Your 1118.  Lend Lease Stage II.
1. You may agree to proposal for a separate Australian section of the Agreement and inclusion of a paragraph to the following effect-'The Australian Government, in accordance with the terms of the Reciprocal Aid Agreement concluded with the Government of the United States of America on the 3rd September, 1942 , will continue to supply to the United States Forces, as Reciprocal Aid, such goods and services as it now furnishes and which are locally available.' 2. This is a simple and clear undertaking to continue R.L.L. which can be readily understood. It covers substance of second sentence of your suggested paragraph which Treasurer feels is unnecessary to repeat in detail and may be misunderstood here.
3. If United States authorities are not satisfied with wording of proposed paragraph and desire amendment of existing agreement as to area, you should advise that Australia has implemented agreement in a very liberal manner to limit of her capacity and granted aid to areas outside South-west Pacific Area and will similarly examine any further requests having regard to availability. We feel this should adequately meet United States and you should press this strongly.
4. If, in spite of paragraph 3, they still press for specific commitment to an extended area in the proposed agreement you should reply that this is a matter upon which direct representations should be made on Government to Government basis.
You can add that such a request would receive immediate consideration of Commonwealth Government which will be meeting next week.