During the past week there has been little overt political activity here, but a great deal of manoeuvring behind the scenes.
My telegram K.263  sets out the response of the B.F.O.
(dictated by Beel) to the conditions laid down by Hatta and Sukarno for the commencement of talks with the Federalists (Telegram K.256 ). Although the Republican Delegation reported to me the manner in which Hatta proposed to reply to the B.F.O.
(see telegram K.264 ), no such reply has yet been forthcoming.
Instead, Sukarno has sent a telegram to the B.F.O. Chairman  indicating that he will not be able to reply to the B.F.O.
invitation until he and Salim have conferred with Hatta and the other Ministers on Bangka, and asking for air transport for that purpose. Accordingly, a Catalina left Batavia on Sunday for Prapat and Bangka. The inevitable trio, Darmasetiawan, Supomo and Sudjono, along with Leimena, went with it.
2. Anak Agung Gde Agung of East Indonesia and Ateng of East Java are making the trip on behalf of the Federalists. I understand they are authorised to delete from the B.F.O. invitation to the Republicans (Telegram K.263) the stipulation of the Government of Indonesia that 'If consultations lead to the possibility of establishment of an interim federal government at short notice the question of general freedom of movement of those persons now under certain restrictions can be regarded in the light of the circumstances at the time.' It is difficult to see, however, what practical significance this amendment can have. Of more interest is the choice of Anak Agung Gde Agung to represent the Federalists. There was a report that Sultan Hamid, Chairman of the B.F.O and a spokesman of the Netherlands, was not altogether happy that the Prime Minister of East Indonesia, who was known to be more closely associated with the Republicans than most other federalists should be selected to contact the leaders. On the other hand, as attachment 1 , a 'Nieuwsgier' editorial indicates, the Dutch are particularly anxious to see whether the Federalists can persuade the Republicans to talk business. Anak Agung Gde Agung may be the best man to do this persuading, particularly as he seems to be behind the new informal Dutch proposals for an early transfer of sovereignty (telegram K.264) which will doubtless be discussed at Bangka.
3. Informal Dutch Proposals According to Schokker, assistant to Koets, who has discussed these proposals with Cutts, the Dutch are strongly averse to implementing the Security Council's resolution.  Their strongest aversion is reserved for the proposed restoration of the Republican Government to Djokjakarta; to this they would 'much rather die than say yes'. They are, therefore, seeking ways and means of avoiding the embarrassment of flatly refusing to implement the resolution. Hence the proposals for an early transfer of sovereignty which, so far formulated, run as follows:-
(1) The Dutch will establish an interim government as early as possible, and transfer sovereignty to it within three months. The transfer of sovereignty would be conditional only upon completion of such technical matters as- (a) Drafting of a constitution (by the interim federal government), (b) Preparations for elections (by the interim federal government), (c) Settlement of the terms of the Union Statute, (d) Taking over by the interim federal government of the machinery of administration.
(2) For the scheme to have any hope of success, the Republican leaders must be persuaded to join the interim federal government.
However, it is suggested that, if the Republicans will not come in, an interim government will be formed in any case and sovereignty transferred to it according to plan.
(3) The organization of the interim federal government and its subsequent programme are matters of exclusively Indonesian concern to be settled between the Federalists and the Republicans. The only obligation of the Netherlands is to transfer sovereignty at the appropriate time.
(4) Regarding the three conditions laid down by the Republicans for commencing conversations with the Federalists regarding the interim federal government (see K.260 ), the Dutch position would be as follows:-
(a) Republican leaders could be released unconditionally subject to personal undertakings not to provoke disorder, (b) arrangements could be made for the Republican ministers to meet as a government, and (c) whether the members of the B.F.O. will recognize the Republican leaders as the Government of the Republic is a matter for them to decide. Dutch recognition is irrelevant as the Dutch would not be taking part in the talks.
(5) The position of the Republic in the future United States of Indonesia and in the interim period is a matter for the Indonesians themselves to decide.
4. These proposals are still strictly informal and may not even be in writing. The question which cannot yet be answered is whether they represent a sincere offer by the Dutch or whether they are simply a bait to persuade the Republicans to abandon their position regarding recognition of their status and implementation of the Security Council's resolution. Personally I view the suggestions with some suspicion. In the first place, I very much doubt whether the legislation necessary for an early transfer of sovereignty could be passed through the Dutch parliament.
Secondly, if the proposals represent a sincere offer, why should they not be made openly rather than whispered around the corridors of the Palace? 5. Off the record information from the Government Spokesman in Batavia casts further doubt on Dutch intentions. He explains- (1) the proposals originated from Beel, (2) The Hague authorised Beel to sound out people in Indonesia before decisions were taken at The Hague, (3) Indonesians refused to be sounded out because of the vagueness of the proposals, (4) The refusals have been reported to The Hague and it is expected that an official statement will be made shortly.
6. It is premature to come to any conclusions, but there are indications that the Dutch proposals would provide for the continuation of the Dutch army in Indonesia and there would not be a transfer of what we understand by sovereignty.
7. In any event, Republican leaders can hardly afford to abandon their insistence upon implementation of the Security Council Resolution in the hope of obtaining an early transfer of sovereignty, unless proposals are put forward in a satisfactory form and contain suitable guarantees for early independence. I am suggesting the Commission formally ask the Dutch for details of the plan as the best means of smoking out Netherlands intentions.
Commission's Activities 8. Meanwhile the Commission is still awaiting a decision from The Hague as to what the Dutch propose to do regarding the resolution of January 28. It looks, indeed, as though we may have to wait some time before getting a clear answer. Possibly Cochran's return and his discussions in Europe may give some impetus to the Commission's activities, but there is very little we can do until the Dutch make their standpoint clear. All we know so far is that they have taken no steps to implement the resolution, and I am endeavouring to have the Commission make an early report to the Council to bring this out clearly. At the same time we are keeping a continual pressure on the Netherlands Delegation and this at least is having the effect of evoking Netherlands protests at Washington about the undue activities of the Commission. An effect which I have come to regard as a very good sign.
Restrictions on Press 9. In last week's letter  I dealt at some length with the question of political prisoners in Batavia and West Java. Another unpleasant aspect of Dutch policy here is the absence of freedom of expression. Attachment 2  is a memorandum prepared by the Commission's Press Officer regarding Indonesian newspapers which have been suppressed by the Dutch since December 19. You will, no doubt, be surprised at the number of suppressions, but that is only half the story. Anyone who publishes views unfavourable to the Dutch is very likely to see the inside of a prison without much ado. By virtue of the Dutch judicial system he is likely to stay there for many months without charge and without trial.
Latumeten and Sastrosuwignjo who were recently imprisoned following Netherlands disapproval of the Republican Delegation's 'Press Review' (see my preceding letter) have informed the Republican delegation that they expect, as a result of the Commission's interest in them, to be tried shortly. This is considered somewhat unusual and, apart from the Commission's intervention, it is most unlikely that they would have received a trial.
10. In telegram No. K.263  (paragraph 2) I indicated that the B.F.O. had stalled on the Dutch request for its views regarding the Security Council's resolution. Attachment 3  is a communique issued by the B.F.O. chairman, justifying the refusal to comment on the resolution on the ground that it 'might possibly influence projected consultations with the Republican leaders in an unfavourable manner'. Also of interest in this connection is Attachment 4 , a statement issued by the B.F.O. on February 1, regarding the current controversy as to the status of the Republican leaders.
Your Letter 11. I have received your letter  of January 26, and agree that the future task is 'to convince the Dutch of the hopelessness of their position as well as keep Republican hopes alive and stiffen their resistance'. In next week's letter I shall endeavour to include an analysis of the Federalists.
12. An important feature of the present situation is the strength of Indonesian public opinion and the refusal of people from the territories previously under Republican control to co-operate with the Dutch. Attachment 5 , a statement of the Sultan of Djokjakarta (see K.263), is interesting in this regard.
13. Another significant feature is that the Dutch by their military action have probably irrevocably destroyed all hope of a smooth settlement of the Indonesian dispute. Guerilla bands are necessarily becoming more scattered. While they continue to fight the Dutch there is a common integrating purpose, but I find it difficult to see how the fighting can be effectively stopped and I am very much afraid that the Dutch by their last military action will have at last justified their complaints of lawlessness in Indonesia. Attachment 6 , a confidential letter from Simatupang, a young and particularly bright T.N.I. Colonel, who was a member of the Republican Delegation, to Colonel Mayer, formerly Senior U.S. Military Observer, gives an insight into this problem. Simatupang is now with the guerillas in West Java. The letter was relayed to Batavia via Djokjakarta.
White Australia 14. In last week's letter I mentioned the reactions here to reports of the decision to deport Mrs. Annie O'Keefe. You will have heard by now of Sultan Hamid's statement that he would expel all Australians from West Borneo by way of retaliation. Attachment 7  is a 'Dagblad' editorial which is a fair sample of the type of publicity which incidents of this nature are likely to earn us abroad. A number of foreign pressmen have queried why we throw overboard so recklessly the very extensive goodwill we have built up in Asia since the war.