I enclose herewith (attachment 'A' ) a copy of the Dutch proposals on which I reported in my cablegrams Nos. K.341 and 342.
 At s'Jacob's request the Republican Delegation agreed to treat the proposals as confidential and I was given the text by Ali Budiardjo for my personal information. The Republican Cabinet met to consider the proposals last night but no news is yet available as to its decision.
2. Nearly 7 weeks after the Cease-Hostilities became effective, the situation as at the Cease-Hostilities merely remains more or less 'frozen'. Neither party having been willing to concede the other's military position and to acknowledge it as having civil and military control over territory, but each seeking rather to consolidate its own position, the discussions on delineations and civil administration have either made little progress or reached deadlocks (the situation is very clearly illustrated in the report from the local Joint Committee at Kediri (attachment 'B' )).
Consequently measures for the restoration of law and order have been delayed and lawlessness continues at an abnormal rate; the civil administration is still unable to function freely and effectively; there have been no arrangements for supply and for many of the essential services for the population; the economy is frustrated and there can be only the most elementary measures for rehabilitation.
3. It is natural that events in Indonesia should largely wait on the RTC discussions and that neither party will be prepared substantially to change its position here until satisfied as to progress at The Hague. However, this attitude can be carried too far; the situation here cannot merely be 'frozen', because the military and administrative instability creates its own problems which, with the political tensions thereby provoked, and arising naturally in any case, from the static situation, place undue strain on the Cease-Hostilities and could lead to local breakdowns with the most unfavourable repercussions at The Hague.
4. Provisional local arrangements have been made in some areas to avoid contact between troops, but in general the forces remain intermingled and the only provision against a breakdown of the Cease-Hostilities continues to be the strict observance of the Cease-Fire and Stand-Fast. On the whole, this has so far been generally successful (though the Dutch still claim that the TNI effected widespread improvements of its military position and that only the restraint of the Dutch forces has prevented a resumption of hostilities). However, the scattered nature of the TNI dispositions, arising from their guerilla tactics, the extreme difficulty in contacting and in maintaining close contact with them, owing to the lack of communication facilities, the growing difficulty of supply and the attendant necessity for the TNI forces to move about and to requisition from the population, make the implementation of the Cease-Fire and Stand-Fast extremely difficult for the Republic; in comparison, the Dutch forces are coherently organized, in fixed positions, regularly rationed and supplied and are equipped with modern communication facilities and so in a far superior position to ensure co-ordinated and effective implementation of orders. It is now apparent that the Cease- Hostilities cannot depend much longer in some areas merely on the observance of the Cease-Fire and Stand-Fast. Early measures are necessary to relieve the military tension and to overcome the deadlock in administration and the delays in supply.
5. The provisions of the Cease-Hostilities Agreement and paragraph 7 of Van Royen's statement of 7 May  afford the machinery for this, but delineations are at best a temporary measure designed to buttress the Cease-Fire and Stand-Fast and to proceed with them at this stage appears pointless when larger opportunities are offering. The present Dutch proposals purport to offer these opportunities.
6. However, so long as the basic deadlock mentioned above continues, it is unlikely that any alternative arrangements will meet with any more success, and since it is the Dutch, who by the transfer of sovereignty must eventually surrender their military and administrative positions, it does not seem unreasonable to expect them to make the major concessions and the first moves to overcome the deadlock.
7. In their preliminary reactions to the Dutch proposals the Republicans showed that they suspected the proposal for troop concentrations, without at the same time any clear indication that a start would be made with Dutch troop withdrawals, to be a mere manoeuvre to weaken the Republican position. They were also unhappy about the emphasis on the Negaras and the Inter-Indonesian Conference, and the reservations concerning Bantam and the Semarang Recomba (where the Dutch have a Sultanate and the Central Java Council through which to intervene in inter-Indonesian affairs). They further complained that exclusion of the 'federal' services would involve the Republic in a subordinate position to the Central Government, which of course, is quite contrary to established policy. They were also worried as to how their acceptance of the proposals would be received by the population, and as to how co-operation with the Dutch along the lines proposed would affect the Republic's status as the leader of the independence struggle.
8. The first question then, as always, is what do the Dutch intend by their proposals and how far do they mean to go? While uncertainty in this respect persists, further discussions and new arrangements will have to deal with much the same problems as have already delayed progress in the last six weeks.
9. Further to my cablegram No. 342, we decided that Dow, Chairman of the week, had better visit Pasundan to find out what was going on. I attach a copy of his report (attachment 'C' ). It is interesting to note the extent of control the Dutch exercise over the Negaras. Should the Republican Cabinet accept the Pasundan proposal, it will be quite clear which party is delaying a settlement.
10. There has been no news as to Wongsonegoro's trip to East Java other than a press report that he found the situation 'stiff'.
Presumably he had little success.
11. I am also attaching for your information (attachments 'D'  and 'E' ) two communications concerning New Guinea, which have been received by the Commission.
12. I should be grateful if you could arrange for copies of cables from Tom Critchley to be sent to me by the weekly bag.