1. The following cablegram has been received from the Prime Minister of the United Kingdom :-
Begins. 'In response to various suggestions and requests which I made to the President  for the common conduct of the war against Japan, I have received a message containing the following passage:-
We concur in your estimate of the importance of the Indian and Mid East areas and agree that reinforcements are required. We also agree that the Australian and New Zealand Divisions now in that region should remain. The 41st Division is leaving the United States by the 18th of this month, reaching Australia about 10th April. As replacement for Australian and New Zealand Division[s] allotted to the Mid East and India, the United States is prepared to despatch two additional divisions, one to Australia and one to New Zealand. A convoy of one-half a division could leave about 15th April and the remainder of this division about 15th May.
Another United States division can also leave for the south-west Pacific about 15th May. It should be understood that our willingness to despatch these two divisions over and above the 41st which is already set up to go is based on the necessity for economising in shipping and the continuing security of the Mid East, India and Ceylon. It is therefore dependent upon the retention of a similar number of Australian and New Zealand divisions in those theatres. The above movements in the south-west Pacific can be accomplished, provided that some twentyfive cargo ships are withdrawn for one voyage from those engaged in transport of lend lease material to the Red Sea and to China and scheduled to sail in April and May.
2. Our 5th British Division is about to sail from the United Kingdom. The President has also promised to give me the shipping to move two additional British divisions (40,000 men) in April and May and we are sending further British divisions in our own ships during the next few months. How these divisions will be disposed between the Mid East and India must depend upon how things are going when they have rounded the Cape. We have also postponed for an indefinite period the completion of the movement of various United States divisions into Northern Ireland and Iceland on which we had counted in order to facilitate all the above movements of troops to the East and Far East.
3. You may be sure that the presence of considerable United States forces in the Anzac Area will emphasize to the United States the importance of protecting that area by its main sea power and also of accelerating the equipment of existing Australian forces for which I am pressing.
4. I hope in these circumstances you will feel able to leave the 9th Australian Division in the Mid East where its presence is most sorely needed. We will send on the brigades of the 6th Division which you agreed might be stopped off for a while at Ceylon as soon as the min[imum]  arrangements for this all important point can be made.' Ends. 
2. The following is the report of our Chiefs of Staff:-
'The Chiefs of Staff referred to the following considerations relating to the proposal to substitute an American Division for the 9th Division A.I.F. in Australia.
(1) Military (a) The substitution would not mean any diminution in the number of troops to arrive in Australia by about mid-June, as it is estimated that the American Division would arrive here as soon as the 9th Division A.I.F. could be expected.
(b) The substitution would result in a large saving of shipping, as it would mean one move only, that is, a Division from the United States of America to Australia, and not two as would be necessary if the 9th Division were to be brought to Australia, and another Division taken to the Middle East to replace it.
(c) Acceptance of the proposed substitution would probably expedite the return to Australia of the two Brigades of the 6th Division A.I.F. which are now in Ceylon.
(2) Political The consideration which is mentioned in paragraph 3 of the cablegram that the presence of considerable United States forces in the Anzac Area will emphasize to the United States the importance of protecting the Area by its main sea power, and also of accelerating the flow of equipment from the United States for the existing Australian forces.
Taking these factors into account, the Chiefs of Staff recommend that the proposals should be accepted, notwithstanding that the American troops would not be so highly trained as the 9th Division with its war experience.' 3. It is desired that you discuss this matter with the President as early as possible to ascertain the strength of his feelings on this request. You will note from the early part of his message to Churchill that he expresses agreement that the Australian and New Zealand Divisions now in the Middle East should remain there. This would indicate that notwithstanding our original decision  and assurances from Churchill , the latter has originated something with the President on this matter. On the other hand Page's comments on Churchill's cablegram show that Churchill attributed the origin of this request to the President. 
4. The following special observations are furnished in connection with your discussions with the President:-
(a) In offering two brigade groups of the 6th Division for the purpose of temporarily adding to the garrison of Ceylon, we stated that we were relying on the understanding that the 9th Division will return to Australia under proper escort as soon as possible.
(b) In the Chiefs of Staff's appreciation communicated to Washington in cablegram No. 55 , it was stated that the minimum forces required for the defence of the whole of Australia are:-
Army-25 divisions Air-64 first line squadrons 9 transport squadrons.
(c) In regard to the Army strength, it was stated that the strength mentioned is the minimum until such time as adequate naval and air forces are available, and that 10 fully equipped divisions would have to be supplied by our Allies.
(d) With reference to adequate naval forces, you are aware of the views of the Australian Chiefs of Staff on the concentration of an Allied force of sufficient strength to challenge the Japanese Fleet at any moment.
This would be a general deterrent to a seaborne operation, such as a large-scale invasion of Australia. In regard to the strength of the naval forces in the Anzac Area, you will have received my SW.18  relative to the increase considered necessary.
(e) With reference to adequate air strength, you are aware that we have 15 first line squadrons, that supplies of aircraft are required for expansion of the R.A.A.F. and for its maintenance, and in the meantime an increase in American air strength in this country is urgently necessary.
(f) Adequate naval and air strength do not therefore exist, and we have no assurances as to the rate at which they will be provided.
The only promise of increased land strength is one American Division due to arrive about 10th April, and the conditional promise of another Division if the 9th Division is allowed to remain in the Middle East.
(g) The President in his message to Churchill regarding the division of the World War theatre into the Atlantic, Middle and Pacific Areas said:-
'There would be a middle area extending from Singapore to the Mediterranean which would be a British responsibility, it being understood, however, that Australia and New Zealand would give as much assistance to this area as their Governments could manage and the Americans would allocate to it all possible munitions and merchant ships.' We have all along based our views on the return of the A.I.F. on the fundamental consideration that our first responsibility is to ensure the security of Australia as the main base in the south- west Pacific. We must be assured of this before we are in a position to assist elsewhere.
(h) Finally, there is an important psychological aspect relating to the retention of the 9th Division in the Middle East. As their comrades have returned to Australia, these troops cannot be retained abroad [in]definitely without their morale being affected, particularly as they know that the others returned because their homeland is threatened. There is also the aspect of maintenance of this Division by the regular flow of reinforcements overseas.
5. You should be aware that the New Zealand Government, in regard to a similar request for the retention of its one Division in the Middle East, has stated that it requires a minimum of 6 Divisions, of which it has provided itself with three. As you will have noted it is being promised one.