I have to thank you for your letter of 12th August regarding the Joint Intelligence Organisation.
I have found your observations most helpful, but they do not remove some of my difficulties, but, in fact, confirm some of my doubts.
Before commenting on the points you have made, I should like to put forward an alternative. It is true that, at the Prime Ministers' Conference at London, it was agreed we should move forward along the lines you are suggesting. Since that time, however, there have been remarkable, and even dramatic, changes in international affairs, and, in particular, in British Commonwealth relations. The inclusion of two new dominions in India and of Ceylon and Burma in the British Commonwealth Organisation is sufficient reason for reconsidering British Commonwealth defence arrangements. The British Commonwealth Organisation is a flexible instrument, and these new developments require an adjustment of previous plans.
Under the new set of circumstances, it would appear preferable that Australia, and perhaps Australia and New Zealand, should have an independent intelligence organisation covering our area, and that other members of the British Commonwealth should have similar independent intelligence organisations, each being loosely linked, so that any information which each thought should be communicated to others could be so communicated. A Joint Intelligence Organisation of the type previously suggested can in the long run only lead to embarrassments. Our whole experience of British Commonwealth relations is that the looser and more flexible they are the greater the degree of co-operation that is achieved.
I feel sure that both the Prime Minister and the Minister for External Affairs would want at least to consider such an alternative before carrying through a decision which was made in a totally different international and British Commonwealth situation.
My own personal view is that this Department could offer the most complete co-operation, using all its resources, both here and overseas, in a separate Australian or Australian - New Zealand intelligence organisation, but that it would find the greatest difficulty in fully co-operating in a joint scheme as at present proposed.
The following comments on the observations in your previous letter are irrelevant if the alternative I have suggested is to be considered. However, they are made in order that the present plan can be given full consideration.
Scope of Joint Intelligence Bureau:
You confirm that the Bureau and the Signal intelligence Centre are to be kept informed of current political developments in various countries. I see great dangers in this. To begin with, it will be difficult to ensure that these organisations are in possession of the same facts that we have, or that we are in possession of the facts that they have, and it is not unlikely that two different judgments will be made of current political developments. If the Bureau and the Centre are to be informed on these matters, it would seem to me that their only source of information should be through this Department, either from our own agencies or others communicating through us.
Moreover, it would be a matter of continual embarrassment to us if other members of the British Commonwealth were being informed of our own judgment of current political developments in countries in this area. I could demonstrate this in detail by reference to recent negotiations on Indonesia.
There is some misunderstanding regarding the officer to be attached from this Department. No officer can represent this Department generally, unless he is a senior officer of the Department working in the Department. If it was previously agreed that a member of this Department might be included on the staff of the Bureau, or attached to the staff of the Bureau, this could be only for the purpose of helping to build up the staff, and it should be clearly understood that any such officer would not represent this Department in any way.
Instructions and Regulations:
Regarding instructions and regulations, I previously made the point that it would be difficult for me to advise the Minister regarding instructions and regulations which had not been communicated to me or to him. If a prior condition of participation by Australia in the British Commonwealth Signal Intelligence Organisation is the acceptance of principles outlined in a document which has not even been seen, I do not think we should agree to participation. If this attitude is taken in the matter of instructions and regulations, it can be taken in relation to more important matters, and it would be unfortunate for us to place ourselves in a position of 'take it or leave it' because of decisions which had already been taken by United Kingdom Government authorities.
Regarding communications, there will be, in the very near future, Australian representatives at all important posts throughout this area, and our experience has been that information received from our own representatives is considerably more reliable than information obtained from other sources. The arrangements suggested underline the difficulties referred to above in relation to reporting on current political developments. The present arrangements will lead to one set of facts being sent to the Bureau and another set to this Department, with no effective means of co-ordination. My understanding is that the organisation in London in relation to the Foreign Office is slightly different, the Foreign Office having a closer relationship with the Bureau than it would be possible for this Department to have. The cases are not therefore parallel, but the effective working of the Bureau, from the point of view of political information, will depend upon co-ordination first of all in this Department of relevant facts.
Regarding the means of communication, my understanding is that the radio communication which is suggested for the Signal Intelligence Organisation is considered too expensive for the day to day work of the Government. I find it hard to understand, therefore, why it should be considered that radio communications can be used in this connection. Regardless of expense, we must, ourselves, in the near future, institute direct radio communication with our more important posts, just because Australian foreign policy cannot be effectively carried out without such direct communications. Before decisions are taken on Signal Intelligence Organisation, therefore, the whole question of governmental communications should be reviewed.
I note your comments on the location of the headquarters, and I can fully appreciate the difficulties involved. At the same time, it should be stressed again that, as is the case in London, the success of an intelligence organisation will depend entirely upon a close link with the Government and with the governmental departments, such as External Affairs, Commerce, Treasury, and others, concerned with Government policy in the area of strategic importance to Australia, and which, through their day by day work, are most likely to be in possession of the more important set of facts which go to build up strategic policy.
With regard to your last paragraph, I do not wish in any way to hold up consideration by the Government of the proposals you have to put before it, and my previous comments, and, in fact, these comments, are not designed with that end in view. The matter is an important one, and I have put for-ward comments merely because I believe they should be taken into consideration in any final decisions made. Nor do I wish for this Department to appear to be pressing a narrow departmental interest in matters of communications or any other matter. We are entering into a phase in international relations when, for security reasons, we must pursue positive policies, and, in my view, the proposals as put for-ward will embarrass the Government in doing this. I was aware that the Prime Minister stated that Australia would establish this Joint Intelligence Organisation, but the question is the type of Organisation which should be established, and I do not believe that, without a general review of the position, the alternative indicated above in my first paragraphs should be dismissed.