Because of the increasing activities of the Dutch East Indies administration then, the building which is now called Istana Negara was soon unable to meet the growing demand for space. Thus, in 1873, during teh Governor-General Louden's term of office, another building was consructed and completed in 1879, when Governor-General was Johan Willem van Landsbarge. The architect responsible for the construction was Drossare. The new building came to be known as Istana Gambir by the people of Batavia. In the early years of the Republic of Indonesia, this Palace witnessed the signing of the Nederlands; recognition of the sovereignty of the United States of Indonesia on 27 December 1949. The republic was represented by Sultan Hamengkubuwono IX and the Kingdom of the Netherlands by A H J Lovink, High Represntative of the Dutch Crown to Indonesia. Upon the signing ofthe recognition of the Republic’s soverreignity, the Indonesian flag was hoisted, replacing the Royal Dutch flag. The hoisting of the flag was accompanied with the signing of the Indonesian national athem Indonesia Raya (Great Indonesia), followed with the cheer “Merdeka!” (“Freedom!”) bythe Indonesian in unison. Probably this explains why the Palace came to be called istana Merdeka instead of Istana Gambir. One day after the signing of the sovereignty recognition, on 28 December 1949, President Soekarno and his family arrived from Yogyakarta. That day marked the begining of the First Family residing in Merdeka Palace.
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