Thanks for your 136. 
Your instructions to New York correspond with the line I am taking here.
2. I am going to Jogjakarta tomorrow when I shall test Republican reactions to Hatta - Van Mook talks. 
3. These talks in which the Dutch have so far only offered minor concessions seem primarily designed to (i) take the initiative from the Committee and help circumvent discussion of our proposals , and (ii) gain time for the Dutch and give a false impression as that negotiations are continuing.
The Dutch are anxious to get rid of the Committee and would welcome developments which would reduce its position in the negotiations. Van Mook is endeavouring to make much more of his talks with Hatta than is justified at present.
4. If, however, strong pressure can be exercised on the Netherlands, Van Mook may be persuaded to make real offers. The Hatta - Van Mook talks would then provide a useful let out for a settlement which would bring credit to the Dutch and much personal satisfaction to Van Mook. The talks may therefore become extremely important and I fully agree they cannot be dismissed.
5. Hope of a settlement depends entirely on pressures on the Dutch. Both international and internal pressure should be considerably increased as a result of our plan. There is evidence for example that the non-Republican Indonesians at Bandung are favourably impressed with the proposals and may be more difficult to manage than the Dutch anticipated. The Dutch are clearly anxious to avoid discussing the plan on its merits. Their main objections are to:
(a) the elections and (b) the powers of the Interim Government. These are understandable since the Dutch have not yet faced up to the real implications of their promise to hand over sovereignty.
6. If negotiations with the Republic break down I believe further military action is inevitable, although the Dutch may endeavour to set up a puppet Indonesian regime through which to work.