We have now reached a crucial stage in the negotiations. The
purpose of this letter is to outline briefly the main developments
of recent weeks, including my interpretations and to pass on to
you copies of two interesting confidential documents. The first is
a letter from Hatta to Cochran [1], the second a memorandum from
New York setting out the State Department's views on some
Republican objections to the Cochran plan. [2] Hatta's letter in
particular will give you a valuable insight into the present
situation.

2. As you know, Cochran has been handling recent negotiations on
his own. This is a realistic appraisal of both the importance of
State Department policy and the difficulties of obtaining
definitive action in a Committee on which the Belgian member works
in close co-operation with the Netherlands. The result, however,
is to make it difficult at times to keep you fully informed, since
the Netherlands have imposed restraints on Cochran concerning the
confidential nature of their documents. This explains why it took
me some time to obtain a copy of the Netherlands amendments to the
Cochran proposals.'
3. It appears that the first Netherlands reply to the Cochran
proposals not only provided for a large number of amendments but
also stipulated a number of impossible conditions of the 'have you
stopped beating your wife' variety. [4] I also suspect that there
was no clear indication as to whether the Netherlands were
prepared to accept the Cochran plan as a basis for resuming
negotiations. Cochran refused to transmit this reply and pressed
for a number of elucidations and modifications. After a delay of
ten days the reply, which is set out in my telegram No. K.178, was
finally delivered.

This reply included exactly the same amendments to the Cochran
plan as the originally intended reply but the covering notes were
described by Cochran as 'a very great improvement'.

4. The Republican response to the Netherlands reply was handed to
Cochran at mid-day on Friday, 22nd October, and appears to have
given him considerable satisfaction. A copy is attached. [5]
Cochran transmitted this response to the Netherlands the same
evening, together with a personal note in which he gave his own
assurance that the Republicans were making every effort to resume
negotiations in a satisfactory atmosphere. [6] Cochran was also
pleased by an Order of the Day given by President Sukarno that the
Army should safeguard the Truce Agreement.

5. Under the pressure of Cochran's presence, Schuurman, Acting
Vice-Chairman of the Netherlands Delegation admitted the
Republican response was encouraging, but the Dutch, already
committed to a policy of refusing to negotiate because of alleged
Republican breaches of the Truce, showed no enthusiasm for the
President's Order of the Day. They had prepared, no doubt
considerably in advance, a strong press statement for the occasion
of the Republican reply. Cochran's informal efforts prevented them
issuing it but did not prevent an official communique which
included the following- 'While Sukarno in an Order of the Day
stressed the necessity of the observance of the Truce, at the
moment there are no guarantees that this will indeed be lived up
to.'
6. On the day following the receipt of the Republic's reply the
Netherlands made further efforts to sabotage the resumption of
negotiations. Notwithstanding their agreement in their reply to
Cochran to meet the Republican condition that civil servants would
not be evicted from Batavia they issued eviction notices to five
Republicans, including Colonel Simatupang, Republican Chief of
Staff, the main Republican military delegate on the Security
Committee. According to Republican authorities the five people
concerned have not been engaged in subversive activities. At the
same time four other Republicans in Batavia were allowed to stay
on only on the condition of signing a guarantee that they would
not assist the Republic. So far informal efforts have not
succeeded in having the Netherlands withdraw the notices. The
Committee has followed up the informal approaches with a strong
letter seeking reconsideration of the decision.

7. Strangely enough the Netherlands found it necessary to submit
the Republican response to the Cabinet which met at The Hague on
October 27th. The Netherlands Cabinet decided the Republican
response was unsatisfactory, particularly with regard to the
Netherlands requirement that the Republic should implement the
military and economic clauses of the Truce. My experience here
leads me to believe that no Republican reply on this point would
have been considered satisfactory at this stage. The Netherlands
therefore sent a letter to Cochran asking for further Republican
assurances regarding implementation of the Truce. [7] Cochran is
taking this letter to Hatta today.

8. The same Cabinet meeting decided to send Stikker to Indonesia.

He left the following day and will arrive here on Sunday, October
31st. Beyond the fact that he wishes to see Hatta and that he
claims he is seeking a resumption of the negotiations, I know
nothing definite about the purpose of his visit. The official
press release, the sentiments of which have been confirmed by
Stikker himself, is enough to give every cause for alarm. In full
I quote-

'In view of the increasing unrest in Indonesia which causes great
anxiety to the Government, the Cabinet has decided that the
Minister of Foreign Affairs, Mr. D.U. Stikker, LL.D., will leave
for Indonesia today. The object of this visit is on the one hand
to become acquainted locally with the extent and gravity of the
alarming situation, on the other hand, without personally
undertaking the conduct of the negotiations possibly to be
resumed, to try to promote the possibilities of this resumption.

In case the negotiations could be resumed-and the Government wants
to do its utmost for achieving a satisfactory solution by sending
once more one of the members of the Cabinet-in the first place
compliance with the Truce and a speedy resumption of the goods-
traffic have to be effected. The intention is that Minister
Stikker's visit will be of only short duration, probably not
longer than ten days in Batavia.

A month ago Minister Stikker visited the American Secretary of
State General Marshall for a discussion of the problems of the Far
East. Recently in Paris he was able to exchange views about this
same subject with several of his foreign colleagues.'

In passing you will note the last paragraph is a gratuitous effort
to implicate the United States. References such as this, inferring
that Netherlands policy has the backing of the United States are
appearing regularly in the press now and are infuriating the
Americans. The full importance of the above press release can only
be appreciated in relation to the fierce publicity campaign which
is now being directed to proving that the Republic is either
unwilling or incapable of maintaining the Truce.

9. The campaign is reaching a peak. Here is a sample of today's
press reports-'Netherlands political circles generally consider
Minister Stikker's trip as a last attempt to put an end to the
almost impossible situation in some parts of Indonesia. It is
generally accepted that a different line must be followed than we
have done so far to make the Republic resume negotiations.'
10. You can draw your own conclusions but it seems to me there is
little prospect of the talks being resumed, that an ultimatum will
be given to the Republic and that there is every prospect of a
police action within a few weeks. The logical time for such an
action would be mid-December when the Assembly finishes and when
there would be a period of about two weeks in which it would be
impossible to call the Security Council together.

11. The Netherlands campaign hinges on accusations that the
Republic is responsible for the infiltration into West Java of
armed bands totalling 11,000. These allegations are not supported
by the facts as I know them. Sjahrir, for example, will admit
there are some infiltrations and points out that many are
civilians seeking to return to their homes in West Java. He
further admits that some armed bands have infiltrated but stresses
that the number would not be more than 1000 and that the movement
does not have the approval of the Republican Government. Possibly
many of the armed bands are Lasjkars, irregular units formed by
Sjarifuddin when he was Minister for Defence. In any event our
Military Observers report that infiltrations in recent weeks have
practically stopped, while I am convinced the Republic is doing
everything possible to maintain the Truce so that negotiations can
be resumed in a satisfactory atmosphere.

12. In an effort to prick the bubble of Netherlands propaganda I
am endeavouring to have the Committee issue factual statements on
the military observation of the Truce, but obtaining Herremans'
assent is a slow and devious task.

13. Clearly every effort must be made to settle the dispute with
the assistance of informal American pressures. I can assure you
that both Cochran and myself have maintained our best efforts to
this end. However, a realistic appraisal of the situation shows we
are almost certain to fail. The Netherlands, by their commitments
to the Federalists, by their activities in their parliament and by
their propaganda have, to all intents and purposes, made a real
settlement impossible.

14. It must also be borne in mind that a report to the Security
Council offers the simplest way of combating the provocative
propaganda of the Dutch. If we delay in preparing our report it
may be too late to make even a feeble protest before a police
action. At any rate while hoping for the best I am preparing for
the worst. It would be less than realistic not to consider the
action Australia would take in the event of a complete breakdown
in the negotiations. I believe it would be profitable to have
detailed talks with the State Department on this end to consider
the possibilities of a U.N. trusteeship of the Republican areas or
a direct recognition of the Republic. This much is certain, if
there is no settlement and no police action, something must be
done about economic conditions in the Republic. It would not
surprise me if the Republic made a last appeal for recognition and
help to neighbouring countries such as India, Burma, Ceylon, Siam,
the Philippines and Australia.

15. Cochran impresses me as making sincere and strenuous effort to
obtain a fair settlement, but an impression is also gaining ground
that the State Department is more concerned with the U.S.

reputation in this area than with a satisfactory agreement. It
would not surprise me if the Americans seek to get out from under
a situation which is becoming impossible and justify their failure
before the world by the Cochran proposals.

16. If we, or rather Cochran and the Americans, are successful in
having the negotiations resumed, the objective will be to avoid an
immediate deadlock and seek a breathing space of a couple of days
in which to improve the atmosphere of the talks. This would
probably be a last opportunity to seek a compromise fair to the
Republic. I must stress, however, that the political situation
inside the Republic would not permit Hatta to make substantial
concessions away from the Cochran proposals no matter how
desirable they may appear.

17 Undoubtedly the major Dutch objections to the Cochran plan
centre around the elections. Narayanan, principal Secretary of the
U.N. Secretariat to the Committee who has just returned to
Indonesia via The Hague reported to me a personal conversation he
had with Prime Minister Drees. Drees made the following points:-

1. The Dutch are afraid of their position in Indonesia which they
consider seriously endangered by the hostility of the Republicans.

2. They regard co-operation between Holland and Indonesia as vital
to Holland's economy and stability.

3. They are afraid of losing elections and are not prepared to
agree to the fixing of a date for elections until they are
reasonably assured of their position in Indonesia.

4. Any settlement in Indonesia must provide safeguard for the
Federalists who have cooperated with The Hague.

5. The Dutch are therefore determined to set up an interim
government which will provide opportunities for the Federalists.

If the Republic will come in so much the better, if not this
interim federal government will be set up without the Republic.

6. The Netherlands appreciate that a stable government in
Indonesia is unlikely without the Republic.

7. At the same time the Republic is weakening and cannot last much
longer.

8. Drees gave four reasons why the Dutch were anxious for a quick
settlement-
(a) Moral (influence of world opinion).

(b) Economic (dislocation in Indonesia and the cost of the army).

(c) Political (Dutch politics will be unstable until a settlement
is achieved).

(d) Military (The Western Union and the Americans have been making
demands for a Dutch Army in Europe. Holland has approximately
130,000 troops in Indonesia (including Netherlands Indies troops)
but only approximately 2,000 in Holland).

9. Finally Drees admitted that colonialism is dead and that there
would have to be a new policy in Indonesia. He stressed however
that the Dutch could and would only give up gradually.