520 Critchley to Department of External Affairs
Cablegram C29 THE HAGUE, 25 October 1949, 5.30 p.m.
IMMEDIATE TOP SECRET
Your 91. 
I fully agree with your reply to the Netherlands Minister.  The Steering Committee, with the assistance of the Heads of the delegations to the various Committees, is now thrashing out all the remaining differences. Points on which the parties cannot reach agreement are referred to the Commission for suggestions. So far the procedure is working satisfactorily. We have not yet attempted to deal with the major difficulties, however, and there is no undertaking by the parties to abide by the Commission's recommendations. So far complete agreement has only been reached in the Social and Cultural Committees, but there is a firm intention on all sides to complete the Conference on or about the 1st November.
2. Cochran has only vague advice from the State Department on New Guinea and Naval agreements. I believe he has been left full freedom of action.
3. The Indonesians insist they cannot go back to Indonesia without New Guinea. Providing Sovereignty is transferred to the R.I.S.
they would be willing to undertake immediately a long-term agreement permitting the Netherlands full economic and administrative rights. Postponement of the New Guinea issue may prove the most practical way out of the difficulty. Cochran is inclined to support me in this.
4. Last week the Indonesian delegations were confident of early agreement in the Military Committee. It is now clear that the three points mentioned in paragraph 3 of my C.23  and particularly the question of the Sourabaya Naval Base will be troublesome. Basically the Netherlands want a special concessional status for the Naval Base which is opposed by the Indonesians as inconsistent with a complete transfer of Sovereignty. The delegations are still considering their positions and the possibilities of compromise. The problem is scheduled for discussion in the Steering Committee tomorrow, 26th October, and I shall report the results in detail.