65 Ballard to Department of External Affairs

Cablegram 151 BATAVIA, 23 May 1947, 1.55 p.m.

IMMEDIATE SECRET

We saw Gani yesterday and Van Hoogstraten this morning. The position is that agreement has been reached between them on the Dutch draft covering both the message and conditions (referred to as (A) and (B) in my telegram 148 [1]). Gani's English translation however differs from the Dutch text in one particular. This may be disposed of today.

2. The question of procedure is now in hand. As the message (A) is intergovernmental we agree with the Dutch view that it is a matter for Dutch and Indonesian Foreign offices here, while (B) conditions should be signed for implementing departments i.e. by Van Hoogstraten and Gani or of representatives.

3. Van Hoogstraten says that Gani at present wishes to sign both but if this is so we would hope to persuade him to agree to the above procedure. [2]

4. The method of transmission of joint message will be discussed by both parties.

We expect to secure that it will be formally lodged with Ballard as Consul-General. We have throughout insisted with both sides that the Australian Government must receive message before publication and each has concurred to this.

5. Your telegram 124. [3] Van Hoogstraten stated explicitly that concrete steps towards implementation are already in progress and will be carried on. For example agreement has been reached on exchange of a definite quantity of the textiles now in Australia against 70,000 tons of rice from the Republic. This has not yet been finalised pending the outcome of talks as above; moreover the Republican authorities concerned have not yet provided detailed figures of rice available. This however will not delay the conclusion of (A) and (B). Van Hoogstraten repeated that the working out of details is a complicated task which will take some time since it involves not only the allocation of commodity by commodity, but also the price, item by item. Incidentally he affirmed trucks will be allotted the Republic.

6. Reference to first paragraph above and my telegram 148. It seems Schuurman [and] Boon may not have understood the positions correctly as regards (B) conditions. Van Hoogstraten's account of the position to us this morning suggests prospects are more favourable than we gather from talks with Schuurman and Boon.

7. We expect report.

1 Document 64.

2 Gani subsequently accepted the Dutch view. The text of the agreement signed by Gani and Van Hoogstraten on 24 May is given in Appendix II.

3 Dispatched on 22 May, it informed Ballard that paragraph 6 of Document 64 was interpreted to mean that, in the event of failure to reach agreement on the distribution of goods shipped from Australia, the Indonesians might hold up shipments by making a request to Australian waterside workers. Consequently it was feared that the proposed joint message could fail to achieve an early resumption of trade if there were any delay in reaching agreement on distribution and Ballard was instructed to seek an assurance that the Dutch authorities would see their way clear to conclude an agreement as soon as possible.

[AA:A1838/283, 401/1/3/2, iii]