Notwithstanding strong appeals both informal and formal, including
use of your telegram 404 [1], both Graham and Van Zeeland were
insistent that cabling of a section of the report to the Security
Council yesterday would have jeopardized the probable acceptance
of our most recent document (see my K.28, 29 and 30 [2]). Our
report is almost ready for despatch and will probably be sent in
advance [of] document. Although we shall be off the Security
Council when the report is discussed I presume we shall be allowed
to debate the issues. Although it is too early to judge finally, I
believe considerations set out in paragraph 5(e) of my K.26 [3]
may still apply.

2. Our latest document with a few minor modifications was agreed
to on Christmas Day and submitted informally to the Netherlands
and the Republic on December 26th. [4] I have sent two copies by
air mail number 51. The document has many defects of compromise
and many more of hasty drafting but it was accepted by Van Zeeland
who was not prepared to consider an alternative, and, it does I
believe seriously undermine the present Dutch policy in the
Indies. Militarily the Dutch have presented the Committee and
Council with a fait accompli. They are now endeavouring to do the
same politically and it is essential that the Committee endeavour
to check this without delay.

3. My advice to the Republic is to accept the paper but not with
undue haste and that in doing so they should stress:

(a) The serious disadvantages involved and that acceptance of the
'Van Mook Line' as a general basis even though provisionally is
unjust and not in keeping with the resolutions of the Security
Council. Nevertheless that since they have agreed to accept the
assistance of the Committee and the Security Council and despite
the serious sacrifices involved, they accept the proposals in the
spirit in which they have been put forward, namely, one of helpful
compromise.

(b) That in view of (a) they must stress urgent necessity of an
early political settlement and that they are pleased to note that
the Committee agree that the political proposals and truce
proposals are parts of a close integrated plan.

(c) That since the dispute is essentially a political dispute no
truce plan can be wholly satisfactory but can only serve to
improve the atmosphere for early political talks and agreement.

(d) That they will do everything possible on their side to prevent
the incidents and achieve a worthwhile truce but that in a period
of uneasiness truce incidents may occur. They are therefore
pleased to learn the Committee has proposed special safeguards
connected with the policing of the demilitarized zones and hope
that these measures may be still further strengthened by the
creation of a joint police force under International control.

(e) That it would reduce distrust between the parties if each
party agreed not to take further military action without approval
of the Committee or Security Council. (The suggestion may come
better from the Committee itself.)
(f) That they are especially pleased to note the emphasis that has
been placed on a higher restoration of trade and commerce.

4. These points I believe cover the danger spots in any truce
plan. Even if the Netherlands accepts the plan it is my guess that
they might do so with the intention of stalling on a political
settlement. They could then put their trust in the impossibility
of any truce plan working effectively and in cataloguing the
incidents to justify proclamation of military force. In our
proposals I have done my best to safeguard the Republic in this
and other respects but a reply based on our advice to the Republic
would help keep the more dangerous aspects to the fore both here
and in the Security Council.

5. Already Van Zeeland has received a reaction of [feigned]
surprise by the Netherlands to [fr]ustrate the plan. They agreed
with him that the proposals, particularly those in annex 2, would
place the Netherlands in a most difficult situation. According to
his own report however, he stood his ground and pointed out that
the Netherlands must now come out into the open with either
acceptance or a clear statement of objections so that the
Committee will know exactly where it stands.

6. Since the presentation of the paper and Van Zeeland's talk,
there has been a perceptible change in the Dutch attitude. The
Netherlands Ministers who have been inclined to avoid the
Committee are now only too glad to talk the matter over informally
with us tonight. Graham is jubilant but I fear prematurely. The
next few days should be crucial and I shall endeavour to keep you
fully informed.

7. The Madura party has not yet reported on their enquiry [5] but
it is now clear that considering the Republican difficulties in
the island we shall have a good 2 to 1 majority report. I have not
pressed for its early completion because of its possible effects
on our latest vital document. The Committee informed the parties
yesterday that it wishes to extend two further enquiries as early
as possible. These are Bandgarnegara as suggested by the
Netherlands, and Rawahgede in the area of Krawang as suggested by
the Republic. The latter enquiry should be particularly fruitful.