Notwithstanding strong appeals both informal and formal, including use of your telegram 404 , both Graham and Van Zeeland were insistent that cabling of a section of the report to the Security Council yesterday would have jeopardized the probable acceptance of our most recent document (see my K.28, 29 and 30 ). Our report is almost ready for despatch and will probably be sent in advance [of] document. Although we shall be off the Security Council when the report is discussed I presume we shall be allowed to debate the issues. Although it is too early to judge finally, I believe considerations set out in paragraph 5(e) of my K.26  may still apply.
2. Our latest document with a few minor modifications was agreed to on Christmas Day and submitted informally to the Netherlands and the Republic on December 26th.  I have sent two copies by air mail number 51. The document has many defects of compromise and many more of hasty drafting but it was accepted by Van Zeeland who was not prepared to consider an alternative, and, it does I believe seriously undermine the present Dutch policy in the Indies. Militarily the Dutch have presented the Committee and Council with a fait accompli. They are now endeavouring to do the same politically and it is essential that the Committee endeavour to check this without delay.
3. My advice to the Republic is to accept the paper but not with undue haste and that in doing so they should stress:
(a) The serious disadvantages involved and that acceptance of the 'Van Mook Line' as a general basis even though provisionally is unjust and not in keeping with the resolutions of the Security Council. Nevertheless that since they have agreed to accept the assistance of the Committee and the Security Council and despite the serious sacrifices involved, they accept the proposals in the spirit in which they have been put forward, namely, one of helpful compromise.
(b) That in view of (a) they must stress urgent necessity of an early political settlement and that they are pleased to note that the Committee agree that the political proposals and truce proposals are parts of a close integrated plan.
(c) That since the dispute is essentially a political dispute no truce plan can be wholly satisfactory but can only serve to improve the atmosphere for early political talks and agreement.
(d) That they will do everything possible on their side to prevent the incidents and achieve a worthwhile truce but that in a period of uneasiness truce incidents may occur. They are therefore pleased to learn the Committee has proposed special safeguards connected with the policing of the demilitarized zones and hope that these measures may be still further strengthened by the creation of a joint police force under International control.
(e) That it would reduce distrust between the parties if each party agreed not to take further military action without approval of the Committee or Security Council. (The suggestion may come better from the Committee itself.) (f) That they are especially pleased to note the emphasis that has been placed on a higher restoration of trade and commerce.
4. These points I believe cover the danger spots in any truce plan. Even if the Netherlands accepts the plan it is my guess that they might do so with the intention of stalling on a political settlement. They could then put their trust in the impossibility of any truce plan working effectively and in cataloguing the incidents to justify proclamation of military force. In our proposals I have done my best to safeguard the Republic in this and other respects but a reply based on our advice to the Republic would help keep the more dangerous aspects to the fore both here and in the Security Council.
5. Already Van Zeeland has received a reaction of [feigned] surprise by the Netherlands to [fr]ustrate the plan. They agreed with him that the proposals, particularly those in annex 2, would place the Netherlands in a most difficult situation. According to his own report however, he stood his ground and pointed out that the Netherlands must now come out into the open with either acceptance or a clear statement of objections so that the Committee will know exactly where it stands.
6. Since the presentation of the paper and Van Zeeland's talk, there has been a perceptible change in the Dutch attitude. The Netherlands Ministers who have been inclined to avoid the Committee are now only too glad to talk the matter over informally with us tonight. Graham is jubilant but I fear prematurely. The next few days should be crucial and I shall endeavour to keep you fully informed.
7. The Madura party has not yet reported on their enquiry  but it is now clear that considering the Republican difficulties in the island we shall have a good 2 to 1 majority report. I have not pressed for its early completion because of its possible effects on our latest vital document. The Committee informed the parties yesterday that it wishes to extend two further enquiries as early as possible. These are Bandgarnegara as suggested by the Netherlands, and Rawahgede in the area of Krawang as suggested by the Republic. The latter enquiry should be particularly fruitful.