1. Reference your E.S. 21.  Action taken has been noted.
2. MacArthur is concerned at the possibility of some misunderstanding arising through your use of the expression 'minimum forces' in Paragraph 1. If this refers to the statement of forces and equipment mentioned in Paragraph 4 of S.W. 34  the latter is the strength of the Australian forces that exist or can be raised but for which equipment is required to place them on a war footing. Australia's minimum is the maximum of which she is capable but is not sufficient for the defence of Australia as a base.
3. In regard to American forces additional to those already allotted MacArthur has cabled Marshall  asking for the following, information in regard to his directive and its fulfilment- (1) The nature and extent of the offensive action contemplated.
(2) The forces to be allotted to him to enable offensive action to be taken.
(3) The dates on which it is proposed to make such forces available to him.
4. He seems somewhat disillusioned in regard to his earlier expectations of support in the South West Pacific Area and his attitude could be expressed as one of determination to have a 'show-down' with Washington about the precise terms of his directive and the forces which were to be provided to enable him to fulfil it. He emphasised that it would be a weak course for him to allow the President  and Mr. Churchill to leave him with a directive which sounded grand but had no backing behind it.
5. You will be aware of Dominions Office cable No.390  containing the negative reply to the requests which were made on MacArthur's recommendation. He rightly says that the nature and extent of the cooperation between the Australian and United Kingdom Governments in military assistance is of course nothing to do with him but in view of his responsibility as Commander in Chief in the South West Pacific Area for ensuring the security of Australia as a base for operations he feels impelled to ask the Government to press for the return of the 9th Division as early as possible. He has noted that the troops in Ceylon will be relieved about the end of May, yet strongly recommends that the United Kingdom Government should also be asked to state a definite time for the return of the 9th Division. He wishes to point out that it would be too late to seek the return of these forces with any assurance that they would reach Australia should Japan decide to move in force against the Commonwealth. He has repeated his statement embodied in my cable No. SW.34 of 28th April that the American forces allotted together with the strength of the Australian forces will not be sufficient to ensure an adequate defence of Australia as the main base in the event of a major attack.
6. Blamey  concurs with MacArthur's view that the Government should strongly press for the return of the 9th Division as early as possible. He has again emphasised the psychological aspect both to the troops themselves and the public here of those forces being allowed to remain abroad indefinitely in view of the local defence position.
7. You will be interested to know for your personal information that Churchill's reference to reporting our requests to the President for any further action resulted in MacArthur receiving a rebuke through Marshall to confine any requests for forces to General Marshall.
8. MacArthur is very sceptical about the degree of assistance that will be extended to the South West Pacific Area and he expressed the opinion that it would be very difficult to get the President or Mr. Churchill to deviate from the view that all efforts have to be concentrated on knocking out Germany first. He said he could not understand the illusion that with the defeat of Germany Japan would just collapse. She would be in a very strong position either to resist attack or to bargain at any peace conference. In any event it was not the quickest way to win the war.
9. The Commander in Chief considers that the reference in Dominions Office cable No. 382 of 27th April  relative to the inability to carry out large-scale combined operations against the Malay barrier until Germany has been defeated is also very significant and confirms his view mentioned in Paragraph 8.
10. MacArthur said that American enthusiasm for his appointment was not a personal tribute to himself but a manifestation of a hope that through him offensive action would be taken against the Japanese in the Pacific. He pointed out that American opinion was overwhelmingly in favour of such a policy and was not nearly as enthusiastic for offensive action in Europe. The Commander in Chief was of the view that the way in which a second front should be created to assist Russia was by carrying out a vigorous offensive against Japan. This would give Russia two alternatives.
She could either withdraw some of her best troops from Siberia to Russia if they were needed to withstand the German offensive or if she could hold the Germans she could use these forces to eliminate the Japanese menace to Siberia by striking at Japan from the north whilst we attacked her from the south and east. He considered this strategy offered greater potentialities than hammering our heads against a brick wall in Western Europe as Haig  had done in the last war against the Hindenburg Line. MacArthur was of the view that the Australian Government's proposals in November 1941 to the United Kingdom Government for an agreement with Russia for reciprocal aid in the event of Japan entering the war was a bold conception of both world and Pacific strategy.  Mr. Churchill's reluctance to approach Russia to enter the war against Japan was an indication of his determination to stick to his own course of action without regard to a bolder move which might change the whole course of the war.
11. The foregoing represents the position we had reached in discussions here to the receipt of Z.57 through the High Commissioner of the United Kingdom  relative to the creation of a second front. It is evident from this and the view expressed in Dominions Office cable No. 382 that the concentration in the South West Pacific Area of forces for large scale combined operations against the Japanese is ruled out. The capacity to do this was one of the essential conditions for taking the strategic offensive in the Pacific as outlined in Dominions Office cable No.
362.  The plans for the concentration of a superior fleet in the Pacific also appear equally indefinite. We would be glad therefore to have your first hand impressions of the decisions relating to a second front and your own conclusions on the subject. The appreciation of the Combined Chiefs of Staff on the total war position asked for in S.W. 34 would also enable us to see the situation in their perspective.
12. If the surmises in Paragraph 11 are correct the predominant consideration and objective in the South West Pacific Area now is the security of Australia whether or not it is to be used as a base for offensive action. I am arranging a further discussion with MacArthur to obtain his views on a statement of the forces required for this more limited purpose as distinct from the broad terms of his directive. If you advise that any idea of an early large scale offensive from this area has been abandoned we can then press for the defensive strength that is necessary including the disposition of the 9th Division. MacArthur urges that the reinforcement of Australia is a matter of great urgency as naval action by Japan may soon hinder it. I shall advise you further as soon as I see MacArthur in Melbourne but desire by end of week your impressions as asked for in Paragraph 11 after consultation with Bruce.