Bad communications are restricting reports on the Madiun
situation. There has been no major fighting yet. The Government
forces are still converging on Madiun where they are trying with
some success to force the Communists to concentrate. There is
still no reason to suppose the Government will not be able to
handle the situation though it may take at least another two or
three weeks.

2. Even if the Madiun trouble is settled quickly and the Communist
leaders cap-tured, dissatisfaction in the Republic is likely to
break out again unless its two major causes are dealt with
speedily, i.e. the economic shortages and the absence of a
satisfactory political settlement.

3. Djokja is outwardly quiet but I gather there are a number of
ripples, mostly political, beneath the surface. Apparently there
are still some who oppose drastic action against the communists on
the score that Indonesians should not fight Indonesians.

4. Netherlands authorities appear to be icy cold on the American
proposals and there is not yet an official Netherlands response.

Nevertheless there are signs that American and other pressures are
being felt. The Hague cabled that it expects to be able to make' a
substantial contribution' by October 1 and the Netherlands
authorities have formally put off for at least a week the eviction
of Republican families from Batavia.

5. At the request of the Americans the Republic has agreed to
refrain from reporting its complaints' to the Security Council
until the end of the month. The Netherlands comments to the
Security Council on the Republican report [2] are intemperate and
include no evidence in support of their assertions. The Republican
case is supported by the previous reports of the Committee.