RETURN TO JOGJAKARTA

Withdrawal of Netherlands troops from the Jogjakarta Residency was
completed on 30 June with only the following minor incidents.

(a) Two Indonesian civilians were shot dead by a Dutch patrol
after one had drawn a pistol and wounded a Dutch soldier.

(b) Republican forces reported having found eight small mines in
the vicinity of the Mosque at Bantoel after the Dutch withdrew.

(c) At Kedaton Plered one mine exploded killing two and severely
wounding two other civilians after the Dutch withdrew. Five other
mines were discovered in the same locality and viewed by Military
observers.

(d) Two Indonesian civilians, who failed to stop when called on by
a Dutch patrol, were fired on by a Vickers. One was killed and the
other wounded.

Brigadier Prior strongly protested to the Dutch Commander about
the two latter incidents. He succeeded in having the Commander
order that all areas be cleared of mines prior to the withdrawal
of Dutch troops.

2. Prior and the American members of the Milex Board felt the
Dutch troops were looking for trouble and would have welcomed an
excuse to start an action and thus delay the evacuation. I believe
that the presence of the senior military observers, and
particularly the firm line taken by Prior with the 'bitter'
Netherlands Commander, helped considerably in achieving a
relatively uneventful withdrawal. TNI troops now control the city.

Prior estimates that about 3,500 came in-barefooted and without
uniform but armed and apparently well disciplined.

3. Lt. Colonel Suharto, who will be responsible under the Sultan
for the maintenance of law and order in the Residency, is
confident that the TNI can handle this task. He expects, however,
incidents on the borders of the Residency from both Dutch and
dissident Indonesian elements. Simatupang, who has arrived in
Jogjakarta, is pessimistic about the possibilities of cooperating
with the Dutch. He explained to Brigadier Prior that he had just
come through a small village of 35 houses, where all male
inhabitants, old and young, of 34 of the 35, had been killed
during the last 6 months. 'How, can we' he said 'cooperate after
these experiences.' Simatupang's view outlines the basic
difficulty the Republican leaders and the Commission will face in
the near future.

4. The Sultan of Jogjakarta is keeping a firm control over the
people in the city. At his suggestion the Republican leaders
intend to return on 6 July and the Commission has been invited to
attend the reception which will be given on that day by the
Republican Government at the palace of the President.

5. To contact and bring members of the Republican Emergency
Government back to Jogjakarta as soon as possible after the
restoration, a Republican mission headed by Leimena and
accompanied by a military observer will leave for Bukit-Tinggi on
3 July.

THE ROUND TABLE CONFERENCE
6. The target date for the Conference at The Hague remains 1
August, but I doubt whether this date can be met. The inter-
Indonesian Conference and the ratification of agreements on cease-
hostilities are likely to take longer than anticipated. We shall
be lucky if we leave for The Hague in early August.

7. Van Royen expects to leave Indonesia about the middle of July.

Although there has been no official news, there is a good chance
he will negotiate on behalf of the Dutch at the RTC.

POLITICAL ASSESSMENT
8. Since the advent of Van Royen I have become increasingly
convinced that the Dutch are at last seeking a political
settlement with the Republic. This was definitely not the case
last year when their program required the elimination of the
Republic. I do not believe this change of policy can be attributed
to pressure by the United States or to the work of the Commission,
though these have been important factors. The essential element
has been the armed resistance of the Indonesians and the failure
of Dutch military forces to gain effective control of the country
after 19 December. The change of policy reflects a more realistic
appreciation by the Dutch of the necessity, in their own
interests, of coming to terms with the real nationalist leaders.

9. Naturally enough Dutch policy will be to make those terms as
hard as possible for the Indonesians and as satisfactory as
possible for the Dutch. At The Hague there wil be difficult talks
regarding the terms of the Union Statute and particularly
regarding economic matters. The Netherlands have recently incurred
heavy financial commitments in Indonesia which they will want to
pass on to the U.S.I., and they are drafting a series of stringent
provisions to maintain their economic position here. These, it is
rumoured, go so far as to prescribe limits to the social and
labour legislation which can be introduced within a period of
years.

10. Moreover, while there has been a change of policy which is
reflected in the attitude of the new Netherlands officials in
Indonesia, there is no basic change of heart among the Dutch. I am
afraid the Dutch people would still like to discredit Sukarno and
to see the Republicans fail in the restoration of Jogjakarta,
although either of these developments could not fail to make a
difficult situation worse for the Dutch as well as for everyone
else.

11. Perhaps Indonesian unity and the prospects of a successful RTC
depend most at this stage on a cessation of hostilities. The Dutch
are making this a major issue. In part this is the consequence of
the military and economic successes of guerillas, but, according
to Van Maarseveen and Van Royen, it is an essential political pre-
requisite for the Dutch. Undoubtedly it will have an important
influence on public opinion in Holland, which has been inflamed
with reports of terrorism.

On the other hand, assuming that the Netherlands really want a
settlement with Sukarno and Hatta, their emphasis on the cease-
fire, and the commitments they have demanded of Sukarno and Hatta,
could be extremely short sighted. Sukarno has been placed in an
increasingly diffficult position and it will now be most important
for him (as well as for an eventual settlement) to obtain
agreement of the TNI forces to the conditions for a cessation of
hostilities.

13. I believe Sukarno will be able to gain the support of the TNI
but a complete cessation of hostilities is too much to expect for
the time being. It should be stressed to the Dutch that any
improvement in the military situation cannot be expected to last
indefinitely unless there is a corresponding political
improvement, and that the RTC must therefore show early results if
further outbreaks are to be avoided.

14. It cannot be too strongly emphasised that every delay
increases the difficulties in the way of a negotiated settlement.

The basic political problem in Indonesia is that after Linggadjati
and Renville1 after the first and second military actions-the
Republican leaders have found it increasingly difficult to justify
a policy of negotiation and cooperation with the Dutch and
maintain a spirit of national unity.

15. From the outset, a vital point of difference has been that the
Dutch regard armed opposition and guerilla activities as
'terrorism' while the Republicans consider them the essence of
their national struggle. For example, the Sultan's speech on
assuming authority in Jogjakarta, (see attachment I [2]), which
was most carefully and sensibly worded in view of the political
complications within the Republic, appeared in the most moderate
Dutch Batavia daily under the heading: 'Jogja's Sultan praises
terrorists'.

16. The Netherlands are now publicly committed to a program of
independence for Indonesia. However reluctant they may prove in
the event to the carrying out of that program, it seems that the
best policy for the Commission and the international world is to
take them at their word and give as much publicity as possible to
their commitments.

INTER-INDONESIAN CONFERENCE
17. Assuming all goes well between the Republican Government and
the TNI, the inter-Indonesian Conference which the Republicans
hope to call in Jogjakarta shortly after their restoration, will
be of major significance. It is most important that the Conference
should reach agreement in outline on such points as the
following:-

(a) Rules of procedure for the RTC (e.g. position of the U.N.C.I.,
see my telegram K. 324 [3]).

(b) Terms of the Statute of the Union.

(c) Terms of an economic agreement with the Netherlands and in
particular understandings regarding responsibility for overseas
debts contracted since 1942 and treaties and agreements with other
nations.

(d) Terms of a military agreement.

(e) The position of Sumatra and New Guinea.

(f) The question of ratification by representative bodies of the
BFO areas of any agreement reached at The Hague.

(g) The composition of the Provisional National Federal
Government.

(h) The terms of the Provisional Constitution.

18. The Republicans have found it impossible to avoid bringing the
BFO into the discussions but I fear that some of the new
participants, and notably the Chairman of the BFO, Sultan Hamid,
will be sponsors of Dutch plans. These BFO members are not
deliberately pro-Dutch, but are easily influenced and are in the
habit of working more or less at the direction of their Dutch
advisers. On the other hand, lack of political astuteness and
experience among the BFO members will make it easier for the
Republicans to dominate the inter-Indonesian Conference and swing
the resolutions in their favour. Sjahrir's fear is that Republican
leaders may be so pre-occupied with the job of restoring their
Government in Jogjakarta that they may fail to make appropriate
preparations for this all-important Conference and for the
subsequent RTC at The Hague.

SECRETARIAT
19. Things are not going well within the United Nations
Secretariat attached to the Commission. This is due entirely to
the Principal Secretary, Romanos, who has managed to antagonize
the entire staff of the Secretariat, the members of the
Commission, the senior military observers and practically
everybody else with whom he has come in contact. The present
unhappy situation cannot but reflect on the Commission and the
United Nations, but as you will appreciate, it is extremely
difficult for anyone to make an official complaint. Some of the
members of the Secretariat have been writing unofficially to their
departments at Lake Success, reporting their difficulties, and it
is likely that Cochran has notified the State Department. It may
therefore be useful if Hood could be advised informally of the
situation.