My Government has recently given consideration to a combined Far Eastern Appreciation of the Australian Chiefs of Staff, February, 1941 , which is summarized hereunder:
The situation on which the appreciation is based is as follows:
A. The war position is that obtaining on 13th February, 1941.
B. Japan creates situation result of which British Empire and Netherlands East Indies forced declare war on her and therefore allied.
C. Direct intervention by U.S.A. uncertain.
Comparison of Forces indicates- I. Whatever move Japan decides to make, she has ample Naval Forces to spare [to]  attack trade in Indian Ocean, Netherlands East Indies and Pacific. Attack trade routes probably by one or more heavy armoured cruisers or squadron 6 inch or 8 inch cruisers, possibly accompanied by aircraft carriers.
II. Regarding military forces, she has minimum 10 Divisions, for which requisite shipping available. She can provide a preponderance [of] Forces in any two of three principal areas- Malaya, Netherlands East Indies and Australia.
III. Japan can make available Air Forces which are greatly superior in numbers reserves and homogeneity to the combined British and Dutch Air Forces in the Far East-340 carrier borne aircraft, 650 shore based aircraft. Total British and Dutch strength 503.
Sea communications most likely to be threatened are:-
a. Indian Ocean, mainly Eastern section.
b. South China Sea, Western Pacific (North Australia).
c. South-Western Pacific, including Tasman and Trans-Pacific routes.
Although Malacca Straits might be denied to Japanese Naval Forces, these Forces might elude or destroy Dutch Forces guarding many passages through Netherlands East Indies and operate against our communications in Indian Ocean, which greatly facilitated if Japanese established advance bases in Netherlands East Indies.
Dispositions of N.E.I. Forces in forward line to guard Straits there, i.e., the line North Borneo, North Celebes, North-Western New Guinea, will provide best protection against such Japanese naval action.
Trade route in Indian Ocean most seriously threatened is that between Colombo and Singapore. Remaining routes are so remote from Japan that, unless she first captures the N.E.I., they can scarcely be said to be threatened except by raiders.
Use of N.E.I. bases by our Forces would assist maintenance communications between Malaya and Australia-New Zealand.
War effort of Australia and New Zealand has its principal focus in area of Tasman Sea and, if command this area lost, transport troops and trade by both Dominions would cease or [be] reduced to trickle; this area very open to attack. With their existing bases in Mandated Islands and numerous potential advance bases further south, will be little difficulty and every advantage in Japanese maintaining there constantly cruiser force which could well be spared, even though main attack elsewhere. In absence British cruiser force adequate counter them-Australian New Zealand trade and shipping could be held up indefinitely outside range shore based aircraft. Furthermore, area of South-West Pacific of great importance relation U.S.A. Naval assistance, which must move from North-Eastern Pacific to the Western Pacific to exercise necessary pressure. Great emphasis laid on importance of line approach Singapore, i.e., Honolulu, Fiji, Darwin, Singapore. This line considered most favourable for U.S. Naval reinforcements. Very important prevent Japanese gaining foothold across line, i.e., New Guinea, New Hebrides, New Caledonia, Fiji. If they succeeded, would make passage American reinforcements hazardous.
Our object is make best dispositions possible secure our most important interests.
Considered there are three main courses of action Japan may take:-
a. Invasion Australia or New Zealand.
b. Attack Malaya with object seizing Singapore.
c. Attack Netherlands East Indies object enforcing separate peace with Dutch.
Other contingencies against which Japan must provide- a. American interference Western Pacific.
b. Movement reinforcements from Australia.
c. Movement reinforcements from India.
CONCLUSION Invasion Australia New Zealand ruled out initially; most likely course by Japanese attack Malaya object capturing Singapore.
Retention Singapore base vital to security Far East.
Security Netherlands East Indies vitally affects that of Singapore and Australia.
While sea routes Indian and Pacific Oceans vital importance for maintenance trade and continuance war effort in Middle East and United Kingdom, security South-Western Pacific essential safe passage to and operation of American Fleet in East Indies area in event American intervention.
Naval and Air Forces should be employed prevent Japanese establishing naval and air bases within striking distance our vital interests, while sufficient Forces must be retained for local defence and defence sea communications.
Army policy [for] defence measures [in] each allotted area [should be] that, while main Army Forces provide final opposition against invasion, provision must be made [to] garrison outlying bases [to] ensure continued operations [of] naval and air forces.
The following main recommendations of the Chiefs of Staff have been endorsed by my Government:-
While must be accepted that defence of area including Malaya, N.E.I., Australia and New Zealand one strategic problem, responsibilities each Government for defence its own and common interests must be arranged and clearly defined. Practical scheme reinforcement must be worked out, which will ensure rapid concentration any threatened point of Forces drawn from resources strategic area as whole. Northern limits of Australian and New Zealand area responsibility line inclusive Timor, Sermata Island, Taninbar Islands, exclusive Aru Island, to South Coast New Guinea at 141st meridian, inclusive Mandated area New Guinea and Nauru.
Definitions limits Malayan and Netherlands East Indies responsibilities matter for consideration by parties concerned.
Conclusion Singapore Defence Conference, 1940, Part I , para.
27, that minimum naval forces considered necessary Australian New Zealand waters provided only by return all Australian and New Zealand naval forces now serving overseas, this conclusion reaffirmed. Considered, however, that matter be discussed forthcoming Singapore Conference in light information available as to complete plan disposition Naval Forces Far East. Would appreciate if necessary arrangements could be made by Admiralty so that these forces can be sailed Australia with minimum delay.
Information will be obtained regarding necessity for provision from Australia food, munitions and supplies to Malaya after outbreak hostilities, as will affect naval and air plans.
Australian Army is to arrange provision of garrisons necessary within Australian area, utilisation A.I.F. units outside mainland and local personnel where practicable, e.g., Papua and New Guinea.
This will involve additional commitments not hitherto contemplated. Having in view the limitations our Army resources of equipment, these commitments will have priority over any others in Far East. 8th Division will be retained use Australian Area and Far East, and present arrangement for it proceed Middle East join Australian Corps has been cancelled.
The Governments responsible should make dispositions and establish ground facilities in conformity with Part I, para. 6 of report of Singapore Conference, 1940. Concurrence Dutch authorities to be sought stationing Australian Forces in N.E.I., particularly Timor, should need arise.
Officers from each Service to be appointed Liaison duties in N.E.I.
As it is desired plans be completed at forthcoming Singapore Conference showing complete naval plan for Far East including Forces necessary Indian Ocean and initial disposition of East Indies, China, Australian and New Zealand squadrons, if full information is not now available on this subject my Government strongly presses for supply of information sought in paragraph 2 of my telegram No. 87 of the 12th Feby. , on this subject.