Reference my K.102.
The Dutch are greatly exaggerating Monday night's incident at Djocjacarta railway station and the press is unleashing an hysterical campaign against the Republic. Latest reports are that the N.E.I. Provisional Federal Government met this morning with Abdulkadir, who left Djocjacarta for Batavia yesterday. Also present were various prominent authorities of several states of Indonesia. After hearing his verbal report on the incident the Government is reported to have decided that the Republicans' apologies were not sufficient; that discussions therefore could not continue in Kaliurang as matters stood at present and further instructions would soon be sent to the Netherlands delegation.
2. The Good Offices Committee has unanimously agreed that the members will report to their respective governments their opinion that the Netherlands are exaggerating the importance of the alleged incident, that the apologies offered by the Republic appear to be adequate and that there is no justification for breaking off the talks in Djocjacarta. if the Netherlands persist in their present attitude and recall their delegation, the Committee members will ask their governments for instructions.
Although not yet formally agreed to, a report to the Security Council would also be inevitable. The Committee's proposed stand will be passed informally to Van Vredenburch this evening in the hope that this will prevent a breakdown in the talks.
3. If the present stalemate continues, I shall endeavour to have the Committee issue a press statement which will express its view that the delay in continuing the talks is unwarranted. if the Netherlands go further and recall their delegation to Batavia, Dubois has already agreed to a press statement to the effect that the Committee learns with surprise of the Netherlands decision;
that it will remain for the present at Kaliurang and reserve its decision regarding its future action and movements.
4. The Good Offices Committee today approved a report on political develop-ments in Western Java which incorporates all the important points of our original draft.  I agreed to refrain from submitting a minority report on the economic blockade of Bantam on the basis of a formal agreement with the other members that:
(a) the GOC will press for an early reopening of trade and communications with Republican controlled areas as envisaged the truce agreement and will recommend that a special sub-committee task of the Ecomomic and Financial Committee be appointed with the specific task of implementing this. Dubois has agreed to let me draft a statement which he as chairman would make at the next meeting of the Economic and Financial Committee.
(b) the Committee will begin immediately the preparation of a report to the Security Council in terms of the Canadian Security Council Resolution  and that this report will include a section on the difficulties in reopening trade and communications together with statement of what the Committee is doing.
(c) the Committee will make immediate and specific efforts to reopen trade with Bantam, using the report of the Committee's military observers and that in particular it will press for permission for the Republic to remove sugar from Republican Central Java to Bantam.
(d) if within a reasonable time trade with Bantam is not reopened the Committee will report this in its next report to the Security Council on political developments in Western Java.