The atmosphere in Indonesia is deteriorating rapidly. Internally
the Hatta Government is subject to increasing pressure from the
left which is capitalising on the lack of any indication of
American help for the Republic. The left wing parties are
advocating acceptance of the Russian offer [1] and a firmer policy
towards the Dutch, including the rejection of Renville and the
continuation of the revolutionary struggle.

2. Events of the last ten days such as the opium revelations [2]
and the Pegangsaan shooting [3], and the events reported in my
telegram yesterday [4] could not have happened at a worse time. A
telegram this morning from Djokjakarta advises of a Republican
cabinet decision that there will be no resumption of negotiations
until Republican house at 56 Pegangsaan East is returned. Reaction
to the ejection from Batavia of Republican civil servants and
their families will be no less strong.

1 See Document 149.

2 The Federal Indonesian Police had claimed the involvement of
senior Republican officials in an opium smuggling plot.

3 A policeman had been killed on 16 August when police and youths
clashed at premises owned by the Republicans in Pegangsaan East,
Batavia.

4 Cablegram K152, dated 24 August and dispatched the following
day, reported that Dutch police had seized the Republican house in
56 Pegangsaan East; that the Dutch had requested all active
Republican officials to remove with their families from Dutch-
controlled territory; and that the NEI authorities had taken over
in Batavia a hospital staffed by Republicans.

3. At a meeting of the Good Offices Committee today when these
matters were discussed I strongly urged that in accordance with
instructions the Committee should report recent developments and
its own impotence to the Security Council and ask for
instructions. The proposal was strongly opposed by Belgium, while
Cochran of the United States asked for a little more time to test
the situation. The Committee will be leaving for Kaliurang on
Wednesday next, so there is no prospect of further action until
the end of next week.