INDONESIA

My immediately following telegram [1] comprises latest report from
Critchley on Indonesian situation, which, as will be seen, is
extremely precarious. One of the principal dangers is that of
precipitate Dutch action to intervene with force inside the
Republic on the excuse of suppressing Communists. It is clearly
most important that Dutch should show forbearance and allow Hatta
every chance to crush insurgents in his own way, and with his own
forces. The best course which the Dutch can take is to indicate
prompt and genuine acceptance of American proposals, and to lend
Hatta encouragement along the lines of paragraph 4 of Critchley's
telegram.

2. If they do not sustain Hatta during next vital few weeks, they
will invite chaos and will have missed opportunity of a reasonable
settlement which still offers some prospect of permanence.

Alternative of Dutch military action will lose all.

3. For The Hague only. You should take first opportunity to press
these arguments with The Hague authorities.

For Washington only. We understand that Unites States Government,
in discussions with Stikker, has stood firm against substantial
modifications of United States proposals. This will encourage
United States representatives at Batavia, and you should impress
upon State Department our view that a great deal depends on
continued American firmness.

For London only. Please urge United Kingdom Government to use its
influence in this direction.