We have sent you by bag a copy of the United States - Australian working paper  which was submitted informally to Netherlands and Republican Delegations on 10th June and which was subsequently referred to in the press, together with the fact that Netherlands had rejected it.
2. It is possible that substance of Working Paper will come under discussion in Security Council which is continuing to consider Indonesian Situation and has called for report on circumstances in which negotiations were broken off. Although negotiations are expected to be resumed shortly there is little prospect of early agreement.
3. While we appreciate that Dutch policy is at present conditioned to some extent by proximity of elections you should lose no opportunity of keeping our views continually before Netherlands Government. We believe that United States - Australian proposals will provide a sound basis for discussion and early agreement, and we regret that Netherlands Delegation has so far declined to consider them. At same time, we do not by any means regard it as the only possible basis, and we are convinced that Committee of Good Offices would be glad if the two parties could themselves reach common ground through bilateral talks. In this connection we note that the recent meeting between Van Mook and Hatta took place in a friendly atmosphere.
4. As we understand it, the principal fear of the Republican leaders is that by accepting current Dutch offers they would find themselves committed to participation in a provisional government of Indonesia enjoying only nominal authority and destined for an indefinite period of tutelage under Netherlands sovereignty. Such a turn of events would amount to virtual restoration of the status quo, would quite fail to recognise the position which the Republic has won for itself within Indonesia and in the eyes of the world.
We believe it was mainly for purpose of allaying these Republican fears that Australian and United States members of Committee produced their proposals. If the Dutch were willing to meet the Republicans to some extent on (a) powers to be exercised by provisional government and (b) prospective date for elections and/or handing over of sovereignty to United States of Indonesia, we feel that other difficulties might be quickly resolved.