Many thanks for your letter  of 2 August. I am sorry that so far we have not been able to arrange a radio transmitter for the Republic. The need was very great. However, I realise our technical limitations.
New Guinea 2. I was especially glad to receive your views on New Guinea.
Naturally I agree with them. Unfortunately this question is certain to be brought up at The Hague and will become an extremely contentious subject of discussion. The East Indonesian members of the Republican delegation are anxious that Dutch New Guinea should be included in the USI but it has been my impression that the main Republican leaders, such as Hatta, have felt that they have enough on their hands without New Guinea and that the latter can wait.
The situation has been complicated, however, by the prominence the Dutch have insisted on giving the BFO. Anak Agung Gde Agung, Premier of East Indonesia, appears dedicated to ensuring that Dutch New Guinea is included in East Indonesia. It was he who raised the subject in connection with the Round Table Conference and it has been mainly his insistence that has attracted Republican interest. Naturally the Republicans must seek the closest collaboration with Anak Agung Gde Agung as a vital key to Indonesian unity. They can therefore hardly afford to withhold support for his demands on New Guinea. It was significant that Anak Agung Gde Agung's first statement on getting out of the plane in Holland was to say emphatically that Netherlands New Guinea should remain a part of Indonesia.
3. I shall do my best to keep New Guinea out of the discussions but as you will realise this is a lost cause and, as you point out, it is most important that I act discreetly. One possible line is to suggest that New Guinea be made a bargaining point. For example, the future economic stability of Indonesia depends upon a generous Dutch approach to the problem of Indonesian debts. My suggestion to Hatta has been that at the RTC this subject should be discussed in general terms and that detailed financial negotiations should be postponed until next year. In the meantime, of course, technical experts could be studying the problem in cooperation. Such a procedure would be consistent with the policy followed by Britain in India where the debt position was the reverse of that in Indonesia but the technical and psychological problems very similar. Clearly the Dutch will be opposed to postponing the financial negotiations. Hatta might consider postponement of the New Guinea problem as a 'quid pro quo' to the Dutch.
Policy of the Netherlands 4. Jim Hill's notes  on Indonesia have arrived. I am glad to have them but have not yet had an opportunity to study them. There has, of course, been an important change of policy since the failure of the second police action. The question now is not so much whether sovereignty will be transferred as what strings will be attached to the transfer and whether those strings will endanger economic and political stability in Indonesia.
Undoubtedly we have stiff fights ahead with the need for the Commission at some stages to exert pressure on the Netherlands.
Cochran's comment on this view is: 'absolutely'.
5. It is unfortunate that the Dutch will find it beyond them to be gracious and generous. Their difficulties are increased by the prevailing political tension in Holland on the subject of Indonesia. Even within the Government there are said to be serious differences.
6. Nevertheless the Second Chamber debate, which was completed last night, was much more favourable than generally expected.
Romme, the key figure, was unusually restrained and I was agreeably surprised. When Van Royen returned from Indonesia, he told Romme that Hatta was not concerned with what people like Welter and Gerbrand[y] would say in the debate but was greatly concerned with what he, Romme, would say. Van Royen therefore suggested that Romme should see Hatta. Some time after Hatta's arrival a statement was issued that Romme had spoken to Roem and had made unsuccessful efforts to see Hatta. Since, according to the Republicans, there was no truth whatever in this report, there was every reason to fear that Romme was up to some political manoeuvre.
7. In general, it appears that critics of the Government, such as Romme, appreciate there is no alternative to the present Indonesian policy, but will make every effort to see that all points against the Republicans are pressed home to the limit. As I have reported frequently, I believe this is a misguided view of the Netherlands interests. Hatta and the other Republicans have confidence in Stikker and Van Royen but are distrustful of most of the other Dutch leaders.
Implementation of Cease-hostilities 8. The Dutch are expressing concern about breaches of the cease- hostilities agreement. Their complaints so far are not very convincing and provide at least as much evidence of Dutch disregard of paragraph 17  of Part II of the Manual as of TNI infringements.
Position of the Commission 9. The position of the UNCI in the Round Table negotiations is the issue of the moment. The Netherlands will undoubtedly endeavour to push the Commission to the side-lines and seek to make the Conference an internal matter. Their opportunities to do this will depend to no small extent on the rules of procedure which are at present under discussion. I have made special efforts to ensure that the Commission insists on two points.
(a) That the English text be accepted as the authentic text of any agreements.
(b) That the Commission chair the Steering Committee.
10. On the first point I have convinced Cochran that the Commission's obligations to the Security Council and the looseness of the Dutch language require official English texts, but on the second point I have been far less successful. Cochran's view is that the RTC is primarily the responsibility of the Netherlands and that the parties have a responsibility for reaching a successful settlement within two months. He does not want the Commission to intrude on this responsibility at this stage unless the parties request it. As reported by telegram, the Federalists are supporting the Netherlands stand that the Commission should not chair the Steering Committee. The best that can now be hoped for is a clear statement in the rules of procedure that the Commission shall participate in all meetings of the Steering Committee.
The position of the B.F.O.
11. The Republicans have been greatly disappointed by the Federalist support  of the Dutch position on the Steering Committee. They informed me that only a few days ago they had obtained the informal agreement of the BFO, including chairman Hamid, to their proposal for UNCI control of the Steering Committee and that they were taken aback when Hamid at the informal meeting went the other way. Apparently the Republicans are only learning slowly that the Dutch advisers are the real core of the BFO. In practice the BFO consists of:
a) Sultan Hamid, who is very much influenced by Dutch advisers and since his arrival in Holland has made no attempt to associate with any but the Dutch.
b) Anak Agung Gde Agung, who, although a nationalist at heart, is not a strong personality and is influenced by his Dutch advisers.
c) The Dutch advisers:
(i) Mr. Vleer, Secretary-General BFO.
(ii) Mr. Hamelink, Minister of Finance, East-Indonesia.
(iii) Mr. Hangelbroek, Secretary-General, General Affairs, East Indonesia.
(iv) Dr. J. Eisenberger, adviser BFO.
The Indonesians-the rank and file of the BFO-are largely Republican sympathisers but they are too weak and inexperienced to stand up against the Dutch advisers. The weakness of the Indonesian position is illustrated by the fact that Vleer, the Secretary-General of the BFO, at present shares with Hamid and Anak Agung representation of the BFO at the informal meetings of the heads of delegations. The Republicans will probably seek to have Vleer removed to a proper position and an Indonesian representative appointed in his place. They will also seek to have the Indonesians in the BFO bring increasing pressure on Hamid and Anak Agung.
Hatta to visit London 12. Hatta had been informed that if he went to London this week, Bevin would see him before leaving for the United States. Hatta was considering going after a firm date had been established for the opening of the Round-Table Conference when there could be no accusation that the Indonesians were responsible for delays. He has put off the trip, however, until Bevin returns in September as a result of advice that the Dutch would not take kindly to the visit. I agree with the postponement. As mentioned earlier in this letter, I believe that sometime during the Conference considerable pressure will need to be exerted on the Dutch. Hatta's visit now in the light of the Dutch reaction might cause the British some embarrassment and affect their willingness to join in the pressure when the need arises.
13. In London I talked with Dening and Scott. It was my impression that the British tend to minimise the difficulties ahead and to over-emphasize the dangers of bringing pressure to bear on the Netherlands.
14. I should be glad if you would show this letter to John Burton and anyone else who may be interested. I shall continue to send regular reports to John knowing they will be passed on to you.