INDONESIA

State Department today asked us to explain to you the
circumstances in which the new plan [1] for political settlement
was conveyed by Cochran to the Netherlands and Republican
authorities on 11th September without prior consultation with
Critchley. (We understand similar action is being taken through
the United States Ambassador in Canberra). [2]

2. According to the Department spokesman (Lacy of South East Asian
Division) the United States was convinced that some step had to be
taken immediately to support Hatta otherwise there was danger of
substitution of Communist Government. Cochran was therefore
instructed to submit proposals immediately in Batavia and
Djocjakarta simultaneously. The Netherlands Embassy in Washington
was also requested to advise The Hague so that the Netherlands
authorities in Indonesia could not present distorted picture
condemning proposals before the Netherlands Government could
consider them. We understand copy was given to Critchley.

3. Lacy professed to be hopeful that the new plan will be
acceptable to both parties. He described changes from the
Critchley - Du Bois plan [3], which gave recognition in the
preamble of Netherlands Sovereignty in the interim period, as
'Tinsel' to make the plan more palatable to Netherlands. He
admitted that even the present draft had been difficult to get
through the States-General, but hoped that Netherlands would
accept.

4. The United States are clearly concerned at growing Communist
strength in the
Republic, and Lacy cited with approval the provision in the draft
by which the High Commissioner with the concurrence of the Prime
Minister can assume wide powers in the event of break down of
internal order in any state. He said such power was essential to
support Hatta which could naturally not seek Dutch assistance.

5. Lacy said the United States felt it was preferable on this
occasion that the press should not be informed. So far no
publicity had been given.

6. The United States have not yet received any reaction from
either party. Lacy undertook to advise us of any developments
which might not be known to Critchley.