440 Commonwealth Government to Lord Cranborne, U.K. Secretary of State for Dominion Affairs
Cablegram 268 2 May 1941,
Repeated to Prime Minister of New Zealand , Wellington No. 155.
Your telegram No. 298 , 3rd paragraph, indicating suggestions of discontent in French Pacific islands.
Following upon visit of Military Mission to Noumea, Ballard  recently returned to Australia accompanied by Captain Dubois of Free French Forces for discussions with War Cabinet.  Whole question of assistance to New Caledonia fully reviewed and following decisions were taken:-
(1) Defence Measures Commonwealth Government decided to make available certain supplies of arms, clothing and equipment to enable approximately one battalion (900 to 1,000 men) to operate effectively. Arrangements have also been made for the despatch of the Expeditionary Force limited to 600 men (300 from New Caledonia and 300 from Tahiti) from New Caledonia to Australia early in May, and the Commonwealth Government decided that this Force should be conveyed to the Middle East in an Australian convoy as soon as necessary arrangements could be made. In addition, arrangements are being made for installation of coast defence battery of two 6" guns at Noumea. New Zealand Government is providing guns and installation will be arranged by Australian personnel, who, after completion of training of local personnel, will return to Australia. Twelve Free French personnel are to be sent to Australia for instruction. It was also decided to establish an air advance operational base, including an aerodrome and flying boat base in New Caledonia.
R.A.A.F. will be responsible for all aspects of administration and personnel located at the base and some 30 R.A.A.F. personnel as permanent base staff will be located in New Caledonia. Captain Dubois assured Commonwealth Government that no objection would be raised by New Caledonian Government, but it was agreed that official confirmation of the arrangement would be obtained from Sautot  with the concurrence of de Gaulle. 
As regards supply of arms, clothing and equipment to Tahiti, it was decided that this question would be taken up by Commonwealth Government with Government of New Zealand. As regards expenditure incurred in connection with defence, Commonwealth Government would make finance available in first instance and expenditure involved would be merged in general account with Free French Movement. All questions relating to settlement of this advance to be subsequently adjusted between Governments of United Kingdom, Commonwealth and New Zealand and ultimately with Free French authorities.
(2) Economic Questions Commonwealth Government decided that New Caledonia should be accorded the same treatment as Australian State or Territory in so far as purchase by New Caledonia of its requirements from Australia is concerned. It was decided also that outstanding economic questions should be settled as soon as possible. Specific economic questions considered were as follows:-
(a) Coffee: Purchase of whole crop had already been approved by Commonwealth Government and only outstanding questions relate to machinery and procedure.
(b) Copra: As you are aware arrangements have been made for disposal of accumulated stocks of copra towards end of May, and consideration will be given to question of compensation, ex 'Suva' incident , when details as to price are received.
(c) Nickel: Position in relation to nickel seems to be satisfactory, and it is expected that market will be found for full production of approximately 10,000 tons matte by bringing into use third furnace.
(d) Chrome: Small miners producing between 12,000 and 14,000 tons require to be provided for. Lafleur, largest of small producers, recently visited Australia and said he could sell output to United States if shipping could be made available. This matter is being pursued, but if necessary shipping cannot shortly be produced it will be necessary for Commonwealth Government to purchase output.
(e) Ballard had conversations with Treasury regarding exchange position. You have been advised on this aspect in my telegram No.