My telegram [174]. [1]

Palace opinion (Van Mook and associates) has definitely hardened
into regarding Indonesian reply as unsatisfactory, and
Schermerhorn and Van Poll now understood to share the same view.

Schermerhorn told U.K. Consul-General yesterday that though he had
returned [2] prepared, if not instructed, to persevere with
negotiations and avoid force, now he had been sadly disillusioned,
principally by intercepts of Republican messages which convinced
him of absence of good faith on Republican side. There were thus
two remaining alternatives: getting out altogether or taking
strong action, of which the former was not to be thought of. He
thought that any military action taken would be conducted in as
humane a way as possible avoiding bloodshed if possible. He
secretly confirmed recent hints that a substantial fifth column
exists in the Republican camp which is prepared to co-operate with
a Dutch move in the interior.

Today's press quotes Commission-General spokesman as saying that
it is not yet certain whether Commission-General's advice to Dutch
Government will be ready before cabinet meeting next Monday.

The present situation is thus distinctly unpromising.