1. Despite strenuous efforts made by Dr. Evatt as Chairman to reconcile points of difference, Drafting Committee appointed at Monday's meeting of Council  failed to reach agreed text.
Poland, after first appearing ready to co-operate, later insisted that text contain all provisions [of] original Polish resolution without any addition to safeguard rights of Assembly. Other members maintained it was essential to refer to Assembly's rights in text and objected to fixing the date in September for reconsideration by Council as Assembly would be unable to make recommendations if Council were still handling question.
2. At Council meeting yesterday Dr. Evatt moved following resolution on behalf of majority of Committee as amendment to the Polish resolution.
Begins: Whereas the Security Council on 29th April, 1946 appointed a Sub-Committee to investigate the situation in Spain and whereas the investigation of the Sub-Committee has fully confirmed the facts which lead to the condemnation of the Franco Regime by the Potsdam and San Francisco Conferences, the General Assembly at the first part of its first session and by the Security Council by resolution of the date above-mentioned and whereas the Sub- Committee was of the opinion that the situation in Spain is one the continuance of which is likely to endanger the maintenance of international peace and security, it is hereby resolved that without prejudice to the rights of the General Assembly under the Charter the Security Council keeps the situation in Spain under continuous observation and maintains it upon the list of matters of which it is seized in order that it will be at all times ready to take such measures as may become necessary to maintain international peace and security. Any member of the Security Council may bring the matter up for consideration by the Council at any time. Ends.
3. Before meeting opened Australia had obtained support for this resolution from all members except Soviet and Poland which objected terms of reference were too weak. After statements by Soviet and Poland, and Australia in reply had traversed arguments adduced in Committee's meetings, resolution was accepted by nine votes against Poland and Soviet.
4. When President announced resolution had been carried, Soviet claimed that matter was substantial and veto applied. It appeared later in discussion that Soviet considered paragraph 2 of preamble of resolution and words 'without prejudice to rights of Assembly' to involve matters of substance.
5. Chairman ruled question was procedural. Soviet asked for vote to determine whether question was substantial or procedural.
General discussion on veto ensued. Netherlands agreed resolution was clearly procedural as its intention was merely to maintain a matter on agenda. If vote was taken whether resolution was substantive or prodedural, in accordance with Four Power Declaration  veto could be claimed for this vote. Extraordinary position would then be reached that one member of Council could render ineffective opinion of rest of the Council that matter was procedural. This position only showed veto provision in Charter should at some time be revised.
6. Australia agreed subject was clearly procedural but denied Four Power Declaration had ever been accepted or could bind United Nations.
7. After considerable discussion President's ruling was put to vote. The Soviet and France voted against. (France's vote was later explained privately to be based upon misapprehension.) The President stated in view of opposition of permanent member, the Council had not accepted his ruling.
8. Australia strongly attacked this decision contending that it was based upon Four Power Declaration which had never been accepted as authoritative, and sharply criticized the Soviet's attitude. The Council must reach a decision and possibly agreement might be reached by voting simply on last paragraph of Australian and United Kingdom resolution.
9. The Soviet agreed the decision might be reached by this vote, if reference to rights of Assembly was deleted and date for reconsideration by the Council added. The United Kingdom rejected these amendments. Australia refused to accept them saying that by the use of veto the Soviet was endeavouring to place the Council in a position of rejecting all propositions until only the Soviet proposition remained. These tactics affected the whole dignity and self-respect of the Council.
10. After further manoeuvring the Soviet proposed a draft which after reciting the first and third paragraphs of the preamble of the original resolution continued-
Begins. The Security Council decides to keep the situation in Spain under continuous observation and maintains it upon the list of matters which it is seized in order that it will be at all times ready to take such measures as may become necessary to maintain international peace and security. The Security Council will take up the matter again not later than September 1st, 1946, in order to determine that appropriate practical measures provided by the Charter should be taken. Any members of the Security Council may bring the matter up for consideration at any time before the date mentioned. Ends.
11. Australia worked vigorously for the insertion of reference to rights of Assembly and eventually accepted the President's assurance that after votes had been taken on the Soviet Draft Australian amendment to add reference to rights of Assembly would be considered. This method was adopted because of the risk that, if reference were inserted in text the Soviet might then veto whole resolution leaving nothing.
12. The Soviet resolution was then adopted unanimously subject to deletion of sentence referring to September 1st. Finally Australia proposed additional paragraph that resolution did not prejudice the rights of the Assembly. All members except the Soviet and Poland voted for addition. The President ruled that as this was claimed by the Soviet to be a substantial question and as the Soviet had voted against the resolution was lost. The Council then adjourned to a date to be fixed.
13. The meeting involved much complicated procedural debate of Council's existence. Throughout the greater part of the meeting the fate of the Spanish question was subsidiary issue, it being overshadowed by discussion on veto with which majority of representatives appeared either unwilling or unable to cope. Only Australia and Soviet played any notable part in the debate. The meeting, despite possible adverse affect on the dignity of the Council, usefully threw into relief the whole question of veto.
The meeting has shown that the Soviet is prepared to stand strictly on terms of Four Power Declaration and assert prerogative of choosing which proposition it wishes to veto. Other permanent members reluctantly admit the binding force of declaration on them but appear to wish to escape from it.
14. The Australian approach throughout was based on the Charter and upholding authority of Assembly. Australia was responsible for establishing Council's first investigating body and presiding over impartial inquiry into facts. Investigation revealed positive course of action within charter was open. This course of action was supported by overwhelming majority of Council but was defeated by Soviet in defiance of wishes of majority. Australia then took leading part in opposing direct breach of diplomatic relations which was not justified by facts as established. As investigation proved the situation was one falling within Chapter VI  of Charter Australia lastly fought for retention upon agenda without prejudice to rights of Assembly. This stand was again supported by overwhelming majority of council but provision of rights of Assembly was defeated by Soviet exercise of veto. However matter is maintained upon Agenda.
15. Yesterday's meeting was climax to Dr. Evatt's activities on Spanish question. When veto issue emerged, he was virtually only Representative prepared to contest strong Soviet insistence upon Four Power Declaration and attitude of other smaller nations such as Brazil, Egypt and Mexico was disappointing.