The atmosphere in Indonesia is deteriorating rapidly. Internally the Hatta Government is subject to increasing pressure from the left which is capitalising on the lack of any indication of American help for the Republic. The left wing parties are advocating acceptance of the Russian offer  and a firmer policy towards the Dutch, including the rejection of Renville and the continuation of the revolutionary struggle.
2. Events of the last ten days such as the opium revelations  and the Pegangsaan shooting , and the events reported in my telegram yesterday  could not have happened at a worse time. A telegram this morning from Djokjakarta advises of a Republican cabinet decision that there will be no resumption of negotiations until Republican house at 56 Pegangsaan East is returned. Reaction to the ejection from Batavia of Republican civil servants and their families will be no less strong.
1 See Document 149.
2 The Federal Indonesian Police had claimed the involvement of senior Republican officials in an opium smuggling plot.
3 A policeman had been killed on 16 August when police and youths clashed at premises owned by the Republicans in Pegangsaan East, Batavia.
4 Cablegram K152, dated 24 August and dispatched the following day, reported that Dutch police had seized the Republican house in 56 Pegangsaan East; that the Dutch had requested all active Republican officials to remove with their families from Dutch- controlled territory; and that the NEI authorities had taken over in Batavia a hospital staffed by Republicans.
3. At a meeting of the Good Offices Committee today when these matters were discussed I strongly urged that in accordance with instructions the Committee should report recent developments and its own impotence to the Security Council and ask for instructions. The proposal was strongly opposed by Belgium, while Cochran of the United States asked for a little more time to test the situation. The Committee will be leaving for Kaliurang on Wednesday next, so there is no prospect of further action until the end of next week.