49 Ballard to Department of External Affairs

Cablegram 123 BATAVIA, 9 May 1947, 1.30 p.m. Received 9 May 1947,

SECRET

Carne, Hetherington have discussed with Van Hoogstraten proposals in my telegram 113. [1] He stated that the Indonesians made three conditions for the lifting of the ban on Dutch shipping-namely:-

1. The Indonesians to have satisfactory share of Dutch-owned goods in Australia.

2. This share to be purchased by the Indonesians themselves.

3. The removal of the blockade of Indonesian ports imposed by regulations of January 28th. [2]

Van Hoogstraten had accepted one and two but is adamant against three. (Please note that this version of conditions differs slightly from Gani's, vide my telegram 113.) 2. Gani appears to cling to the boycott as a weapon in economic discussions but it is clear from Van Hoogstraten's attitude that it is quite unrealistic to think that the Dutch would remove the blockade which is designed to protect their vast interests in this area solely in order to reopen trade with Australia. Van Hoogstraten's position concerning the Dutch-owned goods held up in Australia is that they are relatively unimportant. He said that Carne could tell Gani that he is seriously considering selling the goods if the Indonesians do not get the ban on Dutch shipping in Australia lifted within about a month.

3. Suggestion for the exchange of manifests as means of preserving rights in cargoes exported (paragraph 6 of my telegram no.113) was raised with Van Hoogstraten. He did not make any observation but Carne's impression was that he was likely to think it over. In any case he did not reject the idea.

1 Document 46.

2 See Document 20, note 3.

[AA:A1838/278, 401/1/3/2, ii]