Action on your telegram 154  was delayed owing to my absence at Sourabaya meeting Mr. Calwell. 
2. Since my return, I have discussed developments in the meantime with the United Kingdom Consul-General and have seen numerous telegrams he has received from S.O.S. 
3. Sjahrir followed up a broadcast  immediately by a letter on 20th June to the Commission-General officially conveying agreement to early establishment of interim Government and agreement to the Dutch proposals on the position of the Crown Representative and pointed out the necessity for early consultation with East Indonesia and Borneo and early establishment of Federal organs.
4. This letter crossed a detailed reply by the Commission-General which closely and argumentatively examined the Republic reply of 7th June  which it ended by rejecting. However, Schermerhom on 21st June replied to Sjahries letter which he acknowledged to be an endeavour to bridge the gap and asked for clarification of the Republic's attitude to the composition of the federal organs and the respective roles of interim Government and the two delegations.
5. The text of this correspondence was sent by air mail yesterday (my letter PL26).
6. Republicans have now delivered the reply asked for and it is of a reasonable and positive nature.
7. MOST SECRET: It is reliably believed that instructions have been received by the Palace from The Hague to refrain from further recriminations and to make a serious attempt to reach a compromise. This is indeed borne out by the tone and continuity of correspondence now being exchanged and improvement in situation here.
8. You will no doubt know by now the news received here yesterday that the Dutch Government has told the United Kingdom Ambassador that his offer of good offices was no longer felt to be necessary, also you will be aware of the American attitude. 
9. For the above reasons I feel that to prosecute action now according to your telegram 154 would be chasing events and not anticipating them and that you should have the opportunity of bringing your instructions up to the minute. Should you desire to have any communication made to the Dutch side you will no doubt consider desirable having a parallel communication made at The Hague.