite' manner in which
this matter had been handled and Machtig said he wanted to examine
the whole subject carefully before making further statement.

McNeil ended the discussion by saying that the latest reports
showed that the situation in Indonesia had eased [a] little as
Sjahrir had indicated he appreciated the unsatisfactory nature of
the discussions held so far and Queen Wilhelmina had urged the
Dutch Army to exercise restraint.