Analysis of the recent developments here suggests that the Dutch
policy as planned by Van Mook may be as follows
(1) The Dutch have no intention of making any concessions to reach
a political settlement with the Republic. They will represent
breakdown in talks as resulting from the Republic's refusal to
accept the sovereignty of the Netherlands and therefore a refusal
to accept political agreement in terms of the Renville principles.

(2) When Good Offices Committee reports to the Security Council
either admitting failure or requesting power to press its own
proposals, the Netherlands will oppose extension of the powers
using the old argument of sovereignty and insisting that the
dispute is an internal matter. As a last resort they would rely on
the French veto.

(3) Pressure on the Netherlands by the Council, and by Australia,
India, America, etc. outside the Council, could be used by Van
Mook to overcome political and constitutional difficulties in the
Netherlands which stand in the way of any sort of settlement in
Indonesia. (There appears to be a large body of opinion in the
Netherlands which is anxious to retain tight control of Indonesia
and which will probably hamper Van Mook's personal plans for the
United States of Indonesia).

(4) These pressures together with pressures from his 'Provisional
Government' will be used by Van Mook to justify the transformation
of the Bandoeng Conference, which is to meet on May 27th (see my
telegram K110 [1] paragraph
2) into a Constituent Assembly.

(5) This Constituent Assembly which is under Dutch championship
and control will then draft a constitution for a United States of
Indonesia and a Union with the Netherlands satisfactory to the
Dutch. This will obviate the need for a round table conference on
union.

(6) The Constituent Assembly will also arrange for a provisional
parliament. Both the interim Government and the United States of
Indonesia will therefore be formed without the Republic.

(7) The blockade of the Republic will continue and anti-Republican
propaganda intensified in an endeavour to break the Republican
Government.

(8) The Dutch will endeavour to withdraw from the limelight and
emphasize that any conflict is between the Republicans and other
Indonesians. Such a situation would make it easier to justify
military action as a means of restoring law and order. I feel
however that the Dutch believe they can get their way without
military action particularly as the latter involves a risk of
Security Council action.

(9) The Dutch have set up a precedent for the reestablishment of
self rulers by arranging for three cornered agreements in East
Indonesia between the State, the Sultans and the Netherlands.

These agreements leave the sovereignty with the self rulers except
for such special matters as foreign affairs and provide for the
union as a last court of appeal in the event of disputes.

According to this analysis the Bandoeng Conference is the key to
Dutch policy. It is significant that this morning the Dutch by
decree number one of the 'Provisional Government' banned the
National Front Conference which Republican supporters were to hold
in Batavia next week as a counter to the Bandoeng Conference (see
my telegram K111 [2]).