123 Eaton to Burton

Departmental Dispatch 16/1948 BATAVIA, 29 April 1948

SECRET

SUBJECT: GENERAL POLITICAL SITUATION

Although the general atmosphere prevailing at the present Kaliurang talks is said to be good, progress in regard to major issues is still as slow as ever. Solution of the question of sovereignty during the interim period before the formation of the United States of Indonesia, currency, and Republican overseas representation, is the main difficulty. The future plebiscite is also a ticklish problem.

2. I had a long informal talk at the Consulate-General last night with the Acting Head of the Dutch Far Eastern Office, Mr.

Eschauzier, whom I know very well. He represents The Hague interests and during the present talks spends his time between Djokjakarta and Batavia. Eschauzier told me quite frankly that any delaying tactics by the Republicans would not reduce the time of the interim period. With regard to Republican overseas representation, he told me that this matter was very upsetting to the Dutch, particularly as the Republic seems to be trying to arrange for an increase in overseas representation and participation in some future-at present indefinite-Asiatic Bloc.

However, Eschauzier said that if the Republic confined its overseas representation only to the present limit this difficulty would probably be overcome.

3. The currency problem appears to be bound up with Republican trade, which is being dealt with by sub-committees of the Delegations, but here again, unless a general overall solution is found, there does not appear to be an early solution to the problem, and there is no doubt that both the unstable Netherlands East Indies guilder and the Republican rupee are a great hindrance to the well-being of all people living in Indonesia.

4. With regard to sovereignty during the interim period, I asked Eschauzier what was the Dutch view in respect to the Republic and he told me that the Republic could only be regarded as a Negara in the same way as other States which had been formed. They would be allowed to run their own administrative services, but with Dutch advisors and under Dutch control. There was no definite answer to a question regarding the Republican armed forces.

5. I take little notice of the recent criticism by the Provisional Federal Government in Batavia of the alteration to the Dutch Constitution, in respect of the future sovereignty of Indonesia, by The Hague, as I cannot help but feel that this has been pre- arranged. What 'sovereignty' is going to mean, when it is achieved, still remains very much in the air.

6. It has been announced that in May a conference will be held in Bandoeng of representatives of the future member-states and member-states-to-be, with the addition of representatives of the minorities. It will be convened at the initiative of the Delegation of the Kingdom and at the request of the Provisional Federal Government.

Its primary task will be to work out the plan for the structure of the United States of Indonesia and to take an Indonesian share in the blue-print of the Netherlands-Indonesian Union.

7. It is of interest to note that all meetings or demonstrations on Labour Day, 1st May, have been banned in West Java (Pasundan State) by order of the Military Commander. Failure to observe the order will result in a penalty of one year's imprisonment and a fine of 10,000.

8. The Indonesian political situation, in my opinion, with its present ramifications will remain a 'hornets nest' for a very long time to come, unless some drastic international pressure is exerted on the parties concerned. Unless some reasonable settlement is made at an early date I feel that in the future, Indonesia, particularly the Republican element, will look towards the Asiatic countries for support, rather than rely on other powers.

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