For the Prime Minister from the Prime Minister.
1. Your No. 66  has been considered by the Australian Chiefs of Staff and I have discussed it personally with General MacArthur.
2. The following are the observations of the Chiefs of Staff.- (a) A substantial amount of information regarding facilities in Australia has already been provided by them to the Admiralty, War Office and Air Ministry. For example, Admiralty and Commander-in- Chief, Eastern Fleet , have been supplied by Australian Naval Board with two very complete secret publications, viz., A.C.B.
0231 -development of Fleet Bases in Australia dated June, 1943, and A.C.B. 0245 -Review of local Naval Defences in Australia, December 1943. Similarly, much information regarding facilities for training and maintenance of Military Forces and Base facilities for Air Forces has been supplied to the War Office and Air Ministry respectively by Australian Army and Air Force Departments. 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.
(b) It is suggested that the information available and channels for additional information now open should provide United Kingdom staffs with much of their preliminary requirements for initial planning.
(c) The experience of the Australian staffs in providing Base organisations and maintenance for large forces on the mainland and in New Guinea would enable them, in collaboration with the United Kingdom liaison staff here, to prepare tentative plans for the reception and maintenance of such British Forces as it may be proposed to base here.
(d) United Kingdom representatives would be welcome, but in view of the above, it may be preferable to defer sending them until plans have progressed further when best results would probably be obtained by sending representatives of the staffs and advance parties of the Forces concerned.
3. In view of his responsibility for operations in the Southwest Pacific Area, General MacArthur will gladly furnish any opinions that may be desired on the operational aspect of the base potentialities of Australia and the operation of Forces therefrom.
The creation and development of administrative facilities for the Southwest Pacific Area is the responsibility of the Commander-in- Chief under his directive , and appropriate procedure has been evolved whereby the Commander-in-Chief works through the Australian Governmental machinery and agencies, except where work is done by Military personnel, mostly in operational areas.
4. it is noted that the proposed examination will be made on the strictest understanding that the United Kingdom Government is engaging upon no commitments and reaching no firm decisions. There are two further aspects which should be kept in mind:-
(a) My cablegram 267 of 8th October  outlined the conclusions of the Australian Government following a review of the nature, extent and balance of the Australian War Effort.
In paragraph 14, I referred to the vital importance of the extent of the Military effort that should be maintained in the Pacific by Australia alone, or in association with other parts of the Empire.
I added that:-
'If the defeat of Japan is to await the end of the war in Europe, the struggle in the Pacific will be more prolonged, and it is imperative that a certain minimum effort should be maintained by or on behalf of the British Empire in the Pacific.'
Part 6 of the cablegram referred to the question of supplies and services for the United States Forces, and the limits to which commitments could be accepted for their requirements.
My cablegram 5 of 4th January  referred to the relation of food exports to the United Kingdom to American demands.
The capacity to base British Forces on Australia and to provide for their requirements is accordingly a matter for consideration by the Commonwealth Government at the highest level of policy in its relation to the Australian War Effort.
(b) You are aware of the set-up in the Southwest Pacific Area which was approved by the Governments concerned, and under which the Governments have assigned their Combat Forces to operate under the Commander-in-Chief who has appointed Commanders of the Allied Naval, Land and Air Forces. To conform to the set-up, British Forces could, therefore, operate in the Southwest Pacific Area only by being assigned to the Commander-in-Chief in accordance with the terms of his directive. A separate system of command could not be established. Furthermore, the base facilities on the mainland are under the control of the Commander, Allied Land Forces, who is also Commander-in-Chief of the Australian Military Forces, the Australian Chief of the Naval Staff and the Australian Chief of the Air Staff. As suggested in 2 (c), information should be furnished by these sources and the administrative experts sent to Australia should be attached to the staffs of the respective Australian Services.