Your 225. 
I asked McNeil why Australia had not been included with the United States in the proposal to mediate between the Netherlands Government and the Indonesian Republic, particularly in view of our recent successful contacts with both parties. His explanation was that the United Kingdom Government had been approached informally by the Netherlands who are anxious to secure American funds for reconstruction purposes. The Netherlands wanted, therefore, not only to see increased United States interest in settlement in Indonesia but also wanted to show that they were adopting reasonable attitude towards the Indonesians. Addison added that Cabinet felt it had to take prompt action as the situation in Indonesia was regarded at the time as explosive.
2. Heaton Nicholls said he thought he should make the South African position clear with regard to the consultation. South Africa did not regard it as incumbent upon the United Kingdom Government to consult South Africa. If South Africa were to demand consultation on international issues she would automatically assume responsibility for their solution. I replied that we all knew that each Dominion had different views on the subject of consultation but so far as Australia was concerned there were some things in which we did look for close consultation and one of these was the solution of the current situation in Indonesia. I took the opportunity of sketching briefly the Australian suggestions over the last few years for better methods of effecting proper consultation within the British Commonwealth.
McNeil said that he apologised for the 'impolite' manner in which this matter had been handled and Machtig said he wanted to examine the whole subject carefully before making further statement.
McNeil ended the discussion by saying that the latest reports showed that the situation in Indonesia had eased [a] little as Sjahrir had indicated he appreciated the unsatisfactory nature of the discussions held so far and Queen Wilhelmina had urged the Dutch Army to exercise restraint.