Rumours are widespread that the Americans have proposals for the
political settlement based on our original proposals but with
provision for an interim federal government before a Constituent
Assembly is set up. Rumours emphatically denied by the Americans
who stress the importance of giving the Netherlands full
opportunity of submitting their own proposals. If the latter are
unsatisfactory or not forthcoming within a reasonable period the
Americans will doubtless make suggestions. [1] Unofficial reports
from The Hague of the intended Netherlands proposals indicate they
will be entirely unacceptable to the Republic. Hatta has informed
the Americans that with the deterioration in internal conditions
the margin for concessions by the Republic is now very small. I
believe an appointed interim government as part of an overall
scheme would be acceptable to the present Republican government
providing it could appoint at least 50% of the members and that
the new government were given wide powers, including control of
the armed forces, in Indonesia.

2. The Masjumi Council after a special meeting on the 4th and 5th
September issued a resolution which amongst other things
a) opposes communism and imperialism;

b) supports a strong policy by the government against peace
disturbers;

c) recognizes the private rights of foreigners but also the right
to nationalize industries important to the State;

d) advocates extension of Republican foreign relations.

3. Van Mook who is apparently going to Holland at his own request
is considered by Hatta more liberal than The Hague but is
nevertheless opposed to elections in Indonesia.