Since the commencement of the current talks in Batavia, I have had
little time for letter-writing. However, my telegrams (Nos K.298
to K. 309 [1]) give a full account of the exchanges between the
parties since the commencement of the talks on 14 April, and you
will have received by bag copies of all relevant Commission
documents including the Republican working paper (document No.

S/AC.10/CONF.3/W.1, see K.299 [2]) and the Netherlands reply
(document No. S/AC.10/CONF.3/W.4, see K. 301 [3]).

2. The last formal exchange was the presentation of the Republican
working paper on 21 April. Since then the parties have been
negotiat[ing] underground with Cochran exerting a direct and
significant pressure (particularly on the Republicans) when the
going became tough.

3. To make your record complete I attach a copy of the letter [4]
of the Republican delegation which was drafted in answer to the
Netherlands working paper and as a comprehensive statement of the
Republican position. This letter was designed to force an early
show down so that advantage could be taken of the influence of the
General Assembly. You will recall that it had been held up at
Cochran's instigation (K.302 [5], paragraph 2).

4. Herremens and I have been excluded from the recent informal
talks. In fact, however, I have kept in closest touch with their
progress through the Republican delegation which has consulted me
on all points.

5. In my talks with the Republicans I have stressed the importance
of their stating their position and their demands as clearly and
early as possible. It has also been necessary to assist with the
drafting. For example I have pointed out the importance of the
Republic not surrendering its position under paragraphs 3 and 4 of
the 28 January resolution [6], by accepting unconditionally the
Netherlands invitation to a conference at The Hague as Cochran's
draft meant. I have also stressed the importance of insisting on
an unambiguous paragraph 7 in the Netherlands statement (see K.

306 [7]).

6. At the same time it has been evident since Hatta's visit to
Batavia that he would be prepared to make concessions. This is
based on:

(a) the belie[f] that Van Royen's sincerity should be given the
benefit of the doubt and that he should be assisted to overcome
political difficulties at Batavia and The Hague.

(b) the conviction that the Security Council will not impose
sanctions and that there is little prospect of additional material
help for the Republic from the outside.

(c) the fear that the Republic's position may be weakened by
growing communist influence. Apart from ideological issues
Republican guerillas may be growing short of arms and ammunition
while only the communists have sources abroad. There is already
evidence of increased Chinese communist activity.

(d) a tendency to depend on and trust unduly State Department
influence, while underestimating the opportunities of influencing
American public opinion.

(e) a belief that Federalist Indonesian support can be won over
and that the Dutch can be forced to compromise at a conference at
The Hague where it is hoped the old colonial influence may be
weaker.

(f) the desire to encourage the Republican people by tangible
evidence of the Republic's vitality as would be afforded by the
restoration of the Republican Government in the residency of
Jogjakarta.

7. The probable result will be that the Republicans will go to The
Hague without obtaining all the safeguards that would be
desirable. Specifically Hatta's attitude has meant that the
Republican Delegation was not prepared to take my advice and
insist on a specific Netherlands commitment regarding trade (see
point (vii) paragraph 7, K.302) and has not insisted on a clear
statement that the Netherlands Government would not create new
States or Negaras on territory under Republican control prior to
December 19, 1948. On this latter point I had suggested that
appropriate wording might be 'on the understanding that any final
agreement between the parties will include the right of self-
determination of the Indonesian peoples as recognized by the
Linggadjati and Renville Principles [8], the Netherlands
Government will refrain from the establishment or recognition of
Negaras and Daerahs on territory under Republican control prior to
December 19, 1948 and from the expansion of Negaras and Daerahs
affecting the said territory'. I know Koets has exerted
considerable influence in obtaining rejection by the Netherlands
Delegation of such unambiguous wording. I am afraid that some
sections of the Netherlands Delegation have not given up the idea
of forming new States which they would explain away as based on
the freely expressed will of the people.

8. In any event, Hatta is sailing close to the wind. As I
explained in my K.307 [9], there is criticism in some Republican
circles of the policy of the Delegation so far and of its failure
to take an early and decisive initiative.

9. As also explained in my K.307, the immediate issue on which
preliminary agreement depends is whether the Dutch will agree to
the restoration of the Republican Government in the whole of the
residency of Jogjakarta. I expect conditions regarding Maguwo
airfield, but it is impossible to say how important such
conditions would be before we receive a Netherlands response which
is expected some time today (7 May).

10. In explaining in K.307 the reasons behind the apparent change
of attitude by the Netherlands I forgot to mention that the
Republican reaction to the first Netherlands draft statements
undoubtedly shook Cochran and Van Royen. Roem and other members of
the Delegation went to Cochran with a request for the use of the
Commission's plane so they could return their mandate as a
delegation to Hatta.

11. I am also attaching the following papers which may be of
interest:-

Attachment 'B' [10]: 'The Leimena Plan'. This has been presented
to the Netherlands delegation by the Republican delegation during
the informal talks. It has not been seriously considered to date
but may form the basis for further discussions on the actual
implementation of the return to Jogjakarta if there is agreement
on principle.

Attachment 'C' [11]: 'Questions in connection with the proposed
Round Table Conference.' This document has not been submitted but
has formed the basis of a series of questions informally addressed
to Van Royen by Hatta (see my K.307).

Attachment 'D': Schedule comparing exports from Indonesia for the
years 1938, 1939 and 1948.

Attachment 'E': Schedule showing development of exports from
Indonesia during 1948.

Attachment 'F' : Article from 'Warta Berita', Medan, 'Ali
Budiardjo, strong man among the guerillas'. You will remember that
I have previously referred to Ali Budiardjo's importance (see
letter [12] to McIntyre dated 22nd March, page 1A.)
Attachment 'G' : 'Dutch and Opium' by Quentin Pope.