In recent informal discussions in Political sub-committees, the
Netherlands have placed special emphasis on sovereignty as stated
in principle one of the six additional principles. [1] They are
insisting on:-

(a) The abolition of Republic's foreign relations at the time of
political settlement.

(b) The abolition of T.N.I. to begin at the time of political
settlement and to be completed before the delineation of states.

(c) Republic participation in an interim Government over the
powers and composition of which the Netherlands would retain full
discretion.

(d) No guaranteed date for establishment of United States of
Indonesia.

2. These proposals are unacceptable to the Republic which in its
present mood must insist on remaining as a going concern until the
United States of Indonesia is established or until a guaranteed
date for its establishment is given.

3. In sub-committee meetings, Van Vredenburch has not been
prepared to negotiate but has put his terms on a take it or leave
it basis saying that he would return to The Hague for instructions
if the proposals were not acceptable to the Republic. The
Republicans see in the present position a parallel with the events
leading up to police action last year.

4. From the events of the last few days the following moves may be
in process:-

(a) unreasonable requests for Republic to abolish itself,
(b) justification for [2] requests by having them accepted by
Indonesians prepared to co-operate (i.e. Bandoeng conference),
(c) public campaign against Republic as consisting of many bad
elements which the good elements are unable to control,
(d) an ultimatum,
(e) 'police action' or creation of a United States of Indonesia
without the Republic.

5. Hatta has expressed complete agreement with proposals outlined
in my tele-gram 106 [3] but as you will see from my telegram K.114
there is at present no prospect of the Committee pressing these in
opposition to the Netherlands. With other members of the Committee
strongly of the opinion that as good officers we cannot even exert
moral pressure there is little I can suggest from here save the
possibility of a minority report [and the] need of changing [the
American] approach. [4]