INDONESIA

Request from the Federalists for information regarding the
Netherlands Government's intentions and Cochran's visit have
intensified the search for a way out of the present impasse.

Cabinet is to meet today [1] to decide on the next moves and its
decisions will probably be notified to Cochran tonight.

2. The Dutch have latterly tended to leave the initiative with the
Federalists who appear to be gaining the status of the third party
in the triangular negotiations. Moreover the Dutch have been
hampered by the anomaly they have themselves created, on the one
hand treating the Republic as having ceased to exist as such and
on the other implicitly recognising Republican power by their
hesitation to release leaders. There is however growing
realisation of the fact that the Republicans can justify their
non-acceptance of a cease-fire on the grounds that until the Dutch
observe the terms of the resolution [2] the Republicans can hardly
be expected to use their authority to stop guerilla activities.

3. Despite Government denials (my telegram 12 [3]) reports that a
new Dutch plan will be produced continue to circulate. A more
likely development appears to be a modified application of the
present plan [4] possibly with the omission of interim period in
the transfer of sovereignty.