437 Hodgson to Department of External Affairs
Cablegram 276 (extract) PARIS, 22 December 1948, 7.25 p.m.
Security Council 22nd December Agenda adopted without debate and Australia, India, Indonesia and Netherlands invited to table.  Palar represents Indonesia and Van Royen Netherlands.
Van Royen was only speaker this morning. He began with statement from his Government reiterating Dutch policy which was (1) Independence for Indonesia.
(2)Co-operation between Indonesians and Dutch.
(3) Sovereignty for USI.
(4) Netherlands-Indonesian Union.
This policy had been hampered by extremist elements. Steps had been taken in accordance with article 2 of Renville agreement  on December 18th to form Interim Government. This would guarantee in conjunction with other steps that had been taken the preservation law and order and freedom of the choice of the people. Dutch Government would keep Security Council informed of steps it was taking to make Indonesia a sovereign member of U.N.
Having read this statement Van Royen then made long statement along following lines.
The dispute in Indonesia was not whether Indonesia should secure independence; this question was already settled. The issue was whether the USI should be inaugurated under the dominance of an undemocratic extremist minority or not; whether the state should be unitary or federal; whether it should be undemocratic or not.
The Renville prohibitions on inflammatory broadcasts had been repeatedly violated. Instances of exhortations by Republic after Renville to sabotage of truce were cited. On their side Netherlands had 'allowed 30,000 troops to withdraw'. Lull after Renville soon evaporated. The tactics of infiltration used by the T.R.I. were officially sanctioned as instanced. by the order 'to attack Netherlands posts and sabotage railway line'. Negotiations towards a political settlement were broken off by the Republic in July.
Cases of violation of truce then [quoted]. 
Indonesians intended to start large scale operations on January 1st. Japanese member T.R.I. had been captured with documents showing intention to start mass resistance. In South and East Java movements called '[January] First' had grown up, that in East Java having code name 'Wingate'.
Establishment of separate states was not at variance with Renville which recognised principle of Federalism. They are only provisional. Establishment of separate states best method of satisfying demand for self-government. Netherlands will not stifle such demands when they arise in the people as is specifically enjoined by Article 2 of Renville.
The real issues were independence, form of government and co- operation in Netherlands-Indonesian Federation. As soon as Netherlands put forward concrete proposals Indonesians failed to agree because the Republic wants the whole of Indonesia.
Netherlands has made complete proposals for settlement but no counter proposals have been received. November 10th Aide Memoire  from Hatta encouraged Dutch to send their Foreign Minister to Djockjakarta. But when he arrived Hatta retracted most of what he had suggested, for instance, Republic was prepared to recognise de jure the sovereignty of Holland in the Interim period but not de facto.
On armed forces the Republic wanted the withdrawal of Dutch but the preservation intact of T.R.I. which would take over. T.R.I.
would not be incorporated in Federal force which had been recognised as necessary in principle and would merely have under Republican proposals an increasing superiority which would confirm the fears of the remaining two thirds of Indonesia.
The main reasons on surface for disagreement were the powers of the High Commissioner, the Army, the new states and the truce violation. But these were only symptoms of a larger disagreement, the desire for dominance of all of N.E.I.
Hatta letter to Cochran  was 'rough and informal', and ignored truce violations, unified command and existence of T.R.I. They were no basis unless officially endorsed by Government. On December 16th Dutch proposals  were rejected and Soekarno visit to India would have meant no possibility of Governmental endorsement of Hatta. Conclusion was that Republic did not want agreement.
Netherlands have never contended that Republic controlled by Communism but do claim that it relied partly on Communists with all attendant dangers of coup d'etat. Communism established in governmental services, army, labour, and youth movement. [Hatta has upheld the legality of Communism as political movement] and affirmed position of U.S.S.R. as champion of Colonial peoples.
Suppression of Musso revolt does not mean that [Re]public has suppressed Communism as, in order to do this, Republic had to rely on another Communist, Tan Malaca, and so called suppression was only a switch. Soerakata is in hands of Communists and the aims of new Communist party along traditional lines leave no doubt as to their objectives. Relations between them and Malayan Communists close and they are all directed from the same centre. Situation could not be allowed to continue indefinitely. First task was to endow non Republican areas with structure guaranteeing independence. This was done by decree of December 18th setting up Interim Government without Republic. Federal nature of Government supported by many Indonesians who fear expansionist nature of Republic. While common existence under Netherlands has created common nationalistic tendencies amongst varying Ethnic groups, local autonomy must continue. Centralised concept would give dominance to one group, a minority. Federalists have only been able to come to the fore in non Republican areas because within the Republic this would cost them their lives. They are not puppets and follow an evolutionary rather than a revolutionary line. The Republic controls only 35% of people. Moderates outside Republic are no less sincere and nationalistic as was proved by the Bandoeng conference. They believe the best way to independence is through the Netherlands.
Places in the Interim Federal Government will be held open for Republican areas and principles of Lingadjarti and Renville will be followed. Netherlands could not have denied to rest of Indonesia a Federal Democratic structure any longer. Stability of Society was threatened by ever increasing murder and sabotage.
Republic could not control violence and Netherlands faced its intention to take over whole of N.E.I. The alternatives were either Communism, violence and incompetence which would follow giving in to Republic or giving up useless attempts to agree and proceed on its own authority with measures to create orderly conditions for achievement of independence.
These measures involved formation of an Interim Government and the purging of Indonesia of Republican armed bands. The first principle of Renville agreement  gives right to Netherlands to proceed along these lines.
Unrest and insecurity have become unbearable and measures already long over due could not be deferred. The decision was made by Dutch cabinet on Saturday morning December 18th and whole Dutch nation stands behind it. Decision was made with the greatest reluctance but having once taken it then nation will carry it out no matter what the consequences or the cost. Security Council should give Dutch a chance to prove what they can do.
This brought Van Royen to a long discussion of competence of Council which he categorically denied.
'The Good Offices Committee had been accepted in a spirit of good will and in hope of a solution.' This did not admit competence of Security Council. Committee had failed and Security Council must face question whether it can take any further action. The answer must be no, because the letter and spirit of charter forbid it on the three grounds.
1. The charter applies only between Sovereign states (Article 2(1)). 
2. Domestic jurisdiction (Article (2) 7). 
In this connection Van Royen quoted extracts from Hasluck's book  in which he makes reference to original Council consideration of question.
3. The situation does not endanger peace and security.
This view was tacitly supported in 1947 by United Kingdom, United States, Belgium, France, Brazil, China and despatch of G.O.C. made no difference because use of services [of] Committee was only on express request of parties themselves. Competence has never been recognised by Netherlands or decided by Council. When Security Council has failed so often in matters of which it has competence it would be wise to refrain in interests of prestige of U.N. from attacking problems outside its jurisdiction.
Netherlands however, would not object to a reference of this matter to international Court.
The Netherlands should be given a chance to set up a United States of Indonesia on a[n] orderly and democratic basis. Their acts will bear out following promises.
(1) To restore real peace.
(2) Rapid establishment of independent U.S.I. as a member of the Netherlands Indonesian Union and a member of U.N.
(3) Strict adherence to principles of Renville and Lingadjarti.
(4) Nothing will deflect Netherlands from this course.
End of statement.
This afternoon's proceedings will be reported at conclusion of session. So far following speakers are on list: Indonesia, U.S.S.R., China, India, Australia. It is therefore, possible that we will not be reached today.