302 Dexter to McIntyre
Minute CANBERRA, 18 March 1949
WEAKENING OF NETHERLANDS ATTITUDE
Since the beginning of the year the Netherlands' actions have been remarkably inconsistent with what was surely the object of the second Police action, namely, liquidation of the Republic and its leaders. First they freed Sjahrir and then they allowed the Republican Delegation in Batavia to function. They permitted Sukarno and Salim to proceed to Bangka, freed the Republican leaders there, provided facilities for the Committee of Good Offices and United Nations Commission to visit the Republican leaders, sacked their own Minister  responsible for the Police action, and finally invited the Republic to participate in the Round Table Conference at The Hague.
2. The weakening of the Netherlands' attitude is probably due to the following factors:-
(a) The Stiff Attitude of the B.F.O.
The unanimous decision  of the B.F.O. on 12th March to confirm their resolution  of 3rd March calling for the restoration of the Republican Government to Djokjakarta must have been a sore blow to the Dutch. During the vacillations of the B.F.O. between 3rd and 12th March when Sultan Hamid II, and other Dutch puppets sought without avail against Anak Agung and others to quash the resolution, Beel was very distressed and intimated that he might be forced to resign. Beel has favoured the transfer of sovereignty to the United States of Indonesia but only so long as his own powers would not be curtailed during the interim period.
(b) The Republican Guerilla Activity Guerilla activity has increased as evidenced by the reports of the Military Observers. Netherlands forces only control certain main towns and not even the routes between all of them. Brigadier Prior during his visit to Sumatra between 22nd February and 1st March noted that Republican attacks were taking place well within Netherlands occupied territory. 'Aneta' has acknowledged three separate Republican attacks on Djokjakarta.
(c) The Moral Condemnation of the World This was expressed in the Security Council Resolution  of 28th January and in the first resolution  of the New Delhi Conference. The Dutch have professed astonishment at the world's attitude and have pleaded inexperience in International Affairs.
This moral condemnation probably led to the sacking of Sassen who, backed by Professor Romme, the Parliamentary Leader of the powerful Catholic People's Party, wanted to defy the Security Council and maintain an authoritarian line in Indonesia.
(d) Economic Dislocation In the areas occupied by the Dutch after the first and second Police actions guerilla activity is dislocating economic rehabilitation which can only function on law and order, the establishment of which was ostensibly the reason for the Police actions.
3. Looking at the matter now the Dutch must realise that they have made a blunder, and ask themselves what was the point of Police action if the Republicans are inevitably to be restored to Djokjakarta. It will be impossible for the Dutch to arrive at any solution on the future of Indonesia which is boycotted by the Federalists as well as the Republicans or even by the Republicans alone. Such a solution would be based only on force of which the Dutch have not nearly enough. They have come a certain distance since Van Royen's statement  on 28th January, although Koets, on 28th February, in clarifying Beel's offer to Sukarno, stated that it was impossible to restore the Republican Government to Djokjakarta at present.
 As the rest of the world, including the Federalists and Republicans is standing firm on Security Council Resolution, it is imperative for the Dutch to seek a way out and find some face- saving method of restoring the Republicans to Djokjakarta. If The Hague Conference is only a detour necessary to help the Dutch avoid a piece of bumpy ground as Cochran believes and not a new track away from the Security Council resolution, we could help the Dutch by agreeing to the Canadian-Chinese idea  for a preliminary Conference between the Republicans and the Dutch with the assistance of the United Nations Commission, with the specific object of arranging for the return of the Republican Government to Djokjakarta in a stated time.