WASHINGTON, 3 December 1948

INDONESIA

Interview with Mr. Lacy, State Department, on 3 December 1948
I indicated to Lacy the general purport of telegram No. 975 from
External [1], emphasizing the hope that the United States
Government would apply all possible pressure and warnings to the
Dutch, should they resort to further police action if the present
negotiations break down. Lacy stated that he was still of the
opinion that no police action was likely during negotiations and
also stated, that they had no information whatsoever on the
current talks which were being kept strictly secret. He asked
whether there was any indication from Critchley as to any recent
change in the Dutch Government's attitude. I said that we had not
had any recent report in that regard.

I mentioned that Thamboe had called and that the significant
indications from his conversation were that-
(1) he was inclined to agree that force would not be used until
after failure of negotiations, and
(2) he thought it unrealistic to expect any tangible outside
assistance if the Dutch resorted to force.

Lacy emphasized the fact that the United States Government policy
was not to interfere in the activities of friendly countries, and
particularly, not by the use of any drastic measures.

I mentioned Thamboe's reference to the Burmese offer of rice and
the request for Australian shipping. [2] Lacy had not heard of the
offer, he indicated surprise that the Burmese should be able to
spare rice to make the offer, and said that he thought the main
difficulty in Indonesia was not the shortage of rice but problems
of distribution. He asked what the Australian Government's view
was on the rice question. I informed him that I did not know but
thought that if there was no urgent need for the rice and if it
was only a political gesture, we would probably not take any steps
in the matter.