After the May agreement these hastily sought to come to terms with the republicans, realising that they would certainly enjoy a dominant position in any future regime for Indonesia. They became as keen as the republicans to secure the handover of effective power, and were finding the Netherlands authorities almost as reluctant to hand this to them as to the Republic.They were therefore willing to agree with the republican leaders that the sovereignty of the new state would derive partly from the Republic, as well as from the Netherlands. They accepted that the Republic would provide the nucleus for the future federal army and that the individual states would not maintain their own armed forces.
The Republic would be restored to the territory it had held at the time of the Renville Agreement. Ajoint committee would be set up to co-ordinate their activities. The effect of this was that, even though the republicans accepted that they would have only a third of the representatives in the new assembly, from this time the Republic effectively dominated the forces negotiating with the Dutch. The fifteen Dutch-created states were numerically superior to the republicans, and negotiated separately. But there was, from this point, increasingly a similar viewpoint among all the Indonesian representatives.
The Round Table Conference began in the Hague on 23 August 1949. The UN Commission was represented throughout and had a considerable influence on the negotiations. It had no specific instructions from the Security Council on the line it was to take but was guided partly by past UN resolutions, especially that of 28 January, and partly by its own judgement and knowledge derived from the experience of the previous months. All decisions of the Conference were to be taken by unanimous decision, and when there was disagreement the Commission was asked to mediate. The Conference lasted for two and a half months. By 2 November agreement had been reached on almost all points. On a number of the most crucial questions - including New Guinea, the conduct of foreign relations, the transfer of debts to Indonesia, the withdrawal of Dutch forces, the Surabaja naval base, and the issue of currency - the UN Commission was explicitly asked to mediate by the two sides; and it did so successfully.
The two most controversial points were the future of New Guinea, and the debts of Indonesia to the Netherlands. Both were resolved largely through the intervention of the Commission. On West New Guinea the Dutch demanded that the territory should not be included in the general transfer of sovereignty, on the grounds of its different ethnic character and more backward political development. The Indonesians insisted that it should be included, on the grounds of its similar historical background and geographical continuity. The Federalists, representing somewhat comparable territories, were even more insistent on the point than the republicans.
The compromise put forward by the UN Commission provided that the issue should remain undecided until further discussions in the following year (which eventually also failed to reach agreement). In effect the Commission suggested that disagreement on this point should not be a barrier to a conclusion of an agreement on the rest. On the debts the Commission proposed a com promise between the hugely differing figures proposed by the two sides. Under its proposal Indonesia was eventually to assume responsibility for 3000 million guilders of internal debt (including, astonishingly, all of the cost of the Dutch military effort against the Republic) and 1300 million guilders of external debts. Much of this was in fact never paid.
The Hague Peace Conference
