ONE. The following is the text of the detailed reply to our proposals of 20th October  for British Commonwealth occupation force.
I have the honour to refer to your note of 20th October, 1945 containing a proposal regarding the use of British Commonwealth occupation forces in Japan and to my note of 23rd November, 1945  stating that the Government of the United States accepts in principle such participation.
The United States Government now wishes to propose certain general principles, on which, if agreeable to the Australian Government, such participation may be based from a military standpoint. It is considered that the statement of these principles which follows should form an adequate basis on which the Supreme Commander for the Allied Powers can initiate detailed discussions with representatives of the Australian Government in Tokyo. If during these conversations questions should arise which would indicate the need for further discussion on the political level the points in question might be referred to Washington for consideration.
Statement of general principles regarding participation of British Commonwealth forces in occupation of Japan.
1. The ground elements will consist of a composite British Commonwealth Land force of approximately four brigades with necessary supporting units and services the exact composition of the force to be determined on the basis of deployment and employment ascertained as a result of discussions in Tokyo. This force will be integrated into the occupation forces under the Supreme Commander for the Allied Powers.
2. The participation of Air forces is accepted in principle. The strength of the air component will be determined after conversations in Tokyo on the basis of the requirements of the Supreme Commander for the Allied Powers.
3. The Supreme Commander for the Allied Powers will be free to locate and move the British Commonwealth forces within the Japanese Home Islands as he sees fit to accomplish the missions assigned him with due regard to the problem of supply and maintenance in so far as the operational situation permits.
4. No area will be assigned the British Commonwealth forces as an exclusive area of control. All areas occupied by these forces will additionally be subordinate to the appropriate higher corps Army or other Commander.
5. These forces will be withdrawn entirely or in part upon agreement between the United States and the Commonwealth of Australia or at the expiration of six months after formal notification by either party in the event of no agreement.
6. The manner of integration of ground Air and Naval forces of the British Commonwealth in the occupation of Japan will be as agreed between the Supreme Commander for the Allied Powers and the Commander of the British Commonwealth forces.
7. British Commonwealth force Commanders will be free to communicate with their Governments. Other channels of communication will be as follows:-
(a) for policy from the Australian Government as representative of the British Commonwealth of Nations through the United States Government and United States Chiefs of Staff to the Supreme Commander for the Allied Powers and thence through the occupation force command organization. Appropriate representation will be accorded on the staff of the Supreme Commander for the Allied Powers and Intermediate echelons.
(b) for administration within the British forces such as supply from the force Commanders to under general co-ordination of the Supreme Commander for the Allied Powers any agency designated by the Commonwealth Governments.
(c) details of supply administration and communications such as provision of port facilities and airfields are matters for local arrangement between the Supreme Commander for the Allied Powers and the British Commonwealth force representatives.
8. The Commonwealth Governments concerned will be responsible for supply and maintenance of their forces.
9. Details as to timing of movements of the parts of the Commonwealth force to Japan and their disembarkation will be arranged directly with the Supreme Commander for the Allied Powers by the British Commonwealth representatives. The force or portions thereof will pass to command of the Supreme Commander for the Allied Powers on arrival at the port of debarkation. It is understood informally that the Australian Government wishes to begin movement of the Brigade now at Morotai and a Royal Australian Air Force component about 15th December 1945.
I would appreciate an indication of the acceptance by your Government of the foregoing statement of principles in order that the Supreme Commander for the Allied Powers may be authorized to initiate conversations with the British Commonwealth representatives Tokyo.
TWO. We understand that the terms of the United States reply were governed by two basic considerations viz:-
(a) desire to avoid creating an awkward precedent vis-a-vis other Allied Powers.
(b) desire to leave as much detail as possible to be settled direct between the Supreme Allied Commander and the Commander in Chief British Commonwealth Occupation force.
THREE. With regard to the specific paragraphs of the United States statement of general principles contained in the reply we have the following comments and observations to make.
(I) The term 'exact composition' is understood to have referred inter alia to the question of using Japanese nationals in substitution for certain administrative units a practice which the Americans are employing extensively in the case of their own forces.
(II) It is understood from the United States War Department that the proposed air component of British Commonwealth Occupation forces is relatively twice that of the United States Occupation forces and that this may in their view establish an undesirable precedent.
(III) It is understood that the words 'with due regard to the problem of supply and maintenance' were included to enable discussions between the Supreme Allied Commander and the Commander in Chief of British Commonwealth Occupation forces on the general question of the location of the whole force in one area and in due proximity to the necessary port, airfield and administrative facilities.
(IV) It is understood that it is MacArthur's desire to place the British Commonwealth Occupation forces land and air components under senior United States Land and Air Commanders respectively.
As indicated in our E12 of 1st November  we consider this would be extremely difficult to resist. We consider however, that we should insist on Organization of the land force as a corps and subordinate to not lower than a United States Army Commander. At the same time the Air component might be similarly organized at as high a level as possible.
(V) It is understood to be the American view that by the end of 1946 the total force of occupation in Japan shall not exceed 135,000. If other powers participate and this figure is adhered to it is obvious that there will have to be a considerable reduction in American strength and possibly certain progressive reductions in the strength of the British Commonwealth Occupation forces and any other occupying Allied force. Consequently whilst our proposals did not include anything of the nature of this paragraph we think the paragraph itself is understandable and one on which it is not worth while making an issue.
FOUR. We have the following general comments to make in regard to certain matters of principle.
(a) Chain of Command. We refer you to our E12 of 1st November. It is understood that the United States authorities agree that the Commander in Chief of British Commonwealth Occupation force should have the usual right of appeal but we feel that you should press for the inclusion of a statement of this right in the main document.
(b) It was understood also that a safeguarding provision would be included in the document whereby British Commonwealth troops would not be divided into smaller formations for command purposes except on the basis of, (1) operational necessity and, (2) furnishing a token force in the Tokyo prefecture. This safeguard has however been omitted and we feel that you should press for its inclusion in the document and for its application to air as well as to ground forces.
(c) We think further that you should press for inclusion of a statement of the principle that in the event of operations the Commonwealth Air Forces should be used where possible in support of the Commonwealth ground forces.
FIVE. We feel that you should know that the above reply was obtained from the State Department only after we and the Legation here had exerted great pressure in order to expedite its delivery.
The document was practically pushed from desk to desk in the State and War Departments. Consequently we suggest that as an alternative it might be more expedient for General Northcott to press General MacArthur with a view to obtaining agreement on points raised in our paragraphs 3 and 4 above. If this mode of approach were employed it would save protracted discussion here by many authorities as is bound to be the case in Washington.