This week I am attaching the interesting Dutch documents. The
first [1] is a confidential memorandum to the members of the
States-General, from a number of officials, Dutch and Indonesian,
in the Netherlands Indies Service. Although I have not seen the
original of this document, I believe it is authentic. It provides
a useful insight into Dutch difficulties in Indonesia. One aspect
worth pointing out is the threat of what is described as a
'counter terror'. Republican sources are already reporting that
the Netherlands forces in Indonesia have initiated a terror
campaign to break the spirit of the people (see my K.286 [2]).

From the outset there have been powerful influences (such as
Spoor) whose objective has been the crushing of the real
nationalist forces irrespective of the blood letting involved.

Even moderates among the Dutch talk of Indonesian respect for
'power and authority'.

2. The second document is an account [3] of a visit to Djokja from
the 17th to 21st February, 1949 by Dr. F.L. Bakker, a Missionary
Consul. This account shows the marked contrast between present
conditions in Djokja and those before the second military action.

3. Both documents help to demonstrate the falsity of the Dutch
arguments that the Republicans cannot be permitted to return to
Djokja. Van Royen's speech [4] in the Security Council on March 10
was depressing and, in its account of the difficulties associated
with the re-establishment of the Republic at Djokja, deliberately
designed to mislead the Council. It is evident that so far the
Netherlands have given no real consideration to the question of
what concessions they should make to nationalist forces in
Indonesia but are still following a policy designed to hold on to
the Indies as completely and as long as possible. As suggested in
my first paragraph, this is a policy which will bring misery to
the local people. It will also result in further economic
destruction and finally create even more serious political
problems for the Indonesians, the Dutch and everybody else. I am
convinced that the Dutch will only change this
policy under the strongest pressure. In the final analysis the
United States must say, 'Do this in such a time or else we shall
support severe economic sanctions against the Netherlands'.

4. All of the foregoing, of course, supports the need of a firm
policy by the Security Council. Among its other defects the
compromise proposal currently proposed by China and Canada in the
Security Council would tend to encourage the Dutch in their
obstinacy. I was glad to note the instructions passed on to New
York that the objective of the Council should be to insist on
compliance with the resolution.

5. I regret that in my telegram No. K.286, I over-telescoped my
objections to the Chinese compromise proposal [5] and did not
spell out the 'awkward questions regarding Republican
participation' in negotiations for return to Djokja. Briefly I had
the following in mind. Republican leaders, while they are without
territory, must be regarded as under duress. In this position they
can make arrangements for return of the Government to the capital
and for resumption of the administration of Republican territory.

It is open to doubt, however, whether the leaders would be
prepared to 'negotiate' before their return. Negotiations presume
a government. This means that members of the Government at present
with the guerillas in Central Java and those with the Emergency
Government in Sumatra must be brought together with those at
Bangka, Batavia and Djokja. It would be easy to arrange such a
meeting in Republican-controlled territory, but far from easy in
territory now under Dutch control. Assuming that the Republican
leaders at Bangka agreed to negotiate conditions for their return
to Djokja, it is possible such negotiations would be rejected by
the Emergency Government. Already there has been criticism in
Republican circles that the Bangka leaders have been taking
decisions which should have been left to the Emergency Government
which was given power on 19 December. A conflict at this stage
between the leaders on Bangka and the Emergency Government would
weaken Republican authority, create added confusion and generally
increase the difficulties of resuming negotiations in a
satisfactory atmosphere.

6. Finally I agree with you that the preliminary conference might
get nowhere, while protracting delay. Probably the Dutch would
open the negotiations by suggesting compromises which could not be
acceptable to the Republicans. Herremans has hinted, for example,
that Dutch troops might be retained in Djokja-an impossible
condition if law and order are to be restored and if the
Republican leaders are to speak with authority. Furthermore I
should not be surprised if the Dutch endeavour to force the
Republican Government out of Java to Sumatra by suggesting it be
established in Atjeh. A further argument which the Security
Council should bear in mind is that the longer the delay the more
difficult it will be to implement the Resolution or indeed find
any overall solution to the Indonesian question.

7. Attachment 3 [6] is a special report by the Milex Board on the
area Jogja-Magalang-Salatiga-Solo. It further supports the
conclusions already forwarded to the Security Council, that active
military operations are continuing in Indonesia.