Reference telegram from High Commissioner Wellington No. 452 of the 23rd November. 
I saw Prime Minister  yesterday afternoon before receipt of the telegram under reference and he informed me that he had heard from Casey in London a day or two before that the New Zealand Government had notified United Kingdom Government of their intention to despatch a force overseas at an early date .  New Zealand Government and Commonwealth Government have hitherto kept closely in touch as to their respective defence measures; but no intimation of this decision had been received direct from New Zealand Government. Commonwealth Government at once telegraphed New Zealand Government  and were informed that the reason why New Zealand Government had not informed Commonwealth Government of their decision was that they had anticipated that you would do so, and that the reason underlying the decision to despatch force overseas was that training facilities in New Zealand were such that training of the second brigade could not be begun until the first had been got rid of. 
No decision had yet been reached, the Prime Minister said, as to despatch overseas of so called sixth division now under training in Australia, but Casey was now urging now [sic]  in view of New Zealand decision, arrangements for very early despatch overseas of Australian force should be put in hand at once.
Reasons why no decision had yet been reached were:-
(1) It was not obvious that there was at present any need for further man power on the Western Front and it was thought better therefore to carry on training as far as possible in Australia.
(2) Labour Party were definitely opposed to despatch of any force overseas. If and when activity on the Western Front flares up, and there was visible need for men, this opposition would disappear and the force would be despatched by unanimous consent. It seemed undesirable to force Labour into strong opposition unless there was real necessity.
(3) The utmost difficulty had been experienced in obtaining shipping for wheat and for concentrates. In the opinion of the Commonwealth Government, it was, in the present stage of the war, more important to ship commodities than to ship men, and they would be reluctant to see shipping, already so difficult to obtain, diverted to the needs of expeditionary forces which was at present unnecessary.
(4) If Germany invaded and conquered Holland this would leave the Dutch East Indies masterless and they might prove too tempting a bait for Japan.
(5) He and his colleagues understood that success of air training scheme was infinitely more important than despatch of one or two divisions overseas. So long as it was understood in Australia that air trainees would definitely proceed overseas while destination of sixth division was uncertain, recruits would be attracted to the Air Force rather than to the Army. As soon, however, as it was known that sixth division was proceeding overseas at an early date there would be a clamour for establishment of further divisions for overseas and the majority of possible recruits would prefer the Army to the Air Force. As it was he anticipated considerable difficulty in enlisting Australia's full quota for Canadian scheme.
In these circumstances, the Prime Minister said, New Zealand Government's decision, which he felt must have been taken without very full consideration of the relevant circumstances, was embarrassing to the Commonwealth Government and he was about to telegraph Savage urging that no public announcement should be made without further consultation between the two Governments.
Soon after I left the Prime Minister Daventry announcement was received here.  As soon as the telegram under reference had been deciphered about 10 p.m. last night I saw the Prime Minister again. He said that Daventry announcement had been received while his telegram to New Zealand was being despatched and that the latter had then of course been cancelled. Commonwealth Government were now placed in a position of very considerable embarrassment.
There was rivalry in patriotism between New Zealand and Australia which, while perhaps foolish, had to be taken into account.
Announcement of New Zealand's decision would give rise to demand in Australia, which he did not think could be resisted, to send force overseas at least as soon as New Zealand, but even if the Government yielded to this demand, as he anticipated they would, it would still be incontestable that their hands had been forced and that they were merely following New Zealand's lead. Labour Party would be thrown into strong opposition, which was particularly undesirable at the moment, and other considerations against sending a force, enumerated above, would have to be disregarded. Decisions of such importance ought, he said, if possible to be reached in consultation between the two Governments and announced simultaneously. He was obviously highly incensed at the New Zealand Government.
The Prime Minister ended by saying that he did not feel that there was anything that could usefully be done in the matter, but he wanted you to know the background.
Incidentally with regard to the suggestion in the telegram under reference that Mr Savage's  message to Mr Chamberlain  was based on considerations suggested by Mr Menzies, I gather that the latter's telegram to Mr Savage was confined to considerations enumerated above and did not refer to sea dangers.
Cabinet will consider the question on Monday and will almost certainly decide to send sixth division overseas as soon as shipping available.