Reference Australian suggestion American-Australian arbitration.
 Dr. Oesman, Indonesian representative in Australia, has made public statement  saying that he considers his Government could accept proposition, especially if third party were included. He gives the interesting explanation that arbitration by three parties would be understood by Indonesians, as this is common Dutch practice. Arbitration by one is foreign to them and. by two raises the question as to what happens if there is lack of agreement between the two. There is some merit in suggesting a third party. Understand from Oesman that the United Kingdom would probably be an acceptable third party, and we assume also that the Dutch would find United Kingdom acceptable. Perhaps it would be possible for counter suggestion to be put forward by Dutch of a third party, for example, the United Kingdom. To be successful such a proposal would have to be agreed upon before Security Council meeting, Council being merely informed of agreed means of carrying out its previous decision.
2. India, Philippines, and others will claim a right, but clearly the three parties ught to be members of the Security Council.
Moreover, if means of arbitration is greed matter is not for Council to discuss.
3. Should be glad of early advice as to United Kingdom reaction to proposal. We earned only the other day that the United States offer  had been made without the knowledge of the United Kingdom Government, and we had previously assumed the United Kingdom Government did not desire to be associated with the offer following upon their attitude at the Security Council. Our proposal for American-Australian arbitration was based on that assumption.