We have now reached a crucial stage in the negotiations. The purpose of this letter is to outline briefly the main developments of recent weeks, including my interpretations and to pass on to you copies of two interesting confidential documents. The first is a letter from Hatta to Cochran , the second a memorandum from New York setting out the State Department's views on some Republican objections to the Cochran plan.  Hatta's letter in particular will give you a valuable insight into the present situation.
2. As you know, Cochran has been handling recent negotiations on his own. This is a realistic appraisal of both the importance of State Department policy and the difficulties of obtaining definitive action in a Committee on which the Belgian member works in close co-operation with the Netherlands. The result, however, is to make it difficult at times to keep you fully informed, since the Netherlands have imposed restraints on Cochran concerning the confidential nature of their documents. This explains why it took me some time to obtain a copy of the Netherlands amendments to the Cochran proposals.' 3. It appears that the first Netherlands reply to the Cochran proposals not only provided for a large number of amendments but also stipulated a number of impossible conditions of the 'have you stopped beating your wife' variety.  I also suspect that there was no clear indication as to whether the Netherlands were prepared to accept the Cochran plan as a basis for resuming negotiations. Cochran refused to transmit this reply and pressed for a number of elucidations and modifications. After a delay of ten days the reply, which is set out in my telegram No. K.178, was finally delivered.
This reply included exactly the same amendments to the Cochran plan as the originally intended reply but the covering notes were described by Cochran as 'a very great improvement'.
4. The Republican response to the Netherlands reply was handed to Cochran at mid-day on Friday, 22nd October, and appears to have given him considerable satisfaction. A copy is attached.  Cochran transmitted this response to the Netherlands the same evening, together with a personal note in which he gave his own assurance that the Republicans were making every effort to resume negotiations in a satisfactory atmosphere.  Cochran was also pleased by an Order of the Day given by President Sukarno that the Army should safeguard the Truce Agreement.
5. Under the pressure of Cochran's presence, Schuurman, Acting Vice-Chairman of the Netherlands Delegation admitted the Republican response was encouraging, but the Dutch, already committed to a policy of refusing to negotiate because of alleged Republican breaches of the Truce, showed no enthusiasm for the President's Order of the Day. They had prepared, no doubt considerably in advance, a strong press statement for the occasion of the Republican reply. Cochran's informal efforts prevented them issuing it but did not prevent an official communique which included the following- 'While Sukarno in an Order of the Day stressed the necessity of the observance of the Truce, at the moment there are no guarantees that this will indeed be lived up to.' 6. On the day following the receipt of the Republic's reply the Netherlands made further efforts to sabotage the resumption of negotiations. Notwithstanding their agreement in their reply to Cochran to meet the Republican condition that civil servants would not be evicted from Batavia they issued eviction notices to five Republicans, including Colonel Simatupang, Republican Chief of Staff, the main Republican military delegate on the Security Committee. According to Republican authorities the five people concerned have not been engaged in subversive activities. At the same time four other Republicans in Batavia were allowed to stay on only on the condition of signing a guarantee that they would not assist the Republic. So far informal efforts have not succeeded in having the Netherlands withdraw the notices. The Committee has followed up the informal approaches with a strong letter seeking reconsideration of the decision.
7. Strangely enough the Netherlands found it necessary to submit the Republican response to the Cabinet which met at The Hague on October 27th. The Netherlands Cabinet decided the Republican response was unsatisfactory, particularly with regard to the Netherlands requirement that the Republic should implement the military and economic clauses of the Truce. My experience here leads me to believe that no Republican reply on this point would have been considered satisfactory at this stage. The Netherlands therefore sent a letter to Cochran asking for further Republican assurances regarding implementation of the Truce.  Cochran is taking this letter to Hatta today.
8. The same Cabinet meeting decided to send Stikker to Indonesia.
He left the following day and will arrive here on Sunday, October 31st. Beyond the fact that he wishes to see Hatta and that he claims he is seeking a resumption of the negotiations, I know nothing definite about the purpose of his visit. The official press release, the sentiments of which have been confirmed by Stikker himself, is enough to give every cause for alarm. In full I quote-
'In view of the increasing unrest in Indonesia which causes great anxiety to the Government, the Cabinet has decided that the Minister of Foreign Affairs, Mr. D.U. Stikker, LL.D., will leave for Indonesia today. The object of this visit is on the one hand to become acquainted locally with the extent and gravity of the alarming situation, on the other hand, without personally undertaking the conduct of the negotiations possibly to be resumed, to try to promote the possibilities of this resumption.
In case the negotiations could be resumed-and the Government wants to do its utmost for achieving a satisfactory solution by sending once more one of the members of the Cabinet-in the first place compliance with the Truce and a speedy resumption of the goods- traffic have to be effected. The intention is that Minister Stikker's visit will be of only short duration, probably not longer than ten days in Batavia.
A month ago Minister Stikker visited the American Secretary of State General Marshall for a discussion of the problems of the Far East. Recently in Paris he was able to exchange views about this same subject with several of his foreign colleagues.'
In passing you will note the last paragraph is a gratuitous effort to implicate the United States. References such as this, inferring that Netherlands policy has the backing of the United States are appearing regularly in the press now and are infuriating the Americans. The full importance of the above press release can only be appreciated in relation to the fierce publicity campaign which is now being directed to proving that the Republic is either unwilling or incapable of maintaining the Truce.
9. The campaign is reaching a peak. Here is a sample of today's press reports-'Netherlands political circles generally consider Minister Stikker's trip as a last attempt to put an end to the almost impossible situation in some parts of Indonesia. It is generally accepted that a different line must be followed than we have done so far to make the Republic resume negotiations.' 10. You can draw your own conclusions but it seems to me there is little prospect of the talks being resumed, that an ultimatum will be given to the Republic and that there is every prospect of a police action within a few weeks. The logical time for such an action would be mid-December when the Assembly finishes and when there would be a period of about two weeks in which it would be impossible to call the Security Council together.
11. The Netherlands campaign hinges on accusations that the Republic is responsible for the infiltration into West Java of armed bands totalling 11,000. These allegations are not supported by the facts as I know them. Sjahrir, for example, will admit there are some infiltrations and points out that many are civilians seeking to return to their homes in West Java. He further admits that some armed bands have infiltrated but stresses that the number would not be more than 1000 and that the movement does not have the approval of the Republican Government. Possibly many of the armed bands are Lasjkars, irregular units formed by Sjarifuddin when he was Minister for Defence. In any event our Military Observers report that infiltrations in recent weeks have practically stopped, while I am convinced the Republic is doing everything possible to maintain the Truce so that negotiations can be resumed in a satisfactory atmosphere.
12. In an effort to prick the bubble of Netherlands propaganda I am endeavouring to have the Committee issue factual statements on the military observation of the Truce, but obtaining Herremans' assent is a slow and devious task.
13. Clearly every effort must be made to settle the dispute with the assistance of informal American pressures. I can assure you that both Cochran and myself have maintained our best efforts to this end. However, a realistic appraisal of the situation shows we are almost certain to fail. The Netherlands, by their commitments to the Federalists, by their activities in their parliament and by their propaganda have, to all intents and purposes, made a real settlement impossible.
14. It must also be borne in mind that a report to the Security Council offers the simplest way of combating the provocative propaganda of the Dutch. If we delay in preparing our report it may be too late to make even a feeble protest before a police action. At any rate while hoping for the best I am preparing for the worst. It would be less than realistic not to consider the action Australia would take in the event of a complete breakdown in the negotiations. I believe it would be profitable to have detailed talks with the State Department on this end to consider the possibilities of a U.N. trusteeship of the Republican areas or a direct recognition of the Republic. This much is certain, if there is no settlement and no police action, something must be done about economic conditions in the Republic. It would not surprise me if the Republic made a last appeal for recognition and help to neighbouring countries such as India, Burma, Ceylon, Siam, the Philippines and Australia.
15. Cochran impresses me as making sincere and strenuous effort to obtain a fair settlement, but an impression is also gaining ground that the State Department is more concerned with the U.S.
reputation in this area than with a satisfactory agreement. It would not surprise me if the Americans seek to get out from under a situation which is becoming impossible and justify their failure before the world by the Cochran proposals.
16. If we, or rather Cochran and the Americans, are successful in having the negotiations resumed, the objective will be to avoid an immediate deadlock and seek a breathing space of a couple of days in which to improve the atmosphere of the talks. This would probably be a last opportunity to seek a compromise fair to the Republic. I must stress, however, that the political situation inside the Republic would not permit Hatta to make substantial concessions away from the Cochran proposals no matter how desirable they may appear.
17 Undoubtedly the major Dutch objections to the Cochran plan centre around the elections. Narayanan, principal Secretary of the U.N. Secretariat to the Committee who has just returned to Indonesia via The Hague reported to me a personal conversation he had with Prime Minister Drees. Drees made the following points:-
1. The Dutch are afraid of their position in Indonesia which they consider seriously endangered by the hostility of the Republicans.
2. They regard co-operation between Holland and Indonesia as vital to Holland's economy and stability.
3. They are afraid of losing elections and are not prepared to agree to the fixing of a date for elections until they are reasonably assured of their position in Indonesia.
4. Any settlement in Indonesia must provide safeguard for the Federalists who have cooperated with The Hague.
5. The Dutch are therefore determined to set up an interim government which will provide opportunities for the Federalists.
If the Republic will come in so much the better, if not this interim federal government will be set up without the Republic.
6. The Netherlands appreciate that a stable government in Indonesia is unlikely without the Republic.
7. At the same time the Republic is weakening and cannot last much longer.
8. Drees gave four reasons why the Dutch were anxious for a quick settlement- (a) Moral (influence of world opinion).
(b) Economic (dislocation in Indonesia and the cost of the army).
(c) Political (Dutch politics will be unstable until a settlement is achieved).
(d) Military (The Western Union and the Americans have been making demands for a Dutch Army in Europe. Holland has approximately 130,000 troops in Indonesia (including Netherlands Indies troops) but only approximately 2,000 in Holland).
9. Finally Drees admitted that colonialism is dead and that there would have to be a new policy in Indonesia. He stressed however that the Dutch could and would only give up gradually.