494 Mr A. S. V. Smith, Secretary of the Department of Supply and Development, to Mr John Curtin, Prime Minister
Cablegram [ES]  42 WASHINGTON, 20 May 1942, 9.59 p.m.
MOST SECRET FOR PRIME MINISTER ALONE FROM SMITH
With reference to yesterday's telegram 762 forwarding President's reply  to your telegram 97  I had interviews with General Marshall  and Admiral King  on morning of 19th and cabled result of those interviews to Dr. Evatt  in London. As information supplied is of interest in connection with and supplementary to President's reply to you I am repeating it hereunder:
(Extract Begins.) In general terms Marshall stated supplies were continuing to go forward to Australia without cessation and that he fully appreciated position, as do other service people in the United States, and they are doing their utmost to meet it and also other demands which are being made on them.
He made the point that one of the most important factors for our area is the strength and safety of Hawaii, New Caledonia and Fiji.
He pointed out these not only control main supply lines to Australia but provide land bases from which aircraft can be operated to attack Japanese naval and other forces in the Pacific.
He stated that it would be a major disaster for Australia if this line and these bases were not strengthened and kept open.
He again emphasized [the calculated]  risks that are being taken by United States, particularly on the West Coast where some of the large [st] aircraft [plants] are situated.
King said both he and Marshall realised the responsibility of U.S.
in the Pacific and South-West Pacific areas and there was no question regarding the seriousness with which they regarded that responsibility. He said that the Coral Sea battle was but the first round and that other rounds will inevitably follow but at the moment the Japanese naval forces are still proceeding northwards away from Australia. He would like to see more land- based aircraft on islands which could support any U.S. naval action and made a point of the fact that allocations of aircraft as between U.K. and U.S. which were agreed upon prior to America and Japan entering war were still being adhered to. He thought there should be an adjustment by which U.S. would obtain more of their own production which in turn would enable them to strengthen the Pacific. He and other senior officers hope to discuss this matter with the President immediately. I mentioned the question of aircraft carriers. He said that under the existing conditions it was impossible to supply MacArthur  with carriers. King's strategy is to keep the carriers which they have (he did not mention the number) mobile in order to strike at the Japanese when and wherever this could be done. He went on to say that the U.S.
strength in the Pacific is being built up and position should be much better in about two months. In the meantime it is steadily improving. He said also that they were developing amphibious forces and not only would they strike at islands with a view to expelling the Japanese but will work westward towards New Guinea to clean up islands with these amphibious forces by which they would be held. These are his immediate objectives but when and to what extent he will be able to implement them he was unable to say.
He was quite as emphatic as Marshall in respect of the importance of the Pacific and South-West Pacific areas and said that both he and Marshall were actuated by the desire to defend these areas to the utmost and that they were working in closest collaboration and harmony towards this end.
In connection with the statement that the Japanese naval forces were still proceeding northwards away from Australia, the President stated this morning that a considerable force was now concentrated in the vicinity of Truk. Matter is referred to in more detail in my separate report regarding meeting Pacific War Council today.