Agreement has now been reached on all difficult points of the Union Statute except one and I believe the Dutch will be forced to give way on their remaining demand that the head of the Union be permitted to take decisions on the recommendation of the Conference. It is therefore most likely that a satisfactory agreement will be reached on the Statute of the Union. There will be a lot of words but they should not limit the real independence of Indonesia. Hatta and most of the Indonesian Delegation appear to be satisfied but Sukiman is concerned about his party and careful preparation will be necessary to ensure that the agreement is properly understood in Indonesia.
2. The crucial test of the conference will be the economic and financial discussions coming week, when the Indonesians will endeavour to force the pace.
3. It is still quite possible to reach final agreement before the end of October and any withdrawal of Republican leaders at this stage would be most ill-advised. Please keep me fully informed of any further moves in this direction and of the results of the Cabinet meeting at Jogjakarta.