I have the honour to give hereunder a survey of happenings in
Indonesia during the month of January.

2. NEGOTIATIONS. The Commission-General returned to Batavia on the
9th of January and although they issued no statement, their return
and the prospect of an early invitation to the Indonesians to sign
the Agreement eased the tension remaining after General
Soedirman's speech. [1] Dr. Posthuma, the banker and economist,
who has been added to the Commission-General, arrived during the
month, but I understand that he has not yet attended any of the
joint discussions; possibly the arrival of Dr. de Kat Angelino is
awaited before the enlarged Commission-General meets the
Indonesian Delegation. Dr. Posthuma's economic knowledge should be
of great value in settling the arrangements for economic relations
and co-operation with the Republic which will become necessary
immediately after the Agreement is signed.

3. The two Delegations made contact on January 12th, when future
procedure was discussed. Then the Indonesian Delegation left
Batavia for a Cabinet meeting at Djokjakarta. A communique issued
after this meeting stated that Cabinet had decided that the
Delegation 'shall remain entitled to sign the Agreement of
Linggardjati exclusively based on the clauses mentioned in that
document as it was initialled on the 15th of December 1946,
including elucidations, minutes, and official correspondence with
the Dutch Delegation, and not tied down to whatever discussions
and explanations took place at home and abroad beyond the official
contact between both Delegations'. Before signing, and before
submitting the matter to the K.N.I.P. [2], however, the Delegation
was to discuss disputed matters. This communique was not felt to
introduce any further complications into the situation. The
Indonesians, while objecting generally to the spirit of Mr.

Jonkman's speeches [3] and more particularly his references
therein to the Crown and New Guinea, have little objections to the
explanatory memorandum of the Commission-General itself.

4. The two Delegations held a series of meetings beginning on
January 22nd, which were followed by a communique stating that
agreement was reached on the military measures needed to improve
the situation. Demarcation lines are now to be fixed by the
central military authorities, and not the local commanders. The
next series of meetings began on 28th January, and the month ends
without the Agreement having been signed. I am told that the
Indonesians made a formal offer to sign, but that the Commission-
General insisted on the express acceptance of the Jonkman speeches
and the prior issue of a cease-fire order.

5. I understand that the procedure adopted in establishing the
State of East Indonesia without consultation with the Republic has
also been discussed. In this connection it is interesting to note
that the Pontianak Conference [4] has again been postponed to a
date not yet determined.

6. The month has indeed been a month of public debate.

Recriminations and mutual charges of breaches of the truce have
been consistently made by highly placed spokesmen on both sides,
and with considerable bitterness. Some reflections on the truce
itself therefore seem appropriate. Looking back, it is apparent
that the relation between the conclusion of the truce and the
conclusion of the political agreement was that of a vicious
circle-a truce had little chance of being effectively observed and
of being a positive influence for good so long as a political
agreement has not been reached, and equally truly there was little
chance of making a political agreement, dependent for its success
on the goodwill of both parties, until the fighting had stopped.

Whether the truce or the agreement were tackled first, then,
neither had much chance of being successful until the other was
also accomplished, and no matter which problem was dealt with
first some criticism would have been valid. Largely owing to Lord
Killearn's influence the truce was given priority, and the
existence of the truce based on stabilization of the military
positions existing at 14th October 1946 received a very great deal
of publicity. The numerous conferences at all levels both in
Batavia and on the various perimeters, having for their object the
determination of the respective military positions, will be
recalled, but the fact is that the existence of a truce has been
far more theoretical than real. Consequently, as virtually every
military operation by either side, however small, has been able to
be classified by the other as a breach of the truce, the
impression arises that the military situation has been steadily
deteriorating. I think it is true to say that with the exception
of an incident at Krian, to be discussed more fully later, unrest
around the perimeters has been no greater than existed last month.

7. Dutch military communiques report such incidents daily and
invariably specify that they take place within the Dutch
perimeter-Indonesian patrols and infiltrations within the
perimeter have been dislodged, and the like. They went very far,
however, on January 16th when they claimed that at Tjiandjoer they
raided a Headquarters of the Laskar Rakjat (People's Army) within
the perimeter.

8. The battle of words was started at a meeting at Djokjakarta of
representatives of seven fighting organizations on January 7th, at
which Dr. Amir Sjarifoeddin accused the Dutch of provoking the
Indonesian forces and of continuing propaganda designed to prove
that the Indonesians had violated the truce. General Soedirman
added that patience had its limit and urged the continuation of
the struggle. These speeches provoked a sharp reaction from the
Dutch administration and press. The Army information Service
denied any connection between the attitude imputed to military
circles and any feeling against the Agreement among the Dutch, on
the ground that as Dr. van Mook is Commander-in-Chief such
opposition is quite impossible. An official government communique
denied breaches of the truce and added that a complete statement
was being prepared which would show how completely in the wrong
the Indonesians were. This statement was in fact issued on 15th of
January and alleged a total of 350 serious cases of violation of
the truce by Republican fighting organizations. It went on to add
that 'it has undeniably been established that plans had been made
for large scale attacks on Semarang, Buitenzorg and Palembang and
only timely actions by the Dutch troops could prevent them from
being carried out'.

9. On January 12th the Indonesian Minister for information, Dr.

Natsir, accused high Dutch service authorities in Holland of
making speeches 'torpedoing the spirit of Linggardjati' and said
that General Soedirman's speech was a natural reaction to this.

Dr. van de Velde, the Dutch adviser on Sumatran affairs, replied
that whatever mistakes had been made by the Dutch, they did not
give General Soedirman the right to make statements which could be
construed as a signal for general attack. Other Dutch spokesmen
joined in the battle and denied Republican statements that the
deterioration of the military situation was due to Dutch
aggression, quoting captured Republican telegrams and military
reports. And so the unedifying exchange proceeded.

10. The general complaint of the Indonesians is that negotiations
to fix demarcation lines always result, under pressure, to the
advantage of the Dutch, and they appear genuinely to have the
feeling that Dutch military policy is indeed to gradually extend
their territory on all perimeters. The regularity with which Dutch
communiques point out how justified they have been in every action
they have taken, may well cover a bad conscience.

11. The occupation of Krian, which is an important road junction,
and Sidoardjo was an incident which the Dutch considered
sufficiently serious to warrant a visit by Dr. van Mook and the
Dutch Chief-of-Staff to Sourabaya. The official Dutch communique
is very confused, and claims that to counteract the fire on their
posts in the Sourabaya area, Professor Schermerhorn on 18th
January sent an ultimatum to Sutan Sjahrir that counter measures
would be taken unless the shelling ceased by 25th January.

Apparently this demand became known at Sourabaya only on 22nd
January. Meanwhile steps had been taken by Dutch troops which were
countermanded, when the ultimatum became known. The Republican
forces, having learned of the Dutch counter measures began to
evacuate Krian, but first using artillery fire on 23rd January.

Soon after this a Dutch reconnaissance party was sent out and 'as
both Krian and Sidoardjo were evacuated it was decided that these
towns should be occupied'. Even the Dutch press inquired why in
these circumstances the visit of the Lieutenant Governor-General
was necessary. The affair naturally caused the greatest resentment
in Republican circles and they have protested to the Commission-
General. Dr. Sjarifoeddin, the Minister of Defence, stated that
Dr. van Mook and the Dutch Chief-of-Staff had admitted that the
Dutch had gone beyond the demarcation line which they themselves
had proposed, and said that the Commission-General had declared
that all places outside the demarcation line would be returned to
the Indonesians. He urged the Indonesians to adhere [to] their
policy of concentrating on a political settlement and not
distracting world attention by military incidents. The relation of
this incident and the continuing resentment over the Buitenzorg
incident to the present stage of the negotiations is apparent.

12. REPUBLICAN POLITICS. The meeting of the K.N.I.P. has not yet
taken place, having been postponed for various reasons, including
the inability of the members from Sumatra to arrive by the time
first set. On 17th January the Working Committee of the K.N.I.P.

which was attended by 18 of its 25 members passed a resolution
demanding the revocation of the President's decree expanding the
K.N.I.P. The decree itself came as a surprise to Sutan Sjahrir,
and there has been some discussion of what the President's
constitutional powers are and whether the decree is formally
valid; moreover, inexperience and the limited extent to which the
constitution has been put into effect tend to make the handling of
this kind of matter confused; however, the previous optimism that
the K.N.I.P. will accept the Agreement has not been diminished.

13. On his return to Batavia after the Cabinet meeting, Sutan
Sjahrir said that the budget for 1947 had been discussed. Sumatra
would not be included, as too little information was available.

Limitation of the armed forces and retrenchment of subsidiary
forces was contemplated, with the object of confining military
expenditure to 30%. The remaining 70% would go to education and
public works, with great stress on irrigation projects. He added
that elections had taken place in 3 districts and it was hoped to
hold general elections before the end of the year.

14. EAST INDONESIA. Mr. Soekawati, the Head of the State,
accompanied by some of his Ministers, has made an extensive tour
of the Negara and has now gone to Holland, intending to return to
Makassar late in February. Mr. Soekawati said that his main
impressions after his tour were of the tremendous destruction
which had occurred in many areas, of the need for the widest
possible spreading of information about the new constitutional
structure which is little understood, and of the need to induce
the population to abandon its present attitude of unwillingness to
work. The Cabinet met on January 24th and decided that all
official publications relating to East Indonesia should be put out
by the N.E.I. Government information Service. The Republican
newspaper 'Merdeka' has been banned, and it has been found
necessary to drop pamphlets containing a seventy-two-hour
ultimatum to put an end to the destructions of bridges and
constructions of road blocks. Instruction is being given by the
N.E.I. Government to the establishment of a new Government
Commissariat for East Indonesia to expedite the transfer of
authority from the Central Government to the new State.

15. On 6th January the Supreme Council of Bali discussed the
reorganization of the Supreme Council and the Lower Council. The
former is to consist of 34 elected and 6 nominated members, and
the latter of two-thirds elected and one-third nominated. By a
decree dated January 18th [the] Lombok Section of the Bali and
Lombok area was made autonomous.