My Minister [1] has asked me to pass informally to the Ambassador
[2] certain information [3] which has come to us from a Dutch
source in Singapore concerning the present position in Indonesia.

I should be glad, if you should send this message forward for the
information of your Government, if a request could be made that
the source, that is Singapore, be not revealed.

Our reports indicate that the Dutch Army officers are endeavouring
at the moment to engineer a crisis in Indonesia. They profess
alarm at the skilful infiltration of their areas recently by
T.N.I. forces. To meet the situation, the Dutch Army Command is
believed to have already recommended to the Crown Representative,
Lovink, that a third police action must be envisaged, that is
prepared for, or that the Dutch should immediately retire to
prepare consolidated positions, presumably to resist any further
T.N.I. infiltration.

It is understood also the Dutch Army morale is low, and the Dutch
Army Command is concerned at the result of having such large
numbers of men virtually unoccupied.

The Head of the Dutch Military Intelligence Organisation, Somer,
apparently is strenuously opposing Lovink's policy, which he
regards as pro-Indonesian. These elements at Batavia have, it is
understood, deliberately sent messages to The Hague during The
Hague talks indicating further T.N.I. infiltration and raids in an
attempt to bring about the failure of The Hague deliberations,
which, if successful, they would regard as being fatal to Dutch
interests.

Independently, we have received fairly full accounts of The Hague
discussions. They apparently got off to a good start, and
Critchley's reports were quite encouraging. During the last few
days, however, it has been made clear that no progress has been
made and that serious problems are being faced. If at any time you
are in the Department, McIntyre would be glad to give you further
details.

One of the causes of difficulty is the question of New Guinea.

While we are not in a position to suggest it, the obvious move the
Dutch should make is to place New Guinea under trusteeship under
their own administration. However, this is only one of the many
matters at present causing difficulty.

No doubt your Government has its own reports both on the
development of The Hague talks and on the situation in Indonesia.

I am directed to forward you informally this information, because
we are inclined to believe that such moves are being made on our
general knowledge of the persons concerned, but it is only the
United States Government which at this stage can make any
constructive intervention direct with The Hague authorities.