A member of my staff yesterday had an informal conversation with Lacy, Director of the State Department Office of South East Asian Affairs on the situation in that area. Following is a summary of Lacy's comments:
(c) Talking generally of the Security Pact between Australia, the United States and New Zealand, Lacy remarked that the inclusion of Indonesia at a later stage in a broader pact might be the ultimate solution to the problem of Dutch New Guinea. If Indonesia and Australia were linked in a defence agreement, there would be no necessity for the Indonesians to press for possession of Dutch New Guinea and some satisfactory arrangement might be arrived at. Meanwhile he thought that the question of Dutch New Guinea should be permitted to lie quiet and suggested that Australia should not become too aroused if at times Indonesian spokesmen for domestic reasons adverted to the question of Dutch New Guinea.