The following is an appreciation of the probable position in the South West Pacific. It was given to me in order to indicate the strength of the case against any further expansion of the R.A.A.F.
The figures therefore do not include any increase in R.A.A.F.
squadrons above 45. I do not think that it is necessary to have our own Chiefs of Staff prepare for me any considered answer but the document should be very useful especially to Shedden.
ALLIED STRATEGY (1) Our agreed strategy aims at firstly defeating Germany and then turning our whole efforts against Japan. Until Germany is defeated we are exerting unremitting pressure on Japan with all the forces we can spare. The objects of this offensive are to wear down Japanese sea and air power and cause shipping losses, while preventing the Japanese from consolidating their positions sufficiently to enable them to stage an offensive themselves. At the same time we aim at the attainment of positions from which to menace Japanese sea communications.
PRESENT OPERATIONS (2) The operations in the Solomons and New Guinea which will culminate in seizure of Rabaul have forced the Japanese on the defensive. Attacks by aircraft and submarines continue to keep enemy shipping losses above their rate of building. Our present operations are achieving the objects of our strategy and, as our forces will steadily increase, they should continue to do so.
JAPANESE STRATEGY (3) Limitations imposed by shipping. The margin of Japanese shipping available for operations, after allowing for trade and overseas maintenance commitments, has fallen to 600,000 and continues to fall. Additional tonnage might be found from trade for new operations without immediately serious effects on Japan's economic position. Since, however, her shipbuilding cannot keep up with the present rate of sinkings and since she must be aware of growing Allied ability to increase that rate, she cannot afford to incur serious losses inherent in any large scale seaborne assault nor can she risk additional commitments entailed in further extending her sea communications.
(4) Japanese Intentions The reversals at Guadalcanal and in New Guinea have brought home to the Japanese the risks involved in seaborne expeditions in the face of land based aircraft. Japan is now faced with increasing Allied naval, land and air forces in all areas from India to the Aleutian Islands and the absolute limitations of her shipping position are never likely to increase. In these circumstances her strategy must be fundamentally defensive and be aimed at making her existing conquests as impregnable as possible.
FORCES REQUIRED TO IMPLEMENT OUR STRATEGY  Naval. Our strength in the South West Pacific is only just equal to that of the Japanese but it is improbable that the latter will increase materially their strength in this area. Not only [is] America's threat in the Aleutian Islands growing in strength but above all the stronger the American fleet becomes the greater will be the Japanese anxiety for the defence of their home waters.
Allied fleets engaged against Japanese will increase, firstly due to the United States new construction and secondly by the possible release of British ships when Italy has been finally eliminated.
(6) Land Forces Discounting Sumatra  Islands there is a maximum of 200,000 troops in deployment over a lateral distance of 3,000 miles in the South and South-West Pacific Areas. It is probable that only 9 out of the 13 divisions forming Japan's strategic reserve could be made available for these areas.
Even discounting shipping losses which might be heavy, previous experience indicates that it would take 9 months to concentrate in the South West Pacific these 9 divisions.
Against this there are the equivalent of 11 Allied divisions in Australia and 3 and 2/3rds divisions in New Guinea. There are some 11 equivalent divisions in the South Pacific Area. Five Australian divisions are being trained in jungle warfare and 2 further American divisions are being sent to reinforce the South West Pacific during the next 5 months. There is thus a marked superiority in Allied strengths and there should be sufficient land forces for the capture of Rabaul and a subsequent advance on Truk, apart from the security of our own bases.
(7) Air Forces Although the Japanese have numerous and well distributed airfields they cannot make available in the South-West Pacific Area (excluding the Philippines) more than 700 land based and 150 to 200 carrier borne aircraft. Owing to their preponderant defensive commitments from Java to Gilbert Islands, the Japanese could not spare more than 200 of these land based aircraft to attempt any offensive operation.
Japanese air forces in the South West Pacific are only maintained at their present level with difficulty and owing to the high rate of wastage being incurred by Japanese in excess of balancing or exceeding their production there is little likelihood of their increasing. Even excluding air forces in the South Pacific the Allied strength guarding Australia and in the South West Pacific (not including transport aircraft) is already considerably in excess of the total Japanese strength there and by the end of the year will be nearly three times as great.
(1) The Japanese dispositions in the South and South West Pacific are essentially defensive.
(2) So long as our present pressure on the enemy in New Guinea- Solomons area continues, there will be no threat to Australia from this flank.
(3) In order to mount an attack from the north or north-west the enemy could not concentrate a portion of his strategic reserve estimated at 9 divisions available for this area at a greater rate than 1 division per month. Even if he took this step the enemy could not risk shipping losses nor accept added maintenance commitments inherent in launching any further large scale offensive operations.
(4) Allied land forces are sufficient not only for the defence of Australia but to continue with the plans of limited offensive operations.
(5) To-day Allied air forces in the South West Pacific are considerably more than those of the Japanese and by the end of the year they should approximate 3 times as great.
(6) Though Allied naval strength in the Australian area has not been preponderant over the Japanese it is sufficient, in conjunction with shore based aircraft, not only for the defence of Australia but for its part in our present offensive operations. It will be increased considerably by the new American construction throughout the year.
SHORE BASED AIR FORCES IN THE SOUTH-WEST PACIFIC AREA (NOT INCLUDING THE PHILIPPINES)
JAPAN-NOW AND IN DECEMBER 1943
Area Fighters Bombers (a) Other Total Transport Operational operational aircraft Types aircraft Java, Borneo, Celebes and Timor 111 109 39 259 - New Guinea, Bismarcks and Solomons 201 178 62 441 - Totals- 312 287 101 700 -
R.A.A.F. 235 139 (b)86 (c)460 - United States 286 283 82 651 135 Totals - 521 422 168 1,111 135
UNITED NATIONS-DECEMBER 1943
R.A.A.F. (d)312 318 198 828 45 United States 474 486 251 1,211 234 Totals- 786 804 449 2,039 279
(The following are notes) (a) Includes P.R.U.-G.R.-A.C. -special [sic] and flying boats.
(b) Includes Torpedo bombers.
(c) Does not include G.P.  Wirraways still employed in operational squadrons.
(d) These figures have been checked with the R.A.A.F. Mission in Washington. They represent a reasonable estimate based on current allocations.