Cablegram.342 WASHINGTON, 22 February 1942, 1.54 p.m.
Received 22 February 1942
MOST IMMEDIATE MOST SECRET
Reference Prime Minister's telegrams 40  and 41. 
I delivered contents of the abovementioned telegrams to President  at once. He made very little comment, confining himself to saying 'well, if they have made their minds up, that is the way it is. I still hope, however, that they will be willing to discuss the matter in respect of last Australians to move from Middle East.' After saying that Prime Minister's message would have no effect on movement from United States to Australia of 41st American Division, he went on to speak of the way his military advisers were now visualizing the whole problem. Generally, whereas they had previously contemplated attempt to regain step by step the islands of the Netherlands East Indies from Australia as a base, they had swung round to idea that this would be an exceedingly difficult task, involving shipping and naval forces, and that they now favoured the plan of building up sufficient forces (particularly air forces) in Australia to hold Australia, whilst they made their main attempt to embarrass the Japanese by an eastward movement from Burma or from area at north of Bay of Bengal.
The President did not develop latter idea, but went on to say that he realised that an appreciable proportion of American aircraft production over next  would have to go into Australia and India.
He stressed shipping difficulty and asked if we could make any contribution to this aspect of the problem 'even to extent of say 1,000 tons on each ship taking goods from United States to Australia over next couple of months'. I said that I would put this question to you at once.
He mentioned contribution towards the security of the coastal areas on cast of Australia that was being made by combined naval operations in area just east of Solomon Islands. He said most confidentially that they had made contact with Japanese air forces (presumably based on New Britain) and that they had destroyed at least twelve Japanese bombers at small aircraft loss to themselves and without any naval loss. He stressed necessity of no public reference at all to these naval operations.