I refer to your letter of the 10th August, 1945 , regarding the proposal for the basing of a Netherlands Force on Australia.
2. I am pleased to note from your letter that the publicity given to this matter did not originate with you or those responsible to you.
3. Shortly after your letter was written the position in regard to the basing of Netherlands Forces on Australia entirely changed on the cessation of hostilities with Japan, but I feel you should be further informed on certain aspects of your letter as it seems that the circumstances under which the Commonwealth Government reached the decision, conveyed to you by the Minister for External Affairs on 11th July, may not have been fully appreciated.
4. Regarding your reference to a changed attitude of the Commonwealth Government on the general question of the basing of a Netherlands Force on Australia, I cannot agree that there has been any inconsistency in this connection. It is clear, I suggest, that the decision of the Government in September, 1944 , reached on the recommendation of the Advisory War Council, that the proposal to base 30,000 Netherlands troops on Australia commended itself in principle, did not involve a definite commitment as it was expressly provided that our ability to accept such a Force was related to Australia's existing and prospective commitments, the crux of the matter, of course, being whether our capacity could meet this additional strain which could only be determined after full examination of the proposals.
5. In your representations it is also felt that you may have overlooked a fundamental consideration that the only decision of the Combined Chiefs of Staff notified to Australia related to a Netherlands Force of 5,600, and that in this connection the Netherlands Authorities had advised that no force of 5,600 would be despatched as the only project contemplated by them was in respect to a force of 30,000 men. No approval of the Combined Chiefs of Staff to the despatch of a force of the latter strength was received by the Australian Government.
6. You refer to full agreement on execution of the proposal, having been reached in discussions with Australian Army Authorities. In this connection you will appreciate that it was only the Government, acting on the advice of the Advisory War Council, Production Executive and the Defence Committee, which was in a position to determine all the considerations involved. Any advice tendered to you on a lower level could not take into account the overall picture and could, therefore, not have had regard to the full impact of the proposals on the Australian War Effort. Any assumptions which you may have reached on such advice would therefore not be competently based.
7. It is noted you state that the letter of September, 1944, explicitly stated that a further communication would at once be made to you concerning the progress of the discussion. I would quote the relative paragraph:-
'When, as a result of these discussions, fuller information is available to the Government, a further communication will at once be made to Your Excellency.' 8. In regard to the consideration of the proposal following the decision in principle in September, 1944, I feel that I should point out that a representative of the Netherlands Forces was associated with the joint Administrative Planning Sub-Committee in its examination of the commitments involved. The Netherlands authorities were therefore fully aware of the consideration being given to the proposal at its several stages preliminary to decision by War Cabinet and the Advisory War Council.
9. I must also draw your attention to the fact that, subsequent to the Government's decision in principle in September, 1944, and during the period in which the delays to which you refer occurred in the receipt of advices from S.H.A.E.F. and the Combined Chiefs of Staff, the Commonwealth Government, as a result of decisions reached at the Quebec Conference by the late President Roosevelt and Mr. Churchill, undertook to provide facilities for the basing on Australia of a British Pacific Fleet. It was not found possible to meet in full the demands made on Australian resources in this connection, but the extent of the further burden imposed on our economy may be gauged from the fact that it involved, during the first half of 1945, the provision of works and supplies exceeding 25,000,000.
10. Regarding your view that the partial demobilisation contemplated in Australia had added to your conviction that the Netherlands project would meet with no obstacles, I must emphasize that the reductions in the Forces provided for in the Government's decisions had as their primary objective the restoration of a proper balance between the direct military effort and its industrial basis appropriate to the then and immediately prospective stage of the war. The causes of this disequilibrium in the Australian War Effort were:-
(a) The extensive call up of manpower for the Forces and diversion to war industries following the outbreak of war with Japan.
(b) The large commitments assumed in respect of supplies and services for the Allied Forces.
(c) The desire to maintain the volume of food exports to the people of the United Kingdom.
11. It would have been neither logical nor equitable for Australia in its efforts to restore a proper balance in its War Effort to accept additional commitments for Allied Forces, thereby counteracting in a degree the measures designed to achieve the equilibrium to which Australia's war record entitled her. You will of course be aware that the acceptance of the proposal for 30,000 men, involving training, outfitting, feeding and maintenance by an already overtaxed economy, could not, even if the project had eventually been approved by the Combined Chiefs of Staff, be undertaken except at the expense of other accepted commitments.
12. Australia has constantly been mindful of the valuable assistance which it received from the Netherlands East Indies during the early stages of the war with Japan and we recall with gratitude the generous gesture of your Government in making available the Hospital Ship 'Oranje' which has rendered estimable service in our War Effort. Australia on its part has reciprocated wherever possible and its Forces have played a notable part in the recapture of Dutch Territory occupied by the Japanese.
13. I trust it has been made clear to you that the decision reached by the Government on the recommendation of the Advisory War Council was unavoidable in all the circumstances. I am of course equally concerned with you that this decision should not lead to any impairment of the excellent relations that have always existed between our respective Governments and which it is my earnest desire, should continue in the future.
J. B. CHIFLEY