REVIEW OF PRESENT POSITION
In our report of 1st June 1942 , we stated two main propositions:-
(1) Naval policy and shipping resources must dictate the moment for commencing an offensive in the Pacific as until Japanese sea supremacy has been successfully challenged, combined operations on a large scale with the object of regaining lost possessions must be attended with considerable risk.
(2) Offensive operations with limited objectives within the capacity of the forces that are or will be available in Australia should be undertaken as soon as it is practicable to do so.
2. Since that review was made, the following developments have taken place which bear materially upon an Appreciation of the present situation:-
(a) With the collapse of the Philippines, Malaya, Burma and the Netherlands East Indies, the concentration of the Japanese Navy, together with commensurate ground and air forces, has, for the first time, moved towards the South-West and South Pacific Areas.
The centre of gravity of this concentration is in the general Rabaul-Truk area. Whilst the mass of the enemy's troops are concentrated in the north, e.g., China, Manchukuo, etc., many of his shock units are being moved forward to Rabaul.
(b) Apart from the increased enemy concentration mentioned above, the Naval position in the Pacific since the battle of Midway (4th June) has changed for the better, and Allied Naval strength in the Pacific is now approximately equal to the Japanese (see Comparison of Naval Forces in Pacific-Appendix 'A' ). The exact disposition and strength of United States Naval forces in any particular area is not known, but it is assumed that this will be determined, as far as possible, by the anticipated strength of the enemy in that area.
(c) New Caledonia and New Hebrides are strongly held by United States forces.
(d) United States forces have occupied certain islands in the Solomons group. As expected, this has caused the Japanese to send a large force of ships, including men-of-war, transports and supply ships, to this area, at a great distance from Japan, thereby extending very considerably their line of communication and exposing their ships to attack by Allied Naval and Air forces along this line and ultimately in an area chosen by us.
(e) In New Guinea, Port Moresby has been reinforced by land and air forces and Milne Bay has been occupied. The Japanese have occupied areas on the north coast of New Guinea opposite to Port Moresby, whence they have advanced through the Owen Stanley Ranges to within about 40 miles of Port Moresby. There they are meeting with determined and successful opposition.
(f) Transfer of the Sixth and Seventh Divisions of the A.I.F. from the Middle East has been completed. of these, the Seventh Division and part of the Sixth Division, A.I.F., with two Brigade Groups, A.M.F. , are engaged in the operations in New Guinea. Two United States divisions have continued their training in Australia and one of these is also moving to New Guinea. The Ninth Division, A.I.F., has moved from Syria and is now engaged in active operations in the Western Desert.
(g) The whole Army forces in Australia have become a more effective fighting force by reason of increases in equipment and the further period of training.
(h) The strength of the Allied Air Forces in Australia has been substantially increased and our relative air position vis-a-vis the enemy in areas adjacent to Australia is, on the whole, substantially more favourable than in June. This is due to:-
(i) Additional aircraft. There are now in Australia and New Guinea approximately 1,100 operational aircraft, but this total includes about 200 aircraft of obsolescent types similar to those used for training purposes. The Japanese strength in New Guinea, the Solomon Islands, Timor, Ambon and the Celebes Islands is estimated to be about 400 land-based and 100 carrier-borne aircraft.
(ii) Development of more advanced bases.
(iii) Improved means of long range warning and fighter control organisation.
POSSIBLE JAPANESE MOVES 3. The aim of the Japanese in the Southwest Pacific as we see it is to encircle Australia, thus cutting off Australian communications with America and possibly with the Middle East. The Japanese have experienced a check to the fulfilment of this aim by the recapture of certain islands in the Solomons group, and can therefore be expected to make a most determined attempt to regain control of this area.
4. Concurrently with the Japanese attempt to recapture the Solomon Islands, we think it likely that they will continue their operations in New Guinea with a view to capturing Port Moresby.
5. Now that there is an increased Japanese concentration in the South-West Pacific Area, the possibility of a diversionary attack on the Northwest coast of Australia cannot be ignored unless our forces are strong enough to maintain sufficient offensive action to contain these enemy forces in the New Guinea-Solomons area.
6. So long as the Solomon Islands, New Caledonia and Port Moresby are held, we think an invasion of the east coast of Australia is unlikely.
COURSES OF ACTION OPEN TO US 7. The foregoing review of the present position and possible Japanese moves, considered in conjunction with the salient points from the messages exchanged between the Prime Minister, the Prime Minister of Great Britain and the President of the United States, which are set out in the terms of reference , lead us to the conclusion that the strategy enunciated in the two propositions quoted in paragraph 1 of this Appreciation from our report of 1st June still hold good.
8. In reaching this conclusion, we have considered that, as the forces at present assigned to the South-West Pacific Area are not sufficient to enable major offensive operations to be undertaken, there are only two courses of action open to us:-
(1) To endeavour to secure the mainland by defensive measures within Australia. This, as we stated in our Appreciation of February 1942 , would necessitate Australia being strongly defended at every point, which, failing adequate Naval and Air strength, would require large Army forces of a strength which has been estimated at 25 divisions.
(2) To undertake offensive operations with limited objectives with the object of clearing the enemy out of bases now in his occupation, from which he can launch attacks against Australia and interfere with our lines of communication.
9. With a view to determining what limited offensive operations can be undertaken, it is necessary for us to consider what forces are or can be available in Australia.
[A detailed analysis of the manpower resources of the Australian armed services has been omitted. The main points are summarised in Document 62.]
CONCLUSIONS 21. We think that our main objects should be:-
(a) To hold Port Moresby and Milne Bay and to drive the Japanese from the mainland of New Guinea by the capture of enemy bases on the north coast successively.
(b) To drive the Japanese out of the Solomon Islands and secure these as bases for future offensive operations.
(c) To maintain Naval and Air attack on the enemy's lines of communication between Japan and New Guinea and the Solomon Islands.
(d) To attack Japanese Naval forces whenever a favourable opportunity occurs.
(e) To maintain our present tactics in Timor.
22. Such operations would:-
(a) make a most valuable contribution to global strategy by containing the Japanese Fleet;
(b) contribute directly to the defence of Australia by preventing the enemy from securing further bases from which he could interfere with the lines of communication to the United States or attack the Australian mainland;
(c) keep enemy forces engaged in an area where we have good prospects of dealing satisfactorily with them, thus preventing the enemy from using these forces elsewhere, either in Australia or in another area;
(d) secure for the Allies suitable bases for the eventual carrying out of major offensive operations.