Discussions in the Political Committee are not progressing satisfactorily. In particular, there may be a deadlock on the plebiscite.
2. I am suggesting that the Committee take the initiative to break any deadlock that arises and that instead of endeavouring to bring the parties together on all issues of disagreement, it make its own proposals for a speedy political settlement on the information now at its disposal. These proposals would be as simple and straightforward as possible and could be modified after the parties have made their comments.
3. I have checked the outlines of the following plan with Hatta and propose to submit it to the other Committee members:
The political settlement should include:
A. Proposals for a sovereign United States of Indonesia. (In general, agreement has been reached on this).
B. An outline of the Union between the United States of Indonesia and the Netherlands. (Draft proposals of both parties are under consideration).
C. Detailed proposals for a Constituent Assembly based on the following:
(a) The Assembly to be given three tasks:
(i) to draft the Constitution of the U.S.I., taking into account the agreement reached between the parties;
(ii) to negotiate with the Netherlands a Statute for the Union, taking into account the general outline agreed by the parties;
(iii) to delineate the administrative units forming the several States of the U.S.I.
(b) The Assembly to be convened as early as can be agreed.
(c) The Assembly to be elected by the people of Indonesia, though special arrangements might be made for small representation of minorities.
(d) For simplicity, electorates to follow the regency  districts.
(e) Each electorate to elect representatives proportional to the population of the district and number of members of the Constituent Assembly.
(f) Free elections to be held under observation of Committee should either party request this.
(g) If required, the details for observing the election to be worked out with the Secretariat.
(h) Over an agreed period before the election, each party to permit freedom of assembly, speech and publication.
(i) The Constituent Assembly, after completing its threefold task, to be converted into a provisional parliament which would appoint a provisional federal government to which the Netherlands would transfer sovereignty.
4. This direct approach to a democratically elected Constituent Assembly has the following advantages:
(a) It avoids deadlock over the plebiscite;
(b) It provides the best opportunity for a well organized administrative system in the federation;
(c) It is the shortest route to independence for the Indonesians.
5. If the parties could not agree to forgo a plebiscite, the States delineated by the Constituent Assembly could be provisional and subject to confirmation by plebiscite to be held in each of the areas after the U.S.I. is established.
6. The Americans would accept a large part of this plan, but will probably argue that delimitation of States in Java, Sumatra and Madura should form part of the political settlement and that these States should elect the members of the Constituent Assembly. As a compromise, which might also avoid long drawn out wrangling in the Constituent Assembly, I would suggest the establishment as early as possible of a study group of experts from the Netherlands, the Republic and other areas of Indonesia to recommend to the Constituent Assembly the delineation of States throughout Indonesia. The Constituent Assembly would be expected to accept these recommendations except in exceptional circumstances.
7. To meet Dutch objections, it might be practicable to have agreement at the time of the political settlement, on the number of States to constitute the U.S.I. Provisional arrangements might also be possible to set up temporary State Governments on the basis of recommendations of the study group, so as to meet Dutch demands for a smooth transition.
8. Dutch and Americans will be anxious to set up an interim federal government at the time of a political settlement. If agreement could be readily reached this would be advantageous. But agreement is not essential. The above proposals envisage only a short interim period during which the Republic could remain as it is, with understandings between the pre-federal government in Batavia and the Republican Government on interim problems. The reduction of the interim period to purely nominal proportions would also facilitate agreement on other points on which deadlock may arise and which are most difficult when considered in relation to a long interim period. Such points include foreign affairs, justice and security.
9. Although proposals have not yet been tested in the Committee, I am sure that the Americans, as a result of their talks with Van Vredenburch, will oppose any move for the Committee to make suggestions to the parties.