Department of Foreign Affairs and Trade

We were very interested to learn through Mr. Hood of the
Australian Liaison Office of the private approach which Dr.
Sjahrir had made to you with a view to the placing of the
Indonesian case before U.N.O. [1] Although we understand that you
do not expect an official request from Dr. Sjahrir unless and
until his negotiations with Dr. van Mook should finally break
down, we feel that you may like to have a preliminary expression
of our views on the question of a reference of the Indonesian
issue to U.N.O.
2. Both the Dutch and the Indonesians in their proposals of the
19th May and 17th June retreated from the position reached with
such difficulty in early April [2] and unless they can be brought
to agree to resume negotiations on the basis of the proposals
carried back to The Hague by Dr. van Mook, there would seem to be
no alternative to a steady deterioration in the position with the
probability that the final withdrawal of our forces at the end of
November will be the signal for the outbreak of bitter fighting.
In our view neither party can be confident that hostilities would
secure for them an early and complete victory and both therefore
should recognise that a political settlement reached before we
cease to hold the ring must be in their mutual interest. We have
accordingly just instructed Sir Nevile Bland and Mr. Mackereth to
urge the Dutch and the Indonesians in their own interests to get
to grips in serious negotiation.
3. It is to be feared, however, that in the belief that U.N.O.
will eventually provide them with a satisfactory solution Dr.
Sjahrir and his colleagues may be tempted to make no further
effort to accommodate the Dutch in which case all hopes of a
settlement by direct negotiation may vanish. We hope, therefore,
that at any rate at the present stage you may be prepared to
discourage Dr. Sjahrir from relying upon the Australian
Government's intervention on his behalf.
4. From a long-term point of view we feel that reference of the
dispute to U.N.O. may face us with a sharp division on a basis of
national interest in which other Powers not directly interested
may intervene. There are bound to be recriminations and it is more
than doubtful whether the Security Council would be able to agree
upon a solution satisfactory to both sides. You, as well as we,
would with difficulty be able to avoid a worsening of relations
with either the Dutch or the Indonesians.
5. We should be very grateful to learn your views and hope that we
may take it that the Australian Government will consult with us
before taking any action in the event of their receiving an
official request for their intervention from Dr. Sjahrir.
Meanwhile I suggest that you should authorise us to mention Dr.
Sjahrir's approach at The Hague as this should help us to persuade
the Dutch to take a realistic view of the situation.