For the last few days we have been preoccupied with the report which the Commission will send to the Security Council tomorrow.
If the draft is not amended too radically it will prove a strong report placing the issue of Netherlands non-compliance squarely before the Council.
2. The only attachment this week is the text of a press statement by Hatta referred to in my telegram K.267.  The statement has been given wide publicity and I am sure has caused some unhappiness in Netherlands circles.
3. I have been gathering material on the Federalists, particularly on the situation in Pasundan, but it will be a few days before I have an opportunity to put it together.
P.S. I am coming to regard the Military Observers as the mouthpiece of the Dutch rather than the ears and eyes of the Commission. They see and hear only what the Dutch want them to see and hear and the American  and Australian  Senior Officers at Batavia are failing badly to match the energy and ability of the Belgian representative.  We are expecting a new batch of Military Observers shortly, and I strongly recommend that the Dept. take a keen interest in their selection.
Statement of Prime Minister Mohammad Hatta to Harold R. Isaacs, correspondent of Newsweek Magazine.
1. This is the first opportunity I have had to make any kind of statement to the press about the situation created by the Dutch attack on the Republic of Indonesia on December 19, 1948. From this place of enforced exile, I want to say that our pain over what has happened has been mitigated by the reaction of the whole world, which has condemned the Dutch for their brutal resort to arms. It has proved to us that it is not yet time to give up to dark pessimism.
The UN Security Council has finally passed a resolution  designed to rectify the injustice that has been done. We stand by and accept that resolution. We for our part will do nothing to help the Dutch evade their responsibility under that resolution.
We want to warn our own people and the members of the UN that the Dutch are trying right now by every trick they can devise to evade the UN resolution. They must not be allowed to do so.
2. In connection with any future talks that may be held between us and anybody, I want to make it quite clear that there can be no negotiations on the future of the Republic or of Indonesia as a whole until our conditions have been fulfilled, i.e. restoration of the Republican government at Jogjakarta and withdrawal of Dutch troops from our territory, as stipulated in the U.N. resolution.
3. We understand that there is talk of some new 'plan' involving an alleged transfer of sovereignty from the Dutch to a proposed United States of Indonesia. It is not difficult to recognize this kind of talk for what it is, an obvious trick designed to deceive the people of Indonesia and the U.N. and to provide the Dutch with an opportunity to befuddle world public opinion. We do not intend to fall for that trick.
4. We are prepared and always have been prepared to discuss our problems. We have now agreed informally to meet members of the Contact Commission of the Federal Consultation Conference. That is for the purpose of answering questions and clarifying our views and position and the place of Indonesia in the world.
These talks will not constitute negotiations. These talks cannot be used by the Dutch to evade the UN Security Council resolution.
There are among the Federalist leaders many men who share our own powerful determination to win real freedom for Indonesia. We don't think these leaders are any more ready than we are to be the victims of any new Dutch tricks. That is why we are glad to talk to them about our common problems.
Any transfer of sovereignty will have to be a true transfer of sovereignty. The longer it takes to reach that point the worse it will be for the Dutch and for the Indonesian people. We signed solemn agreements in which the Dutch pledged full sovereignty to the whole of Indonesia by Jan. 1, 1949. What the Dutch have done instead is to launch two military attacks against us, try to stifle us with a blockade, and to divide us by setting up artificial divisions among us. They have by this long series of misdeeds fed the fires of destruction, extremism and fostered bloody violence that is a tragedy for our country. We will have to bear the cost of this and it will make our freedom all the more difficult to realize. But we are still determined to make our own way, to help unify our people, and to work in partnership with all other countries in the world to build a better future.