Indonesia. My telegram 676. 
1. Security Council discussion on 29th July  opened with statement by Palar on economic report from the Committee of Good Offices.  Palar also gave an explanation of the Republican decision not to join for the time being in further negotiations in Batavia. He said that the decision was understandable in that there had been no sign of progress in negotiations in more than two months and that negotiations would be resumed when the Dutch had received new instructions permitting a reasonable basis for further discussion. Van Kleffens in reply said that the Indonesian action seemed to lack any basis. Negotiations were admittedly at a standstill pending the formation of a new Dutch Government and the arrival of the new American member of the Committee, but as stated  the Cabinet was formed at The Hague and the American member had had time to make his contacts with the Netherlands Government and the Republican Government  the work of the Committee could at once be resumed. He gave no indication however of any change in the Netherlands attitude.
2. The ensuing discussion dealt mainly with the Chinese resolution  which was introduced at an early stage. The economic report was not commented on at length but private indications suggest that it has made an impression on most members who think that it exposes pretty clearly the deliberate intention of the Dutch to weaken the Republican pos[ition].
3. The Chinese resolution had been discussed with India, Palar and ourselves. In the circumstances the passage of the resolution is more significant than its actual wording would seem to denote. The Council is not yet ready for any positive step which would put pressure specifically on the Dutch, especially in view of that inevitable present standstill in negotiations, but the trend of opinion against Dutch tactics which has been gradually taking form was definitely marked yesterday and was implied in the very easy acceptance of the resolution. Palar recognises that nothing more could have been expected from the Council at the present and is therefore satisfied with the resolution so far as it goes. India and ourselves agree with this. The resolution means that the Council has reasserted its active interest in seeing the conclusion of a proper settlement and both the British and Americans here think that the Dutch will find it hard in the face of this to prolong the deliberate evasions and delays which both recognise have taken place. The Americans say that they are content to let matters alone now until say mid-September. If by that time the Dutch have shown no sign of wanting to make real progress at Batavia on the basis of Renville further action will have to be considered. This is now broadly the attitude of the United Kingdom Delegation although they say that the present Foreign Office view is unknown to them.
4. In a short talk I had with Van Kleffens after the meeting he said that he found the resolution acceptable and assured me with apparent sincerity that the Dutch were now determined to make a real effort to get a settlement.