123 Proud to Department of External Affairs
Cablegram 17 BATAVIA, 11 March 1946, 1.20 p.m.
MOST IMMEDIATE SECRET
I saw Clark Kerr this morning. He talked with Sjahrir yesterday and the latter produced the Indonesian counter proposals. He asked Clark Kerr's advice on these and as a result of their discussion certain amendments were made.
The proposals open with the recognition of the Indonesian Republic but with that exception seem to hold some promise. They include for instance joint responsibility for defence and foreign policy and union of the Netherlands Indonesian States.
These proposals have not yet been conveyed to the Dutch and are to be regarded as top secret. Sjahrir has asked for the first meeting to be held to-morrow and will convey the proposals to Van Mook before the meeting takes place.
At the moment considerable attention is being paid to finding a way around recognition and treaty clauses. The French treaty with Annam  has aroused considerable interest in Indonesian circles and it is regarded as a precedent.
The new Cabinet has been approved but not published by Soekarno and eleven out of the sixteen members were in the old Cabinet. It includes one woman Santosa (Social Affairs) and only two members Mohammad Roem (Supply) and Wikana (Minister of State) are regarded as 'bad hats'. They are so bad that they are frightened to come to Batavia and it is therefore unlikely that they can affect negotiations.
Van Der Post informed me that he spoke very strongly to Soekarno whose influence he considers is waning. When he left, Soekarno had tears streaming down his cheeks but promised to support Sjahrir.
The temperamental reading here to-day is 'restrained optimism'.