Security 454. INDONESIA.
Your 485. 
1. At outset of todays debate U.S.S.R. used 1 1/2 hours including interpretations, condemning Netherlands action, questioning U.S.
motives in 'forcing' good offices on Indonesians, and calling for mediation and arbitration by Commission of Council Members.
Gromyko claimed that Dutch refusal to accept jurisdiction of Council had been encouraged by failure of Council to accept Soviet proposal for immediate withdrawal of Netherlands Forces from Indonesia.
2. China then formally submitted amendments  (our 763  text in our immediately following telegram ). Tsiang quoted Netherlands statement of August 11th  announcing intention of Netherlands Government to carry out the 'purpose embodied in the Linggadjati Agreement' i.e. to transform East Indies into 'A new Indonesia, a sovereign, democratic and Federal State-Independent Member of the United Nations'.
From this he agreed that the two parties were 'not far apart so far as the future is concerned'. Provided the Council had the right to receive its reports, the Consular body proposed by the Netherlands  could keep the Council informed. A Commission of Three, set up in the manner proposed by the Netherlands  could 'investigate and make recommendations helpful towards a solution'.
The Netherlands proposals were therefore 'steps in the right direction' provided the Council received reports from the proposed bodies and reserved the right to devise other means of settlement in case a solution should be long delayed.
3. United States supported the Chinese amendments.
4. We expressed great surprise at fact China which had originally lauded our resolution was now presenting amendments directly contrary in principle. We pointed out that Chinese proposals confused immediate and long range objectives and were a step back from Council Resolution of 1st August. In view of the urgency we agreed that Commission of Observers should consist of Career Consuls in Batavia, i.e. (U.S., U.K., France, China and Australia) but they must report to and be responsible to the Council. With regard to long term settlement we were in general agreement with Polish proposal for Commission of Three  and were on the point of introducing a similar one ourselves. We recalled the fact that good offices and even brilliant mediation by Killearn had been insufficient, that both Netherlands and Indonesia had agreed to arbitration as a method (Linggadjati Agreement). Indonesians had asked unwillingly  for arbitration as recently as July 19  and wanted arbitration now. We could see no reason why proposal for Council Commission should be unacceptable to Dutch. We were prepared to agree to selection of one Arbitrator by each of parties but third Commissioner should be selected by Security Council.
5. Sjahrir stated that the Republic based its hopes on action by the Security Council and placed no reliance on direct negotiations with Netherlands, even if begun under good offices of some country as United States. He concluded 'we stand firm by the requests made in my previous statement' (our 760 ).
6. Change in Chinese attitude has further complicated position.
United States are of course actively opposing Council appointment of arbitrators. They also prefer action outside Council to supervise the cease fire order, but I have an assurance by Johnson that if Chinese amendments are defeated they will support our resolution. We shall support Polish amendment, with modifications suggested in your 485 and will endeavour to bring all resolutions to vote at next meeting on Friday morning.