THE AUSTRALIAN WAR EFFORT AND BRITISH COMMONWEALTH FORCES FOR THE FAR EAST
1. I have now received a copy of Paper COS(44)408(0) of 10th May , which arose from the suggestion made by me to the meeting of Prime Ministers on 3rd May  that General Blamey and the Australian Naval and Air representatives in London should discuss with the United Kingdom Chiefs of Staff the technical aspects of the basing of United Kingdom Forces on Australia, with a view to reaching agreement on the procedure to be followed in the examination of this matter.
2. It is noted:-
(a) That the document is a statement of the British Commonwealth Forces likely to be available and the estimated dates on which they might be operational in the Far East.
(b) That the statement does not imply any commitment or the adoption of any specific policy or plan of operations in the Pacific.
(c) That it is assumed that Australia can mount for operations the forces envisaged and that they can be maintained. It is added that until further information is available on Australia's potentialities as a base this cannot be confirmed.
As I said at the Conference, Australia warmly welcomes the idea of basing British Forces on Australia and will extend the fullest collaboration and co-operation. I desire, however, to offer certain remarks on the above points and to raise with you the question of the procedure to be followed in order to resolve this question, which is of vital importance to British prestige in the Pacific and to the form and nature of the Australian war effort.
3. I mentioned at the Conference, that Australia, in addition to maintaining forces of considerable strength in the Southwest Pacific Area, as well as continuing its part in the Empire Air Scheme and manning certain ships for the Royal Navy, has accepted responsibilities for the provision of works, supplies and services for the American Forces as well as its own. It has also to maintain the civil economy on certain austerity standards, and to meet commitments for the supply of foodstuffs to the United Kingdom which the representative of the Ministry of Food  is constantly pressing us to increase.
4. In my cablegram No. 267 of 8th October , I said that it was evident that we did not have the manpower and material resources to meet all the demands being made upon us. The Government had accordingly decided to reduce slightly the strength of the Army and the number of men and women engaged in munitions and aircraft production to meet the following needs:-
(a) A shortage of manpower to provide for the level of activity in a number of basic industries on which the Australian direct military effort ultimately depends (transport, power, timber, minerals, food, clothing, etc.), in order to ensure a proper balance between the direct military programme and its industrial basis.
(b) A shortage of manpower for the production of food for Britain, and of food and general supplies for rapidly growing Allied Forces in Pacific Areas.
As the manpower reserves have long since been exhausted the maintenance of the naval, land and air forces is governed by the available intake of manpower and womanpower. This has been fixed at 3,000 men and 2,000 women per month, but I regret to say this total is not being attained.
5. The Australian Government also decided that the Commander-in- Chief of the Southwest Pacific Area should be informed of the definite limits to which commitments can be accepted for United States requirements of supplies and services and the alternative choices which such limits impose. The dimensions of United States demands may be illustrated by the fact that in October last they involved the employment of 75,000 Australian personnel, and this figure is expected to rise to 100,000 by June 1944. Also the cost of Reciprocal Lend-Lease for this financial year will reach close on 100,000,000.
6. (a) It is therefore clear, in regard to the statement of the Chiefs of Staff referred to in 2(c) above, that Australia can only maintain additional forces by adjusting her war effort in some other direction. I am sure the Government will be quite prepared to do this provided the Australian military effort is not permitted to fall below a certain point.
(b) Furthermore it is presumed that if strategical considerations indicate that additional forces should be sent to Australia, the resources of the United Nations will be capable of making good deficiencies which cannot be supplied by the Commonwealth.
(c) In regard to Australia's capacity to mount for operations the forces envisaged, the Government's naval, military and air advisers have stated that the fullest information is in their possession in the light of the experience of this war. Much detailed information was supplied to the Lethbridge Mission , and there are additional sources of information readily available through the Australian Service representatives in London and through the United Kingdom Army and Air Force Liaison Staff in Australia.
7. The initial step in the whole matter appears to be the need for a decision by the Combined Chiefs of Staff in the realm of higher strategy as to whether these additional forces are, ultimately, to be sent to the Pacific. It is realised that any date must be provisional and dependent on a variety of contingencies. The planning of the measures necessary by the Australian Government to meet demands for supply and maintenance must be taken in hand early. For example, the targets of food production will have to be raised and all the factors of production provided for. These may range from the rural labour force and the material supplies of the man on the land, to the capacity of canning factories, and the manpower and material requirements of the food processing industry. Even if the forces are not ultimately based on Australia other demands could no doubt absorb supplies such as foodstuffs, but if plans are not laid now the supplies will not be available, when they are required. It should not be overlooked that food production has to harmonize with the seasons of the year, which are different in the Southern to the Northern Hemisphere.
8. As we speak with experience on the problem of the supply and maintenance of forces based on Australia, I enclose a copy of a document which outlines the procedure which has been established for the co-ordination of the requirements of the Australian and United States Forces.  Any British Forces would, of course, similarly work through the agency of the Australian Government machinery in respect of supplies and services required from Australian sources.
9. To complete the various questions raised in my cablegram of 8th October, I would refer to the following- (a) Naval Overseas Commitments 'The Government would be glad to have your observations on the question of returning Australian Naval personnel serving overseas, in the light of the general picture of the Australian manpower situation as outlined in this cablegram.' (b) Air Force Overseas Commitments 'The Government urges that the precedent initiated by yourself and Dr. Evatt for transferring R.A.A.F. squadrons from overseas be carried further by the transfer of additional squadrons.' 'In order to avoid disrupting the Empire Air Training Scheme, the Government is agreeable to continue the outflow of personnel, but this will be on a diminishing basis, as the number of R.A.A.F.
overseas is reduced.' The Government has asked me to clear up these matters while I am in London.
10. In the case of the Navy, we have a request from the Australian Naval Staff for the provision of an increased intake to provide for wastage and new commitments such as the manning of new ships which are now being completed. This can only be done at the expense of the Army and Air Force. The question referred to in sub-paragraph 9(a) is still unresolved, and I shall be glad to know the views of the Admiralty.
11. In regard to the Air Force, it is noted from document COS(44)408(0) that 11 Article XV Squadrons of the R.A.A.F. would be transferred to the Pacific.
12. Finally, it is noted from the Chiefs of Staff document that the Australian naval, land and air forces are included in the 'statement of forces available to implement a Pacific strategy'.
They have of course been assigned to the Commander-in-Chief, Southwest Pacific Area, and any variation of this arrangement could only be made on the recommendation of the Combined Chiefs of Staff and with the approval of the Commonwealth Government.
13. I would summarize the various points raised by me as follows:-
(a) It is highly desirable to obtain a decision by the Combined Chiefs of Staff as to whether additional forces are ultimately to be sent to the Pacific, in order that the Australian Government may proceed with the measures necessary for supply and maintenance. If such a decision is not possible, the Combined Chiefs of Staff should express a general view on the desirability of Australia proceeding with these measures, in view of the fact that the resources can be absorbed in other directions in the war effort of the United Nations. A precise assessment of what Australia is capable of doing can then be worked out and communicated to the United Kingdom Government. The decision as to the nature and extent of its war effort is of course a matter for the Australian Government. (Paragraph 7.) (b) The Admiralty to furnish its views on the outstanding matter referred to in sub-paragraph 9(a).
(c) The Air Ministry to furnish its views on the outstanding matter referred to in sub-paragraph 9(b).
It is suggested that the foregoing matters be discussed at a meeting of you and myself and our advisers, together with the Service Ministers and the Minister of Production.  Alternatively, if you agree with 13(a), you could instruct Field Marshal Dill  on the matter accordingly and I shall discuss it with the Combined Chiefs of Staff in Washington. I can then deal with 13(b) and (c) directly with the First Lord of the Admiralty  and the Secretary of State for Air  respectively.