The following is a summary of developments in the various
committees.

1. Steering Committee.

A sub-committee consisting of one Representative from each of the
three delegations has been set up to screen applications from
'Representatives of significant interests' who wish to express
their views. The commission has reserved the right to participate
in the work of the sub-committee.

So far only the Netherlands group has taken advantage of the right
of minorities to be heard on matters that concern them. In reply
to a request from the Steering Committee this group has submitted
a list of 30 items which it considers affects its interests. The
sub-committee on 'significant interests' has been given the
additional task of considering this list and of advising the
Steering Committee which reserves the right to decide on which
items the group may be heard.

2. Political Committee.

The three sub-committees of the political committee have been
continuing their informal talks. Only the second sub-committee
dealing with the Netherlands-Indonesian Union has got down to
essentials. All participants agree in general that the purpose of
the Union is to 'organise co-operation between two sovereign
nations of equal status on a voluntary basis'. But there is a
sharp division of opinion as to how this will be effected. The
Netherlands want to establish a permanent machinery such as a
Council of the Union, a Minister and a Union Court. The
Republicans reject the idea of a Union Council as a permanent
organisation and insist that the highest organ should be a
conference between the Ministers or their deputies responsible to
their respective Governments and meeting whenever the need arises.

They agree, however, that a joint organisation such as a Joint
Secretariat or Bureau may be necessary to execute the joint
decisions of the Union. The Federalists have not yet stated their
views on the execution of the Union but have insisted strongly on
'the formation of a voluntary association which must not be felt
as coercion'. Presumably they will support the Republicans.

A conflict may also develop with regard to the 'King' as the 'Head
of the Union'. While all parties may agree that the King will be
only a symbolic head The Netherlands are unlikely to agree to this
being expressly stated in the agreement.

3. Economic Committee.

As expected informal discussions on economic and financial
problems have brought out the sharpest differences between the
parties. The Netherlands have presented an oral note setting out
15 principles to serve as a basis for the financial and economic
agreement. These are summarised in my immediately following
telegram.

Many of these principles and sections of most of them are
unacceptable to the Republican and B.F.O. Delegations. The main
objection is to the proposed far reaching interference in the
internal economic policy of the R.I.S.

Four sub-committees have been set up to continue the discussions.

Sub-committee I-the study of the liabilities of Indonesia towards
the Netherlands and the presentation of proposals for the solution
of this question.

Sub-committee II-the investigation of real rights such as long
leases, concessions, licenses etc., granted by Netherlands Indies
Government (c.q. the Government of Indonesia) after 1942 and a
report thereon.

Sub-committee III-the study of agreements regarding commercial
policy and
monetary treaties in order to make proposals with regard to the
line of conduct to be followed in the future between the
Netherlands and the R.I.S. in this respect.

Sub committee IV-the study of the monetary relations between the
Netherlands and the R.I.S. including [1] banking and the monetary
system.

The scope of these sub-committees is not clear from the titles.

Sub-committee I will deal with debts and other similar commitments
between the Netherlands and Indonesia.

Sub-committee II will deal with real property rights and
concessions.

Sub-committee III will deal with matters affecting foreign
countries.

Sub-committee IV will deal particularly with internal financial
polices.

The activities of sub-committees III and IV will to some extent
overlap but arrangements will be made for joint discussion.

4. Military Committee.

This committee has agreed that it has not to consider
implementation of the cease-hostilities order in Indonesia
although discussions have not proceeded for differences have
emerged. The Netherlands for example oppose the Republican
suggestion to consider the withdrawal of Netherlands forces before
the conclusion of the Conference. In general the Committee work
has been held up while the Republicans have been endeavouring to
straighten out the matters with the B.F.O. Delegation. The
chairman of the B.F.O. on this committee, Sultan Hamid, is their
main difficulty. One personal problem which is emerging is that
Hamid, who is a Colonel in the Netherlands Army, wants to be
Commander-in-Chief of the Federal Forces which is unacceptable to
the T.N.I.

5. The Committee for Cultural Affairs and the Committee for Social
Affairs
Only preliminary discussions have been held in these committees.