Our 255.  The United Kingdom representatives have now had exploratory discussions at a low level with a view to ascertaining American objectives for Pacific bases.
The United States representatives were Hickerson (State Department) Captain Dennison (Navy), Colonel Tait (Army) and Series, special assistant to the Secretary of State. The United Kingdom representatives were Michael Wright, Commander Jones, Commodore Clark, Colonel Wilson, Major Munro, Maude and Rogers of the Colonial Office, Commodore Finlay, Commander Frewin and Cockram.
The Americans expressed a desire for complete secrecy on the ground that any leakages might arouse national feelings which might militate against agreement. United Kingdom delegates, however, stressed the possibility of a piecemeal approach, and made it clear that they would keep the Dominions continuously informed.
The Americans stated that they did not wish to discuss questions of sovereignty and proceeded to outline their proposals for the use of bases. They distinguished two classes of islands.
(1) Those in which exclusive use was desired (Canton, Christmas and Funafuti).
(2) Those in which they would be satisfied with joint use, Tulagi, Viti Levu, Espiritu Santo, Tarawa.
The United Kingdom can see no practical difference between the granting of exclusive use in cases mentioned and the transfer of sovereignty and are regarding proposals as such.
Proposals for joint are similar to those made to New Zealand in the case of Western Samoa (our telegram 273 ) and in respect of Manus our telegram 314  with the exception that in the case of Espiritu Santo, France would also be included.
Hickerson gave definite assurances that the provision in section 2 of annex A (refer our 273) 'that facilities shall not be made available to the armed forces of another Government without the consent of (e.g. New Zealand) and the United States' would permit the use of bases by other British Commonwealth countries if the United States was not at war. The British are endeavouring to obtain further confirmation on this point.
It appears that the Americans are particularly anxious to secure early agreement on Pacific bases for two reasons.
(1) The State Department realizes that they will lose a bargaining point when the United Kingdom Loan is approved. They are suggesting that it will assist the passage of the loan agreement, especially in the House of Representatives, if it can be shown that the United Kingdom is prepared to make a bargain on bases.
(2) The Navy Department are anxious for agreement because of the provision requiring, e.g. the New Zealand Government to maintain existing military installations at its own expense. This would assist the Navy in securing its appropriation.
The United Kingdom representatives here state they see many advantages in the joint use of bases which they consider would give the United States Navy a stake in the South-west Pacific. On the other hand, they are concerned at the request for exclusive use of Canton, Christmas and Funafuti and see many difficulties in reconciling the American proposal with the trusteeship arrangements and commitments to U.N.O. They state that, for these reasons, they have simply listened to the United States proposals and have attempted to clarify them, without themselves expressing any views. I understand, however, that [at] a meeting to-day (Tuesday) the United Kingdom representatives intend to test the United States reaction to suggestion that joint use of bases might be achieved by an informal understanding supplemented by the formal agreement giving the United States the right to use the bases for civil aviation purposes. It should be clearly understood that this is a low level feeler only and not an official United Kingdom proposal.