Your 4796 INDONESIA. [1]

I discussed the position with the Secretary of State for Dominion
Affairs this morning and emphasised the views contained in your
telegram as well as drawing attention to the Cabinet decisions set
out in my written memorandum to him of Friday last.

He is to provide me with a memorandum on two points viz.,
(A) Reason for the necessity of retaining British Troops until the
end of November, and
(B) Reasons underlying the Admiralty undertaking to supply
ammunition to the Dutch.

In the meantime my general impressions may be useful and this
message will be followed by a precis of the memorandum as soon as
it is received.

The United Kingdom Government is also concerned at the lack of
negotiating enthusiasm on the part of the Dutch although more
recent events lead it to hope that progress will be more speedy
and certain in the next few weeks. It points to the recent
legislation of the Dutch Parliament and the appointment of
Commissioners General to go to Indonesia as some evidence of the
change in tempo and spirit of negotiations. The United Kingdom
instructions to Lord Killearn as set out in telegram D.369 [2]
indicate that [U.K.] Government would regard undue delay or
reversal of the present policy to reach peaceful agreement as
justification for withdrawal of troops as soon as military tasks
are completed. I gather that you had not seen that telegram before
despatch of your message to me.

At the same time Lord Addison says it is doubtful whether troops
could be withdrawn before the end of November in any case apart
from the fact that all prisoners and internees have not yet been
rescued. In effect then, the Secretary of State can be said to
agree with your views on the wisdom of taking all action possible
to influence the Dutch towards hastening a settlement.

The position regarding the supply of British ammunition really
concerns the Admiralty with whom I note the Service authorities
are raising the matter. It is contended, however, that the Dutch
ships are still under British operational control. Some of the
ships were sold by the United Kingdom to Holland and are thus
suitable only for British ammunition. I was assured that all major
repairs were to be done in Holland and as far as practicable minor
repairs in Singapore and that in no sense was Australia to be used
as a base. I got the impression that the Secretary of State was
concerned as to the Admiralty reaction to the Cabinet decision.

He stated that the Admiralty was under pressure to remove stores
and munitions from Australia and that it had undertaken to supply
stores and munitions to ships sold to the Dutch and suggested that
all safeguards were provided by the fact of British Operational
Control.

A further message will follow when the memorandum is received.