60 Ballard to Department of External Affairs

Cablegram 141 BATAVIA, 18 May 1947, 10.40 a.m.

MOST IMMEDIATE MOST SECRET

Further to my telegram 140. [1] We saw Sjahrir on Saturday night.

He expressed surprise when we informed him of Van Hoogstraten's new attitude, which he had not known, although he and Gani had spent the whole morning in conference on general economic problems with Van Mook and Van Hoogstraten. He mentioned, however, that Van Hoogstraten had said, in fact, they should not bother with the 'trifling' matter of the ban and Van Mook had not dissented.

2. We raised the matter of Campbell's statement. He firmly believed that this must be a distorted report and said that he would try to obtain accurate information. He does not believe that the new instructions to Van Hoogstraten resulted from anything Campbell may have said but that something else lies behind them.

3. He also confirmed that he had enjoined both Campbell and Roach and Healy to avoid statements likely to prejudice our efforts to bring about cessation of the ban. He had also spoken to the same effect to SOBSI before the Conference. He had gathered the same impression as we had as to the attitude of Roach and Healy.

4. Clarification of the situation must await further reports from Malang.

5. With reference to paragraph one above, we ascertained, in the course of our talk, that the Indonesians want the Dutch forces reduced before concluding an agreement on general economic problems. They feel that in making such an agreement at present they would be doing so under threat of force. According to Sjahrir the Dutch insist on securing their economic objectives first.

1 Document 59.

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