I. Reference your E.S. 65.  I had a further discussion with General MacArthur  yesterday as a result of which the draft cablegram referred to in P.M. 76  will not be despatched in its present form because of the changed strategical situation.
2. You may be interested in one aspect which had been put forward at some length by our Australian advisers and is summarised as follows in the covering letter  to General MacArthur:-
'The Government feels that the next best manner in which it can support you in your policy and aims is to strive, through its representatives on the Pacific War Councils in London and Washington, to obtain acceptance in the grand strategy of the view that the southwest Pacific area can make a positive contribution in 1942 towards winning the war, and that this is to be achieved by securing the adoption of a plan for offensive action against limited objectives as soon as the requisite forces and supplies are available. The planning and preparations for such a step would take some months, but if agreement to such an objective can be secured from those responsible for the grand strategy, a commitment on their part would be established. The forces in Australia will then have a positive offensive concept before them which it is hoped with adequate strength will enable you to wrest the initiative from the enemy in this theatre.' 3. General MacArthur advises that he has not taken this aspect up with General Marshall  in the light of the results of the Coral Sea and Midway Island actions which have resulted in such a large reduction in Japan's aircraft carrier strength. He considers it necessary to make a new assessment of the strategical situation in the light of further information still to be obtained and he does not advise any further representations at the moment through Governmental channels. He added that in his view the defensive position of Australia was now assured.
4. I therefore agree to you adhering to the arrangements made for your return. Your presence is also required as Attorney-General in connection with the impending High Court action.  Best wishes for a pleasant journey home.