My telegram K.184. 
Stikker who returned to Batavia yesterday evening, said privately that the atmosphere had been favourable and he was not without hope. The rest of his party has remained in Kaliurang, where he will rejoin them today. Supomo, Chief Legal Adviser of the Republican Delegation, who is participating in the talks returned on the same plane. He gave me the following summary of discussions: Stikker did not raise the question of infiltrations or incidents save to make the general comment that law and order must be restored.
(2) He gave the Republicans the Dutch draft bill for an interim Government in Indonesia (copy was sent to Canberra in the last bag ) and suggested that the Republic outline its objections. He indicated that the Netherlands is provisionally prepared to make amendments to meet the Republicans.
(3) The draft bill is most unsatisfactory to the Republicans but understandings were reached in principle on the following points:-
(a) National Government to be formed immediately.
The Government to be based on a Cabinet system instead of a directorium. Members to be selected by the Prime Minister of the Republic and High Commissioner acting jointly. Sole qualifications for selection to be capacity and popular support.
(b) The interim Government to have de facto authority in internal matters. The High Commissioner's veto to be restricted to acts contrary to political agreement or contrary to the Statute of the Union.
(c) Elections to be held in principle in six months to a Constituent Assembly, which would also appoint a new interim Government.
(d) The interim Government to include a Minister of Foreign Affairs and a Department of Foreign Affairs to be established in Indonesia. The Foreign Affairs Department to work in conjunction with the Emissary of the Netherlands jointly.
(e) A date to be fixed for transfer of sovereignty subject to certain conditions being met. Notwithstanding Dutch arguments against continuation of the inauguration of discussions within Good Offices Committee, any agreement reached as a result of Hatta-[Stikker]  talks, to be formalised in Good Offices Committee, where negotiations would be resumed on the basis of the Cochran plan.
4. No understanding has yet been reached on the following matters:-
(a) The Netherlands insist that law and order be re-established before the elections are held. No discussions have taken place yet as to who would decide on this.
(b) Details of Union are still to be discussed.
(c) The Netherlands wants the High Commissioner to be Supreme Commander of all the forces in  Indonesia but this was rejected by the Republic.
(d) The Netherlands are opposed to continuation of the Good Offices Committee after political settlement but the Republic insists that it should stay on until transfer of sovereignty Stikker  was busy last night consulting with the High Commissioner, the Federalists and high authorities in Batavia on results on his discussions and particularly on issues still outstanding.