This week I am attaching the interesting Dutch documents. The first  is a confidential memorandum to the members of the States-General, from a number of officials, Dutch and Indonesian, in the Netherlands Indies Service. Although I have not seen the original of this document, I believe it is authentic. It provides a useful insight into Dutch difficulties in Indonesia. One aspect worth pointing out is the threat of what is described as a 'counter terror'. Republican sources are already reporting that the Netherlands forces in Indonesia have initiated a terror campaign to break the spirit of the people (see my K.286 ).
From the outset there have been powerful influences (such as Spoor) whose objective has been the crushing of the real nationalist forces irrespective of the blood letting involved.
Even moderates among the Dutch talk of Indonesian respect for 'power and authority'.
2. The second document is an account  of a visit to Djokja from the 17th to 21st February, 1949 by Dr. F.L. Bakker, a Missionary Consul. This account shows the marked contrast between present conditions in Djokja and those before the second military action.
3. Both documents help to demonstrate the falsity of the Dutch arguments that the Republicans cannot be permitted to return to Djokja. Van Royen's speech  in the Security Council on March 10 was depressing and, in its account of the difficulties associated with the re-establishment of the Republic at Djokja, deliberately designed to mislead the Council. It is evident that so far the Netherlands have given no real consideration to the question of what concessions they should make to nationalist forces in Indonesia but are still following a policy designed to hold on to the Indies as completely and as long as possible. As suggested in my first paragraph, this is a policy which will bring misery to the local people. It will also result in further economic destruction and finally create even more serious political problems for the Indonesians, the Dutch and everybody else. I am convinced that the Dutch will only change this policy under the strongest pressure. In the final analysis the United States must say, 'Do this in such a time or else we shall support severe economic sanctions against the Netherlands'.
4. All of the foregoing, of course, supports the need of a firm policy by the Security Council. Among its other defects the compromise proposal currently proposed by China and Canada in the Security Council would tend to encourage the Dutch in their obstinacy. I was glad to note the instructions passed on to New York that the objective of the Council should be to insist on compliance with the resolution.
5. I regret that in my telegram No. K.286, I over-telescoped my objections to the Chinese compromise proposal  and did not spell out the 'awkward questions regarding Republican participation' in negotiations for return to Djokja. Briefly I had the following in mind. Republican leaders, while they are without territory, must be regarded as under duress. In this position they can make arrangements for return of the Government to the capital and for resumption of the administration of Republican territory.
It is open to doubt, however, whether the leaders would be prepared to 'negotiate' before their return. Negotiations presume a government. This means that members of the Government at present with the guerillas in Central Java and those with the Emergency Government in Sumatra must be brought together with those at Bangka, Batavia and Djokja. It would be easy to arrange such a meeting in Republican-controlled territory, but far from easy in territory now under Dutch control. Assuming that the Republican leaders at Bangka agreed to negotiate conditions for their return to Djokja, it is possible such negotiations would be rejected by the Emergency Government. Already there has been criticism in Republican circles that the Bangka leaders have been taking decisions which should have been left to the Emergency Government which was given power on 19 December. A conflict at this stage between the leaders on Bangka and the Emergency Government would weaken Republican authority, create added confusion and generally increase the difficulties of resuming negotiations in a satisfactory atmosphere.
6. Finally I agree with you that the preliminary conference might get nowhere, while protracting delay. Probably the Dutch would open the negotiations by suggesting compromises which could not be acceptable to the Republicans. Herremans has hinted, for example, that Dutch troops might be retained in Djokja-an impossible condition if law and order are to be restored and if the Republican leaders are to speak with authority. Furthermore I should not be surprised if the Dutch endeavour to force the Republican Government out of Java to Sumatra by suggesting it be established in Atjeh. A further argument which the Security Council should bear in mind is that the longer the delay the more difficult it will be to implement the Resolution or indeed find any overall solution to the Indonesian question.
7. Attachment 3  is a special report by the Milex Board on the area Jogja-Magalang-Salatiga-Solo. It further supports the conclusions already forwarded to the Security Council, that active military operations are continuing in Indonesia.