Thank you for your telegram 369.  Reference your paragraph one (b), the question of recommencing trade was in our minds and Critchley is now working out a plan to endeavour to do something about specific matter mentioned by you.
2. Setiadjit yesterday delivered a memorandum signed by Sjarifuddin to Committee in close conformity with the suggestions set out in my telegram K1.  Unless you telegraph for text I will send the memorandum to you through Singapore bag.  Memorandum was made public and has been published in Aneta and I think it will be publicised extensively by foreign correspondents including Australian.
3. Reference your paragraph 5, I agree that pressure from United States, United Kingdom and Australia would be most helpful and advisable in this connection. However I have apparently succeeded in my endeavours to appear impartial and have established very friendly relationship with Dutch officials particularly Van Vredenburch and I think it preferable at this stage that I should continue in this way and would therefore prefer Australian pressure be applied in such a way as not to link the Committee or myself with it.
4. As I have said before the Americans keep informing me that pressure has been and is constantly being applied by the United States on The Hague but I can only guess that such pressure was the withholding of loans. Early information as to this would be most helpful.
5. In the actual discussions between Technical Committees on the cease fire  delay has been due to differences of opinion in regard to areas occupied or controlled by parties behind the Van Mook line and their freedom of action therein. Without agreement on this point it has been impossible to issue cease fire orders which would not conflict. Before pressing this matter (which depends on the interpretation of the November 1st resolution) to conclusion I have had to await Van Zeeland's reply which has now been received. In this he gives his assent that the Committee may interpret the November 1st resolution on the advice of Military Advisers of Belgium, Australia and the United States.
Unfortunately the Belgian adviser is adopting an irreconcilable attitude to the Australian and United States advisers who are in agreement.
6. However, whilst technical discussions continue a very important and hopeful development has occurred in the last two days on military level. Campbell was informed by the Belgian adviser, Colonel Servais, most informally, that the Dutch have told the latter that they would move back to the August 4th positions provided that on a military level- (1) Such positions were agreed upon by both parties;
(2) That satisfactory demarcation lines and zones were agreed upon;
(3) That the Republican troops with full arms and equipment would move from the zone and behind it to the Republican area;
And on political level that a satisfactory arrangement could be come to for the maintenance of law and order in the zones, preferably by joint force. I have some reason to believe that the Dutch may be genuine in this and Campbell is doing all he can to finalise the matter on a military level so that the Committee could then take up political adjustments in regard to the control of zones.
7. I consider it probable that the Dutch willingness mentioned in the last paragraph was the result of communication by Servais to the Dutch of the determination of Graham and myself to interpret the resolution as requiring the Dutch to withdraw to August 4th positions and our further determination to report the refusal or failure to withdraw to the Security Council. Whatever the reason for any change in the Dutch attitude, the probability of such a change is corroborated by usually reliable sources of personal information to myself.
8. I have informed Graham of this development and I now feel sure that failing agreement by the Dutch to withdraw he will come with me and report to the Security Council although he is still a little nervous as to this. I know that his staff do not share his nervousness and are pressing him.
9. In view of this apparent change of circumstances I have deferred temporarily acting upon the suggestion for the imposition of time limit on the cease fire discussions  and am naturally straining every effort to have the agreement on this aspect before substantive discussions commence on the ship. My estimate is that the chances of success on this are about even. Tactics with my approval which Brookes has been adopting in the cease fire Committee is that [of] working either through the Indonesians or the Chairman. In this way it has been possible to [maintain] the position of impartiality whilst achieving the same.
10. It was reported in Aneta today that Neher, Dutch Minister for Reconstruction, is leaving for the N.E.I. Monday 'for discussions on formation of an organ to share responsibility of the Lieutenant Governor-General'. A further report in Aneta today stated that the object of Neher's visit is 'to discuss further course of political developments in co-operation with Mr. van Vredenburch'. The Dutch have not yet officially appointed representatives for substantive discussions but have unofficially assured the Committee that representatives will be appointed and ready by the ship's arrival next Tuesday. In this connection I have learned that it is possible that the Dutch, although they will have appointed a delegation, will not in fact be ready to commence substantive discussions until Thursday 4th December. As Neher leaves Holland on Monday, this suggests that he will lead the delegation. In this event pressure at Hague becomes even more important. Meanwhile any background on Neher would be helpful.
11. Throughout discussions to date we have ensured that the Committee dealt with Vredenburch and not with Van Mook or Spoor except in his presence. This has, I am sure, helped to strengthen his position. We cannot see any satisfactory agreement being negotiated if Van Mook or Spoor and not The Hague and its representatives are made the responsible Dutch spokesmen. Pressure by the United States or United Kingdom specifically and urgently directed towards elimination of Van Mook's power and complete taking over by The Hague would be invaluable. Here, I even suggest that such pressure might be towards removal of Van Mook from his present office.
12. Graham is going to Djokjakarta on Sunday to broadcast  but while there will endeavour to ascertain from Sjarifuddin the Republic's requirements and in particular whether they are willing to commence discussions with Linggadjati as a starting point.
13. In this connection Sjarifuddin had a conversation with Brookes during the latter's recent visit to Djokjakarta with the Cease Fire Committee. Sjarifuddin said that he did not consider immediate independence was the prime objective of the Republic during the coming discussions provided that guarantee was given that this would be achieved by some specified date in the not too distant future. He felt that the essential matters were financial and economic, namely that the doors must be left open to the Republic to raise loans, obtain supplies and  (financial, medical, scientific etc) from nations other than Holland. He had no objection to the Dutch providing the greater part of these aids as a start. Brookes gathered that Sjarifuddin would use the question of immediate sovereignty as a bargaining counter to obtain his other objectives if this became essential. If the Dutch still [put] forward the idea of United States of Indonesia the Indonesians will probably insist that their position in the Federation is based on the proportion of their population and resources.
14. At present the Committee has its hands extremely full with an endeavour to conclude satisfactory cease fire talks, arrangements to commence substantive discussions on ship and endeavouring to reach agreement as to the procedure to be adopted and the best starting point for substantive discussions. All of these matters are making it difficult for me to get Graham's mind on to Sjarifuddin's information and to persuade him to forward it to the Security Council but I will keep at him. Meanwhile I think that any publicity that were given to the statement would keep the Republic's cause.