I have the honour to give hereunder a survey of happenings in Indonesia during the month of January.
2. NEGOTIATIONS. The Commission-General returned to Batavia on the 9th of January and although they issued no statement, their return and the prospect of an early invitation to the Indonesians to sign the Agreement eased the tension remaining after General Soedirman's speech.  Dr. Posthuma, the banker and economist, who has been added to the Commission-General, arrived during the month, but I understand that he has not yet attended any of the joint discussions; possibly the arrival of Dr. de Kat Angelino is awaited before the enlarged Commission-General meets the Indonesian Delegation. Dr. Posthuma's economic knowledge should be of great value in settling the arrangements for economic relations and co-operation with the Republic which will become necessary immediately after the Agreement is signed.
3. The two Delegations made contact on January 12th, when future procedure was discussed. Then the Indonesian Delegation left Batavia for a Cabinet meeting at Djokjakarta. A communique issued after this meeting stated that Cabinet had decided that the Delegation 'shall remain entitled to sign the Agreement of Linggardjati exclusively based on the clauses mentioned in that document as it was initialled on the 15th of December 1946, including elucidations, minutes, and official correspondence with the Dutch Delegation, and not tied down to whatever discussions and explanations took place at home and abroad beyond the official contact between both Delegations'. Before signing, and before submitting the matter to the K.N.I.P. , however, the Delegation was to discuss disputed matters. This communique was not felt to introduce any further complications into the situation. The Indonesians, while objecting generally to the spirit of Mr.
Jonkman's speeches  and more particularly his references therein to the Crown and New Guinea, have little objections to the explanatory memorandum of the Commission-General itself.
4. The two Delegations held a series of meetings beginning on January 22nd, which were followed by a communique stating that agreement was reached on the military measures needed to improve the situation. Demarcation lines are now to be fixed by the central military authorities, and not the local commanders. The next series of meetings began on 28th January, and the month ends without the Agreement having been signed. I am told that the Indonesians made a formal offer to sign, but that the Commission- General insisted on the express acceptance of the Jonkman speeches and the prior issue of a cease-fire order.
5. I understand that the procedure adopted in establishing the State of East Indonesia without consultation with the Republic has also been discussed. In this connection it is interesting to note that the Pontianak Conference  has again been postponed to a date not yet determined.
6. The month has indeed been a month of public debate.
Recriminations and mutual charges of breaches of the truce have been consistently made by highly placed spokesmen on both sides, and with considerable bitterness. Some reflections on the truce itself therefore seem appropriate. Looking back, it is apparent that the relation between the conclusion of the truce and the conclusion of the political agreement was that of a vicious circle-a truce had little chance of being effectively observed and of being a positive influence for good so long as a political agreement has not been reached, and equally truly there was little chance of making a political agreement, dependent for its success on the goodwill of both parties, until the fighting had stopped.
Whether the truce or the agreement were tackled first, then, neither had much chance of being successful until the other was also accomplished, and no matter which problem was dealt with first some criticism would have been valid. Largely owing to Lord Killearn's influence the truce was given priority, and the existence of the truce based on stabilization of the military positions existing at 14th October 1946 received a very great deal of publicity. The numerous conferences at all levels both in Batavia and on the various perimeters, having for their object the determination of the respective military positions, will be recalled, but the fact is that the existence of a truce has been far more theoretical than real. Consequently, as virtually every military operation by either side, however small, has been able to be classified by the other as a breach of the truce, the impression arises that the military situation has been steadily deteriorating. I think it is true to say that with the exception of an incident at Krian, to be discussed more fully later, unrest around the perimeters has been no greater than existed last month.
7. Dutch military communiques report such incidents daily and invariably specify that they take place within the Dutch perimeter-Indonesian patrols and infiltrations within the perimeter have been dislodged, and the like. They went very far, however, on January 16th when they claimed that at Tjiandjoer they raided a Headquarters of the Laskar Rakjat (People's Army) within the perimeter.
8. The battle of words was started at a meeting at Djokjakarta of representatives of seven fighting organizations on January 7th, at which Dr. Amir Sjarifoeddin accused the Dutch of provoking the Indonesian forces and of continuing propaganda designed to prove that the Indonesians had violated the truce. General Soedirman added that patience had its limit and urged the continuation of the struggle. These speeches provoked a sharp reaction from the Dutch administration and press. The Army information Service denied any connection between the attitude imputed to military circles and any feeling against the Agreement among the Dutch, on the ground that as Dr. van Mook is Commander-in-Chief such opposition is quite impossible. An official government communique denied breaches of the truce and added that a complete statement was being prepared which would show how completely in the wrong the Indonesians were. This statement was in fact issued on 15th of January and alleged a total of 350 serious cases of violation of the truce by Republican fighting organizations. It went on to add that 'it has undeniably been established that plans had been made for large scale attacks on Semarang, Buitenzorg and Palembang and only timely actions by the Dutch troops could prevent them from being carried out'.
9. On January 12th the Indonesian Minister for information, Dr.
Natsir, accused high Dutch service authorities in Holland of making speeches 'torpedoing the spirit of Linggardjati' and said that General Soedirman's speech was a natural reaction to this.
Dr. van de Velde, the Dutch adviser on Sumatran affairs, replied that whatever mistakes had been made by the Dutch, they did not give General Soedirman the right to make statements which could be construed as a signal for general attack. Other Dutch spokesmen joined in the battle and denied Republican statements that the deterioration of the military situation was due to Dutch aggression, quoting captured Republican telegrams and military reports. And so the unedifying exchange proceeded.
10. The general complaint of the Indonesians is that negotiations to fix demarcation lines always result, under pressure, to the advantage of the Dutch, and they appear genuinely to have the feeling that Dutch military policy is indeed to gradually extend their territory on all perimeters. The regularity with which Dutch communiques point out how justified they have been in every action they have taken, may well cover a bad conscience.
11. The occupation of Krian, which is an important road junction, and Sidoardjo was an incident which the Dutch considered sufficiently serious to warrant a visit by Dr. van Mook and the Dutch Chief-of-Staff to Sourabaya. The official Dutch communique is very confused, and claims that to counteract the fire on their posts in the Sourabaya area, Professor Schermerhorn on 18th January sent an ultimatum to Sutan Sjahrir that counter measures would be taken unless the shelling ceased by 25th January.
Apparently this demand became known at Sourabaya only on 22nd January. Meanwhile steps had been taken by Dutch troops which were countermanded, when the ultimatum became known. The Republican forces, having learned of the Dutch counter measures began to evacuate Krian, but first using artillery fire on 23rd January.
Soon after this a Dutch reconnaissance party was sent out and 'as both Krian and Sidoardjo were evacuated it was decided that these towns should be occupied'. Even the Dutch press inquired why in these circumstances the visit of the Lieutenant Governor-General was necessary. The affair naturally caused the greatest resentment in Republican circles and they have protested to the Commission- General. Dr. Sjarifoeddin, the Minister of Defence, stated that Dr. van Mook and the Dutch Chief-of-Staff had admitted that the Dutch had gone beyond the demarcation line which they themselves had proposed, and said that the Commission-General had declared that all places outside the demarcation line would be returned to the Indonesians. He urged the Indonesians to adhere [to] their policy of concentrating on a political settlement and not distracting world attention by military incidents. The relation of this incident and the continuing resentment over the Buitenzorg incident to the present stage of the negotiations is apparent.
12. REPUBLICAN POLITICS. The meeting of the K.N.I.P. has not yet taken place, having been postponed for various reasons, including the inability of the members from Sumatra to arrive by the time first set. On 17th January the Working Committee of the K.N.I.P.
which was attended by 18 of its 25 members passed a resolution demanding the revocation of the President's decree expanding the K.N.I.P. The decree itself came as a surprise to Sutan Sjahrir, and there has been some discussion of what the President's constitutional powers are and whether the decree is formally valid; moreover, inexperience and the limited extent to which the constitution has been put into effect tend to make the handling of this kind of matter confused; however, the previous optimism that the K.N.I.P. will accept the Agreement has not been diminished.
13. On his return to Batavia after the Cabinet meeting, Sutan Sjahrir said that the budget for 1947 had been discussed. Sumatra would not be included, as too little information was available.
Limitation of the armed forces and retrenchment of subsidiary forces was contemplated, with the object of confining military expenditure to 30%. The remaining 70% would go to education and public works, with great stress on irrigation projects. He added that elections had taken place in 3 districts and it was hoped to hold general elections before the end of the year.
14. EAST INDONESIA. Mr. Soekawati, the Head of the State, accompanied by some of his Ministers, has made an extensive tour of the Negara and has now gone to Holland, intending to return to Makassar late in February. Mr. Soekawati said that his main impressions after his tour were of the tremendous destruction which had occurred in many areas, of the need for the widest possible spreading of information about the new constitutional structure which is little understood, and of the need to induce the population to abandon its present attitude of unwillingness to work. The Cabinet met on January 24th and decided that all official publications relating to East Indonesia should be put out by the N.E.I. Government information Service. The Republican newspaper 'Merdeka' has been banned, and it has been found necessary to drop pamphlets containing a seventy-two-hour ultimatum to put an end to the destructions of bridges and constructions of road blocks. Instruction is being given by the N.E.I. Government to the establishment of a new Government Commissariat for East Indonesia to expedite the transfer of authority from the Central Government to the new State.
15. On 6th January the Supreme Council of Bali discussed the reorganization of the Supreme Council and the Lower Council. The former is to consist of 34 elected and 6 nominated members, and the latter of two-thirds elected and one-third nominated. By a decree dated January 18th [the] Lombok Section of the Bali and Lombok area was made autonomous.