Attached is a rough translation of a copy of the informal
proposals for an early transfer of Sovereignty, which I have
referred to in my recent telegrams. [1]

The proposals are attributed to East Indonesia, but the initiative
was almost certainly Dutch.

As expected the proposals envisage the retention by the
Netherlands of wide powers which are inconsistent with a real
transfer of sovereignty. They are, of course, unacceptable to the
Republican leaders.

ENCLOSURE

TOP SECRET

NOTE OF EAST INDONESIA CONCERNING A POSSIBLE TRANSFER OF
SOVEREIGNTY AT SHORT NOTICE

INTRODUCTION

1. It should be understood in advance that no proposals for the
settlement of the Indonesian issue can achieve satisfactory
results unless they are acceptable to the majority of the
Indonesian people.

2. It is therefore essential that an attempt should be made to
achieve concurrence between the leaders of the B.F.O. (Federal
Consultation Conference) and leading personalities and government
members from Republican territories.

3. In its mid-January session, the B.F.O. announced that
consultation with prominent people from Republican territories,
notably from among Republican Government circles, is essential.

The term 'prominent people' was meant to include in the first
place Republican government members who, owing to certain
circumstances, at present are not in a position actually to
exercise their administrative authority.

4. These Republican leaders appeared to be in principle not
disinclined to enter into consultations, provided the B.F.O.

should be prepared to acknowledge their status as the Government
of the Republic, while on the other hand they made known that they
refused to enter into consultations as mere prominent individuals
(Sultan of Jogja).

5. This puts before the B.F.O. the following alternatives:

a. to give up consultation with those 'prominent people',
consultation with whom they had considered desirable in their mid-
January meeting, and to proceed without them to the formation of
an interim federal government. In that case the interim federal
government would have to proceed to an early constitutional
organization of the former republican territories which, for
several member states would constitute an unacceptable solution;

b. to try to meet the wishes of the prominent Republicans so that
consultations can immediately be started and a solution perhaps
found.

6. The Government of East Indonesia thinks that the second
alternative (sub b) should be chosen.

7. It has arrived at this choice on the following grounds:-

a. formation of an Interim Federal Government, which could not
nationally or internationally be regarded as expressing the
general aspirations of the entire Indonesian nation, has no sense
and would do more harm than good for a settlement of the
Indonesian issue.

b. For the formation of an Interim Federal Government which would
be acceptable nationally as well as internationally, the co-
operation of prominent leaders and government members from the
Republican territories is fundamentally essential;

c. The only leaders from Republican territories who are at the
moment available, are the most important members of the Republican
government. These leaders have gained international recognition
and are in wide circles in federal territory (specifically in East
Indonesia) regarded as leaders and government members of the
Republican territories.

d. If the B.F.O. does not wish immediately to have to face
unacceptable consequences, it will have to go to some pains to
meet the desires of the 'prominents' from Republican territories,
whose wishes are congruent with the international views and
opinions nursed in wide circles among the population in federal
territories.

8. The Government of East Indonesia is of the opinion, that the
B.F.O. should meet the expressed wish of the 'prominents' from the
Republican territories, by issuing a statement to the effect that
it is prepared as a body to regard these 'prominents' as
government members of the Republic, representing the Republic.

9. By this means the B.F.O. would ensure, among several essential
conditions:

a. that the federal principle of equal position and equal rights
for the member states (component regions) remains undisputed.

b. that the popular will should in the end determine the status of
the Republic as well as the manner in which it shall be
incorporated in the future sovereign and free U.S.I.

10. A statement to the same effect by the Netherlands Government,
preceding or coinciding with the statement of the B.F.O., would
probably immediately open the way to a contact with Republican
leaders, as desired by the B.F.O.

11. It would be incorrect and might even prove fatal if the B.F.O.

should, prior to such contact, officially commit itself to a
different, concrete and detailed plan for an early transfer of
sovereignty (the B.F.O. till now has accepted the B.I.O. Decree
[2] as a starting-point). This would create an ultimative
impression.

12. It would be better if a commission appointed by the B.F.O. to
establish the initial, tentative contact with the Republican
leaders, were to approach them with regard to such a plan. If
during the tentative conversations they should appear willing to
co-operate in this plan, then the B.F.O. after having discussed
the report of its contact commission could immediately adopt a
resolution relating to such a plan.

13. By that time the B.F.O. may have learned whether the
Netherlands Government would be prepared to co-operate to
implement such a plan.

14. In the second stage, that of consultations between the B.F.O.

and the Republican leaders or government members (the so-called
Indonesian conversations which the B.F.O. considers necessary for
a settlement of the Indonesian issue), a plan for accelerated
transfer of sovereignty could be discussed and elaborated in
concrete and in detail.

PLAN FOR TRANSFER OF SOVEREIGNTY AT SHORT NOTICE
15. Before the beginning of the first session of the B.F.O. in
July 1948, a note [3] had been drafted on behalf of the Government
of East Indonesia, in which was developed a plan for a speedy
transfer of sovereignty. At that time a different solution (viz.

early establishment of an Interim Federal Government, envisaged in
the Bandung Resolution [4], etc.) was more favoured, so the East
Indonesian plan was not placed on the agenda. The note of the East
Indonesian Government has, of course, to be viewed in an entirely
different light now as the political situation has greatly changed
since then. But this note may still serve to indicate the
possibilities of an immediate transfer of sovereignty to a
National Indonesian federal government, and therefore the note is
attached as an appendix.

16. In this plan it is assumed that transfer of sovereignty at
very short notice would be feasible if all efforts were
immediately concentrated on the formation of a national Indonesian
federal government for the U.S.I. which, though of a provisional
nature, could immediately take over sovereign powers.

17. This Government would not have to pass through an interim
period, in which it would attend to internal Indonesian affairs so
far as possible and make preparations for the transfer of
sovereignty. It would instead have to take over sovereignty
immediately, and in a provisional bilateral treaty, to be signed
simultaneously, undertake to provide for numerous matters, that
have to be liquidated or developed in cooperation with the
Netherlands.

18. This conception would therefore imply that a great many
preparations for the transition to a definite new legal order
would have to take place, not during an interim period, but after
the transfer of sovereignty, and under the provisions of a
provisional bilateral treaty which would afterwards be replaced by
a final statute or by final treaties.

19. It could be assumed that the Netherlands would be prepared to
accept this conception if the following items were dealt with in
the bilateral treaty:

1. the creation of a Netherlands-Indonesian Union;

2. safeguarding of Netherlands and foreign interests, notably
those in the sphere of financial and economic affairs;

3. the requirements relating to the democratic and federal
structure of the U.S.I. from which should result respect of
fundamental rights and the rights of the racial groups, and
personal and material integrity.

4. the liquidation of the military question.

20. The note referred to in paragraph 15, included an outline of a
provisional bilateral treaty to be concluded between the
Netherlands and the U.S.I. This outline does not pretend to treat
the matter under consideration exhaustively, and will doubtless
require reconsideration or supplementation in all kind of matters.

It is pointed out perhaps superfluously, that the contents of the
bilateral treaty will be laid down later in consultations between
the Netherlands Government and the representatives of the
territories which will participate in the future sovereign U.S.I.

Therefore notice should be taken in the first place of the latest
political developments in the Indonesian question.

The outline referred to reads as follows:

21. OUTLINE OF A TREATY BETWEEN THE NETHERLANDS AND THE USI
Nature of the treaty
1. The treaty has the nature of a basic agreement. It remains in
force and binding on both parties insofar and as long as no
subsequent treaties have been concluded by the parties, with
regard to the subjects it covers.

Elements of the Treaty
2. The Treaty shall provide for the immediate establishment of a
Netherlands-Indonesian Union founded upon the basic principles
laid down in the Linggadjati Agreement [5] and the Renville
Principles. [6] It shall also contain preliminary provision
concerning the function and organization of the Union. It shall
arrange for the institution of High Commissions in the Netherlands
and in Indonesia as organs of either treaty party in the territory
of the other, and eventually as Union organs.

The Netherlands High Commissioner shall have, beside his Union
functions, also the functions resulting from the treaty.

3. The U.S.I. shall give the respective racial groups the
opportunity for self-determination in a democratic way on the
basis of provisions to be laid down jointly by the parties.

4. The U.S.I. will guarantee the fundamental rights and liberties
laid down in the United Nations Charter.

5. The constitutional structure of Indonesia shall be founded on
the principles of federalism and democracy.

6. The Constitutional structure of the U.S.I. shall contain
guarantees for a proper administration of justice under the
ultimate supervision of a Federal Supreme Court, with the
understanding, however, that this supervision does not necessarily
imply the power to test legislation of the U.S.I. or of the member
states on the federal constitution.

7. The U.S.I. acknowledges that the status of the principalities
within the federation shall in first instance be determined by
regulations to be drawn up by the individual member states in
whose territories the principalities are situated with the consent
of the Crown. [7]

Pending such regulations the existing regulations will remain in
force.

8. The constitutional structure of the U.S.I. shall contain
safeguards for minority rights, which include also constitutional
rights as well as the right to a separate cultural life.

9. Pending the establishment of independent Indonesian
representation abroad, the Kingdom organs shall attend to the
interests of the U.S.I. with due consideration for the treaty
provisions. The establishment and organization of independent
Indonesian representations shall be done in co-operation with the
Kingdom.

10. The U.S.I. shall take over all financial and economical
obligations of the Netherlands Indies Government, and also those
of the Netherlands Government which have been contracted on behalf
of Indonesia. The U.S.I. shall institute a proper financial and
economic policy, and shall guarantee the rights of Netherlands and
foreign corporate bodies. Pending further rules and treaties for
the elaboration of the abovementioned obligation, the Netherlands
and Netherlands Indies laws governing this subject will remain in
force as U.S.I. laws, subject to the possibility of modifications
mutually agreed to by the treaty parties. However, these laws will
not be implemented through Netherlands and Netherlands Indies
organs, but the U.S.I. shall set up its own organs, which in
exercising their authority are subject to agreement with the
Kingdom High Commissioner for Indonesia.

11. Pending the issue of rules and conclusions of treaties
concerning the nationality of U.S.I. citizens and of the rights
granted by either party to the nationals of the other party, the
existing Netherlands and Netherlands Indies laws are to remain in
force, on the understanding that the U.S.I. organs in charge of
the implementation of those laws for non-Netherlander Dutch
subjects, shall be appointed by the U.S.I.

12. a. Existing international obligations contracted by the
Kingdom with respect to military assistance, relating to U.S.I.

territory, shall, pending regulations for taking over the
obligations by the U.S.I. be acknowledged by the latter and be
fulfilled by the Kingdom with regard to U.S.I. territory.

b. Pending the formation of U.S.I. armed forces and regulations
for eventual co-operation in defence matters between the treaty
parties, the U.S.I. shall not declare war nor make peace except in
concurrence with the High Commissioner of the Kingdom.

c. The Kingdom is bound to co-operate in the organization of a
separate Indonesian naval force, an Indonesian national army and
an Indonesian air force.

d. Pending the formation of the armed services referred to under
c, pending the creation of rules and treaties referred to under a,
the High Commissioner of the Kingdom shall be supreme commander of
all Kingdom land and naval forces present in U.S.I. territory. The
strength of land and naval forces present at the time of the
treaty is signed shall be made known to the U.S.I. Government.

This strength may be modified by agreement of the parties, in
which due consideration should be given to the obligations
referred to under a. The U.S.I. can request the High Commissioner
to put these forces, entirely or partly, at their disposal.

e. Pending the issue of rules and conclusion of treaties
concerning the transfer to the U.S.I. of control of the federal
forces for maintenance of internal peace and order and for
national defence, the prescriptions related to the employment of
these forces shall without modification remain in force as U.S.I.

prescriptions, on the understanding that (except in the case of
the provisions laid down under d, the words 'Governor General'
shall be substituted by the words 'the High Commissioner in
concurrence with the Government of the U.S.I.' and, furthermore,
that instead of the authorities mentioned therein there can be
appointed other authorities subject to agreement with the High
Commissioner.)
ARBITRATION
14. Differences between the treaty parties with regard to the
interpretation and implementation of this treaty shall be
subjected to the decision of an arbitration court, consisting of
experts to be appointed by either party on a parity basis. Should
an arbitration court formed in this manner fail to arrive at a
decision, either party shall appoint three non-subject experts,
who shall between them supplement the arbitration court. The
arbitration court in the final form shall decide. The decision of
this arbitration court is binding.

15. The treaty shall be initialled by the governments of either
party and shall be ratified when the latter have been authorized
by law to do so.

22. If the plan for acquiring an early transfer of sovereignty
should be accepted and effectuated, it is necessary as soon as
possible to proceed with the formation of a national federal
government, which at the time of the transfer of sovereignty shall
assume the rule over the U.S.I. and shall sign the provisional
treaty referred to under paragraph 17, as a qualified treaty
partner.

23. In order to achieve such a government, it is advisable:

A. as soon as possible-if possible as early as on March 1-to
establish an Interim Federal Government, adopting the B.I.O. as a
starting-point, which interim government should concentrate
specifically on preparations for an early transfer of sovereignty
rather than on administration during the interim period, i.e. on
preparations for a provisional agreement with the Netherlands, to
be signed simultaneously with the transfer of sovereignty; or
B. as soon as possible to form a national federal government,
which shall enter office at the time of the transfer of
sovereignty, shall sign the treaty, and assume authority. This
will therefore be the first government of the sovereign and
independent U.S.I. In this case the preparatory activities which
under the solution Sub A would be carried out by the interim
federal government will be effected instead by representatives of
the federal territories and of Republican territory in
collaboration.

24. Whichever of the abovementioned alternatives should be
adopted, it shall in any case be necessary to set up a commission
to draw up a provisional treaty in co-operation with the
Netherlands Government.

25. It appears advisable in case of adoption of a plan of this
kind, immediately to fix a time schedule, setting a fixed date for
the transfer of sovereignty, e.g. on April 15, 1949. At the latest
by that date the formation of a national federal administration
shall have been completed and a draft provisional treaty shall
have been prepared.

26. Furthermore a period shall have to be defined within which
must be achieved the substitution of the provisional treaty by a
final treaty. This period would eventually be from April 15, 1949
till January 1, 1950.

27. The duration of such period must not be unilaterally made
subject to the achievement o[r] non-achievement of an agreement
with the Netherlands with regard to the Union in particular, and
with regard to financial, economic and military questions in
general.