Reference telegrams A.8  and ACJ.5 and 6.  Allied Council for Japan.
After considering these matters as a whole I have formed the following views- 1. Procedure for instructions to Ball. The agreed arrangement set out in telegram 118  to Dominions Office made it clear that Ball receives his instructions from me and that it is my responsibility to keep the other 3 Governments informed. In some cases it may be both practicable and desirable for me to ascertain their views before giving any instructions to Ball. In others it may be unnecessary or even impossible to do so. You will understand that the reference of questions to other Governments before I have had an opportunity of deciding what course of action is desirable is bound to lead to confusion. I may have an opportunity shortly of explaining this procedure to the other Governments with a view to ensuring a satisfactory understanding.
2. All information I have received since your 171  to the Dominions Office shows that the fundamental matter now requiring attention is that raised in paragraph (b) of your A.8 and Ball's telegrams ACJ5 and 6, namely the attitude of the Supreme Commander Allied Powers and its representatives towards the council and its functions. This is not a question which Ball should attempt to handle within the Council, nor do I think that the stage has yet been reached to justify Ball's suggestion of relinquishing our position in the Council. Allowance must be made for the fact that Marquat and Whitney are the direct representatives of MacArthur and we should certainly await the arrival of A[t]cheson  before passing any judgment on the utility of the Council. I confidently expect that his presence in the Council will introduce a marked improvement of conditions. I am not disturbed that Ball should have found it desirable on occasions to give support to the Soviet representative. This strikes me as being no more than normal if the Council is to function as we intend it to, i.e. as a real advisory body. Basically the question raised by the attitude so far adopted by MacArthur can only be settled at the governmental level and I will discuss this with Byrnes in the very near future.
Meanwhile Ball should use caution in raising the matter with A[t]cheson.
3. On the 3 points referred to you by Ball (your telegram 171 to the Dominions Office) I have seen and taken into account the views of other governments. Ball should be instructed as follows- (a) At the outset and until the position is clearer he should in each case when proposing to take any initiative consult with his committee of advisers and in the light of their views form a proposal and submit it for instructions.
(b) He should do everything possible to promote harmonious relations within the Council but this does not impose on him any special duty of mediation between the Americans and Russians. He should endeavour to carry out the policy as already approved and refer doubtful cases to me for instructions. It is most important that, pending Acheson's forthcoming visit to Japan , he should not cause unnecessary antagonism with General MacArthur to whom Australia owes so much for his great services.
(c) His views concerning deputy secretaries-general appear reasonable.
4. Regarding the points raised in your 177  to the Dominions Office it is quite clear from the terms of the Moscow agreement that except in the contingency contemplated in paragraph 6 the functions of the Council are purely advisory and consultative.
Further, having regard to paragraph 5 of the agreement, Supreme Commander Allied Powers' contention that the Council's functions are limited to further directives is arguable, though I do not agree with it. At the same time it is reasonable to assume that in framing its views on the directives referred to it the Council will have available all necessary information deriving from directives and orders from the Supreme Commander Allied Powers previously issued. This would appear to be a matter of reasonable accommodation. The issue is not so much the legal interpretation of the terms of the Moscow agreement as the real status of the Council in the light of the apparent inclination of the Supreme Commander Allied Powers to depreciate its functions.
5. I doubt whether the matters mentioned in paragraph (c) of A.8 are in the long run of great importance for the successful working of the Council, but approve generally the line that Ball has taken.