From the Prime Minister , for the Prime Minister:-(Begins):
1. I have to acknowledge your No. 207  informing us of the arrangements which you propose to make with the United States on the subject of air co-operation between the United States and Australia.
2. Your No. 208.  We note the opinions you have expressed and fully understand your point of view. It would not be possible for us as you suggest to uncover the whole of our sea communications with the Middle East, on which the life of the considerable armies fighting there depends. Neither would it be possible for us to neglect the security of Ceylon so far as it is in our power to preserve it, or to deprive ourselves of the means of reinforcing or defending India.
The despatch to the Pacific of three out of four of our fast armoured aircraft carriers would as you perceive leave any battleships we have placed or may place in the Indian Ocean entirely unprotected from air attack and consequently unable to operate. This would expose all our convoys to the Middle East and India averaging nearly 50,000 men a month to destruction at the hands of two or three fast Japanese cruisers or battle-cruisers supported by perhaps a single aircraft carrier.
While admiring the offensive spirit of your memorandum and sharing your desire for an early acquisition of the initiative we do not feel that we should be justified in disregarding all other risks and duties in the manner you suggest. These matters will, however, no doubt form part of the discussions which will take place in Washington when agreement has been reached upon the new organisation proposed by the President upon which I have sent you the views which His Majesty's Government in the United Kingdom have transmitted to the President. 
4. A more detailed commentary will be telegraphed when your proposals have been further studied by the Staffs.