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66. Mr. MacDonald was good enough to give me liberally of his time and we discussed many things together, but I will confine the record to a few points.

67. He was emphatic that it would be very bad for our standing in South- East Asia if we failed to support or to press for the execution of the latest United Nations Resolution on Indonesia. We had established a strong moral position in this part of the world by our action in India, and it would be a tragedy if we forfeited it over Indonesia. Nationalism in Malaya was behind the Government in its action against Chinese Communist disorders. In this, Malaya differed from Indonesia and Indo-China, where the Dutch and the French were drawing the Nationalists and Communists together. It would also, he thought, be a serious blow to our prestige and influence if India entirely left the Commonwealth. In Malaya, neither Chinese nor Indians nor Malays wanted to force the pace of progress towards self-government; but the tempo might be increased by recent developments elsewhere. As regards China, like almost everyone to whom I put the question, he thought that in the long run, though perhaps not in the short run, China would not succumb to communism of the Soviet type..

68. I asked him about Australian policy in South-East Asia and in particular why the Australian Government were taking so passionate and extreme a line about Indonesia. He said, first, that Australians were temperamentally prone to the use of uncompromising language; secondly, that they believe strongly that the British way in India was the right way, and the more strongly so, in that Australia knew what it was to have to make good her own freedom and had a certain fellow feeling; thirdly, that there was an element of compensation for the White Australia Policy "-here was a chance for Australia to show friendship to an Asian people; fourthly, that the Australian Government were sincerely concerned at the prospect of disturbances in South-East Asia which the Dutch action would provoke; fifthly, they expect that a free Indonesia would be a barrier to Chinese southward expansion.

69. For all Australia's interest in this region, however, he did not think Australia was ready or fit to assume defence or other material responsibilities there, and it would be best not to press her too hard to do so. On the other hand, Australia's participation in the Delhi Conference on Indonesia had been a good thing. It had prevented the Conference from being a line-up of Asia against the West, and to that extent had been of advantage to the United Kingdom in South-East Asia. I think there is great force in this observation.

70.

At Kuala Lumpur, Sir Henry Gurney was kind enough to explain to me the various measures he was taking to restore order in Malaya, and I also had a short talk with General Boucher, commanding the military forces, and with the Chief of Police, Colonel Gray. Sir Henry made three points affecting foreign relations. In the first place, the spread of communism in China was making his task more difficult; the local Chinese, who had been brought to a measure of collaboration with the Government and the Government Forces, were now cooling off. Secondly, it would be a serious matter if the Chinese deportees, who now by tacit agreement of the Chinese authorities were allowed to sail to Amoy or Swatow without travel documents, were refused entry into China by the Communists. Thirdly, he referred to Siam and relations between the Malayan authorities and the Embassy at Bangkok. There had been some friction, but from what Sir Henry said and from what I have since heard at Bangkok and elsewhere, the situation is now much improved. Joint Malayan-Siamese operations have been organised against Chinese Communist concentrations, and a good spirit of collaboration between the local authorities on both sides of the frontier now prevails, and misunderstandings between our own authorities have been removed.

71. At Singapore, I was informed of the importance of our retaining long- term influence over Malaya and, in particular, possession of Singapore itself. We have a rôle to play in South-East Asia, which no one else is competent to play, in order to promote collaboration between East and West. In so doing, we should be serving our own advantage by helping to deny South-East Asia to communism, to safeguard valuable supplies of raw material, to safeguard communications with Australia and New Zealand, and to give an impulse to economic recovery.

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72. The first impression on seeing Batavia is to wonder why the Dutch have not made more of it in the 300-odd years they have been there. It cannot bear comparison with Singapore or Hong Kong. I am told that the interior of Java, which I did not see, is more creditable to Dutch enterprise.

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73. His Majesty's Consul-General (Sir F. Shepherd), had arranged inter- views for me with the High Representative of the Netherlands Crown (Dr. Beel) and, at the latter's suggestion, with Indonesian leaders, both Republican and Federalist. I also met sundry Dutch officials and businessmen, members of the British Commercial community, and some of Sir F. Shepherd's foreign colleagues. As a curtain raiser, Sir F. Shepherd's military adviser explained to me, with the aid of a map, the extremely difficult military situation in which the Dutch now find themselves.

74. I talked to Dr. Beel in his office and was also his guest at lunch, when I met some of his chief colleagues, civilian and military. Dr. Beel is not impressive. He is dry, rigid and unimaginative and not the man to put through a great political operation, with the need for which the Dutch are now faced. But he spoke with moderation. An agreement about Indonesia was necessary, but time and patience would be required, and international interference would not help. He did not think that the United Nations Resolution, the text of which he had only just received, could be easily carried out, but he had so far had no instructions from The Hague and could not express himself definitely. He thought the three parties were slowly coming closer together. Certainly he and his Government wanted an early solution, and that solution was the earliest possible establishment of the United States of Indonesia. But law and order must be established first. He had no objection to negotiating with the Republic as such, but this must be on the same basis as with the other constituent parts of Indonesia. He was not certain that the present Republican leaders could deliver the goods, and they were not at all as moderate as Sjahrir.

75. Sir F. Shepherd took occasion to press upon Dr. Beel the acceptance of the United Nations Resolution and I told him what I had heard about Indian views on Indonesia, and drew the parallel of our action in India and its helpful results. Dr. Beel said he was impressed by these arguments, but thought that the Indian parallel was not an exact one. The Indians were much better able to govern themselves than the Indonesians. And in India, no one had arms except the Goverment in Indonesia, as in other parts of South-East Asia, the Allies had supplied arms to the resistance movements and the Japanese had left dumps when they departed.

76. The Republican leaders, headed by Dr. Sjahrir, came to the Consulate- General to meet me. I was struck by the moderation and lack of bitterness with which, on the whole, they spoke. The Indonesian question seems to have engen- dered more passion outside than inside Batavia. At first, Dr. Sjahrir left his colleagues to do the talking, but later he intervened. He opened with the disarming observation that whereas the British and Indians were both great peoples and could do things in a big way, this was not the case with the Dutch and Indonesians, who were both small peoples. Indeed, the Indonesians had picked up some of the faults of the Dutch. All agreed that a settlement must be reached in agreement with the Dutch. But there was a crisis of confidence. Dutch acts did not match Dutch declarations. Dr. Beel was the author of two police actions, and the first Catholic appointee for 300 years. Van Mook, for all his faults, had been better. The important thing was to make sure, beyond a peradventure, that the United States of Indonesia would soon actually be established. The question of the form of the Union could wait. If this main point was clearly established, immediate practical difficulties could be solved. When a Constituent Assembly was called, Indonesians of all shades of opinions could easily come to a common view on the Constitution. The Dutch must deal with the Republican leaders as representatives of the Republican Government and not as individuals; but it was not practical politics to imagine that, in the interim period, the Republic could be restored in its original glory. The Federalists could help if they would come out in favour of this line. Contact among all three parties was now being promoted. Page 406 of 488