While awaiting directions from the Security Council we have been doing our best to keep the Council informed of developments here.
Military Situation Unfortunately this is not always easy; the reports from the military observers in the field are not all that might be desired.
Consequently only with considerable difficulty have we succeeded in obtaining Belgian agreement to a report which will not have a damaging effect on the situation here. As it is, the words of compromise are neither smooth nor direct. Military observers are, of course, gravely handicapped. Attached to Dutch headquarters they are always in the company of Dutch military officers and few, if any, have gained the confidence of the Republicans sufficiently to obtain the information from that side which is necessary for a full appraisal of the military situation. Attachment 1 is the report  which we shall telegraph to the Security Council today.
It is as balanced as we can make it in the circumstances but I still feel badly that it refers to fears of reprisals because of guerilla activity whereas there is no information whatever about the burning of villages by Netherlands troops, or of the civilian casualties resulting from Dutch artillery fire.
Notwithstanding these difficulties it contrasts strikingly with the Dutch summary of the military situation which was issued to the press on 24th January (attachment 2 ).
Colonel Rhys, who has just returned from a tour of Sumatra, reports that the Dutch are grimly hanging on in many areas with too few troops to control the situation. Djambi is a notable exception. Here a large number of TNI are claimed to have given up their arms and offered co-operation with the Netherlands authorities. Djambi itself is badly damaged by sabotage, but the city, which has a very large Chinese population, is comparatively peaceful.
The Republican viewpoint is set out in attachment 3 -notes for the American Representative on the Committee prepared by Priggodigdo, who was Advisor to the Chairman of the Republican Delegation. Pringgodigdo's information is usually reliable. In next week's bag I hope to include a translation of a feature article, 'A week with guerillas', published in one of the Chinese papers. This article confirms the reports from Republican sources that I have already sent to Canberra.
The Federalists 'Disappointing' sums up the Dutch view of the past week. Drees returned with his party to The Hague without having accomplished anything positive, as is fully reflected in his farewell statement (Attachment 4).  Apart from the misleading impression that the Mission discussed with the Committee how meetings could be arranged with the republicans, the statement does indeed emphasise that some of the Dutch are belatedly realising the importance of the Republican leaders. The significance of Drees's statement has not passed unnoticed by the local Dutch press. Batavia Daily Het Dagblad deplored the fact that Sukarno's Republic had been put into the foreground again, whereas 'according to a former Government statement, it had ceased to exist after the police action'. This paper could not accept fully Drees's standpoint that the Indonesians have to decide on the future of their country themselves. And it especially complained that whereas some Federalists were flirting with the Republic it could not be understood why other 'real' Federalists did not publicly tell Indonesia and the international world that the Dutch were carrying out a policy they wanted.
Newspaper comment gives the impression that the reactionary elements feel that the military action has placed them firmly in the saddle in Indonesia and disposed of the Republican issue. This suggests the importance of continued and strong international pressure to keep these elements in check.
Disappointment that Sukarno, Hatta and other Republicans did not accept the Federalists' invitation to come to Batavia for discussions with the B.F.O. reveals a surprisingly weak Dutch appreciation of the Republic's position. Another vicious circle may be created. Netherlands officials are hinting that if Sukarno and Hatta would come to Batavia and negotiate with the Federalists the question of releasing them would become so much easier. On the other hand the Republicans are not unreasonably insisting that their release must precede any consideration of negotiations.
Attachment 5  is a translation of the Federalist invitation to the Republican leaders and the latters' replies.
Visits of Batavia Republicans to Bangka and Prapat This subject has been covered in my telegrams. Attachment 6  is a report on the trip from Soedjono, Secretary-General of the Republican Delegation, which the Committee will forward to Lake Success with the Netherlands comments today.
Assaat has now written to me authorising the release to the press or any other use I may see fit to make of his report on the conditions of the internees at Bangka (see attachment 5 of my letter  of 18th January).
Sjahrir and Leimena will go to Bangka today for discussions with Hatta. It is most unlikely, however, that the Netherlands will provide facilities for a Republican Mission to Lake Success. Since there is little prospect of a mission arriving in New York in time to be of any value, failure of the Dutch to grant permission is probably the most useful response to their request the Republicans could obtain. I shall endeavour to have the Committee report on this matter by telegram today.
Pasundan In my telegram K.257  I have reported the Pasundan situation.
With this letter is a copy of the Proclamation of the military government (attachment 7 ). Democracy does not shine in Indonesia. In Pasundan it has been brighter than in most other states created by the Dutch; but recent happenings prove how thin the tinsel is even there.
Security Council Resolution Today may see the last meeting of the Good Offices Committee. If the Security Council accepts the Four Power resolution  it will still be open to doubt whether it will be accepted. On the Dutch side the decision will be taken at The Hague although it is certain that the Government here will report on the difficulties involved in such a decision. The Republicans will also be in two minds. I believe they will accept the Resolution but I am by no means certain that the fighting can be stopped. If both sides accept the Resolution there will still be wide opportunities for the Netherlands to sabotage its implementation. The United Nations Commission will, therefore, have an extremely difficult task.
I notice that the Resolution makes no mention of the armed forces of the Republic. Presumably this is deliberate. While it will be necessary to avoid the creation of a Republican army not fully under control of the Government, it will be just as necessary to ensure that the Republican Government has at its disposal a well- disciplined and organized security force of police and militia. It will also be highly desirable to arrange for the early formation of a federal army into which individual members of the TNI can be recruited according to their suitability. But, of course, this is only one of the problems that may be in store.