Proposed American exchange Far East. Your 6724 of 10th July.  First. The United Kingdom Government duly advised America that all Empire governments welcomed any proposal to rescue prisoners and internees in Japanese hands. They considered, however, that proposal should be expanded into a single Allied proposal whereby Japanese garrisons in the central and south west Pacific areas might be exchanged for British, American and Dutch prisoners on an agreed basis. 
Second. America has now informed the Foreign Office that United Kingdom suggestion was referred back to joint Chiefs of Staff who advised that from military point of view expansion of proposal to include Japanese garrisons south west Pacific not acceptable for the present, and considered proposal should be limited in scope to Japanese garrisons in central Pacific mentioned in original proposal for following reasons:
(a) Number of Japanese troops which would be affected by such expansion is approximately 138,000 including some of best Japanese field forces.
(b) Provision of shipping to handle such numbers might probably seriously affect the support of prospective Allied operations.
(c) Assembly and actual embarkation of so many troops would be difficult.
(d) Japanese Government would not care to 'lose face' by admitting hopeless position of these troops, especially as their presence requires large Allied forces to contain them.
(e) Such an extensive expansion of original scheme would probably destroy chances of acceptance of any scheme of this nature.
Third. With a view to meeting the wishes of the Empire governments, the Chiefs of Staff suggested that original proposal be amended by excluding civilians and by including British and Dutch prisoners of war without providing for any specific ratio according to nationality, priority being accorded to sick and wounded. 
Fourth. After consideration by War Cabinet, United Kingdom Government advised America they were grateful for having amended original plan on lines proposed and that they were consulting the governments of the Dominions and India and would furnish a reply as soon as their answers had been received. Your early views would be appreciated.