My telegram 162. [1] Although Linggadjati Agreement confirms the
sovereignty of the Netherlands during the transitional period the
Republic wants to continue its international adventures which are
based on political relations with certain Asiatics (mainly India
and Egypt) and with Communist centres in Australia and Singapore
(and possibly United States).

2. Up to the present they have refused to agree to general
economic measures and restoration of property to non-Indonesians
owners of estates, factories etc. The current smuggling of estate
products and other looted property apparently is one of the main
sources of income for the Republican authorities and their armed
bands, although profit in foreign exchange and returned goods is
far below the value of exports. Reports of wholesale embezzlement
in Singapore and India by agents of the Republic are frequent.

Certain shady characters like the Australian Communist, Campbell,
and Singalese newspaperman Thambu act as Representatives of
Djokjakarta.

3. The Republic hesitates to accept necessary assistance of the
Netherlands in variety of services, because they know that many
bad practices will come to light and that several incapable people
in high places will have to be dismissed. on the other hand there
is a growing repugnance among the better class Indonesian
officials against fraud and the amateurish way in which the
business of the Government is being conducted and an increasing
unrest among the population who have to furnish armed bands with
food and other expenses and who experience only a continuous
deterioration in return.

4. It seems impossible to come to rational execution of agreement
without a certain pressure from outside. The Netherlands
Government have unconditionally decided to put the Linggadjati
Agreement into effect whether with the Republic or with other
organised groups. A fairly complete scheme has been drawn up for
this purpose and was handed over to the Republican Delegation
today. [2] It is however essential that they act quickly because
otherwise the rehabilitation of the country will become an
insoluble problem due to the increasing chaos and rapid decline of
production, machinery and capacity. Any further concession in the
direction of immediate independence would simply mean perpetuation
of decay.