Your telegram 79. [1]

In considering the apparent change in the Dutch attitude, it
should be remembered that the Netherlands delegation has been
pursuing bargaining tactics and testing out Republican reactions
to see how far the Republican delegation could be induced to give
way. The Republican reaction to the earlier Dutch draft (see K.304
[2]) showed the Dutch they were trying to push Roem too far and
that an early breakdown in discussions was inevitable unless they
changed their line. Some members of the Republican delegation
believe that this earlier Dutch draft was prepared by the Palace
clique and did not represent Van Royen's own views. It is
rumoured, for example, that Van Royen has used the reactions of
the Republican delegation and Cochran to this draft to obtain
agreement in the Netherlands delegation to a more liberal
approach. Certainly, some of the Dutch realise that in the
interests of the Netherlands, a settlement must be obtained this
time.

2. Cochran has also exerted as much influence as possible to bring
about a change in the Netherlands attitude. He has personally
talked to Van Royen (see my telegram K.305 [3]) and has hinted
that Washington has also been at work.

3. Roem has reported from Bangka yesterday, 6th May, that the
Republican
Delegation will accept the draft statements (see my telegram K.306
[4]) as they stand. Roem insists that his Delegation will not go
further, and that if the Netherlands Government does not agree to
the return of the Residency of Djokjakarta, the rest of the
statements will be unacceptable.

4. The Netherlands Government met at The Hague yesterday
afternoon. In general, there is an air of optimism in Batavia.

Cochran hopes that the parties will be able to make agreed
statements at a formal meeting under the auspices of the U.N.C.I.

this weekend. I am afraid, however, that the Netherlands
Government is likely to raise further conditions, particularly
regarding the restoration of Maguwo airfield in the Residency of
Djokjakarta. This issue could still lead to delays and even to
eventual deadlock.

5. The most that can be said, at present, is that the likelihood
of a round table conference at The Hague has increased but the
real problems in the Indonesian dispute are still to be solved.

The old colonial hands of the Netherlands Army authorities are not
working in the direction of a settlement. If there is an initial
agreement on the lines set out in my telegram K.306, the talks
will continue on the details of the restoration of the Republican
Government, the cease hostilities orders and the round table
conference. There will be any number of headaches. For example,
Spoor is likely to endeavour to use 'Communism' to continue to
attack the T.N.I. bands.

6. Most of the difficulties could be overcome by a quick transfer
of sovereignty, but there is still no clear indication of what the
Dutch statement on Indonesia at the round table conference will
be. Hatta has informally made a series of detailed enquiries of
Van Royen on this subject, but even if the replies are not
altogether satisfactory, he will probably want to proceed with the
conference in the hope that with federalist backing a satisfactory
settlement can be forced on the Dutch.

7. There is a nest of Republicans including Sjahrir, some younger
members, and Information Minister Natsir, who believe that the
Republican Delegation has been too weak in the present talks.