My telegram K.181. 
The Netherlands, in rejecting as unsatisfactory the Republican reply to their note on the Cochran proposals, stress increasing number of incidents and breaches of the truce. They point out that the Republican delegation failed to agree to the Dutch proposal to implement Article No. 6 (the economic clause)  of the truce agreement (see documents numbers S/AC/conference 2/C23 and S/AC/10/conference 2/3/SR9). 
2. The Netherlands letter further states that, the Republic must prove its willingness and ability to implement the truce before political discussions can be usefully continued. it accepts the Cochran plan  as a basis for resuming negotiations but stresses that as a condition of negotiations to that resumption, the first two items on the agenda must be the implementation of the military and economic clauses of the standing truce.
3. The Republican Government has received the Netherlands reply with pessimism. Hatta seems to be convinced that the Republic can make no further concessions but will not reply until he has had an opportunity to confer with Stikker. Hatta may make such an interview conditional upon the Netherlands ensuring him safe conduct to Sumatra which he is anxious to visit for administrative reasons.
4. This morning I had a long personal interview with Stikker who made the following points- (a) He had come to Indonesia with an open mind to see if a settlement could be reached with the Republic.
(b) As a result of the Emergency Act for Indonesia  the Netherlands were able to conclude an agreement without delay but it would be subject to ratification by the States-General within a month.
(c) The Netherlands were prepared to establish a Sovereign United States of Indonesia and a Union with the Netherlands, but could not accept early elections. Elections were desirable as a basis for setting up the United States of Indonesia but could only be held after law and order were restored. In answer to my question Stikker felt that the Netherlands would not expect to be solely responsible for deciding when law and order were restored and he raised no objection to my suggestion that it might be possible to fix a date for the elections on the understanding that the date could be delayed if the parties agreed the conditions were unfavourable.
(d) Federalists were an important third party in the dispute and the Indonesians would have to work out their own differences.
(e) Economic help for the Republic, particularly textiles, was vital to the Republic and important to the Netherlands.
(f) A police action was not being considered by him at this stage.
(g) Emphasized, however, the increasing number of incidents in Netherlands-controlled territories which he described as breaches of the truce. He pointed out that after Renville, incidents had fallen away steeply and said that a similar decline was necessary now t[o] reassure the Netherlands people.
(h) He hoped Hatta would enter the discussions with him with an open mind.
5. Stikker's views are hardly consistent with the current tone of the Netherlands Press. I stressed that the situation would be immeasurably improved if the Netherlands could make the first gesture of good faith, that the delay in reaching a political settlement had aggravated difficulties in the original truce and consequently that it would greatly assist if Stikker could discuss the outlines of an overall political settlement with Hatta with a view to convincing him that a compromise was possible.