1. MacArthur talked to me for an hour this evening. On meeting him he appeared rather cold. I asked him whether he had noticed the press reports that you were in agreement with his views on the need for an early peace conference for Japan. He said he had not seen these reports but appeared very pleased to know that you were supporting him. I then said that you had asked me to invite him to give his personal view on when the peace conference could be held and on the kind of control which should be exercised over Japan after the peace treaty had been signed.
2.MacArthur then expounded what I described in my monthly report for January as 'the doctrine of three phases'. He said that the military phase of the occupation had not only succeeded physically but spiritually. It had purged the minds of the Japanese of all militarist ambitions. He said the success of the second phase, the political, could not yet be finally measured because so much depended on how the Japanese themselves would use their new constitution.
3. 'All the same' MacArthur said, 'the success of these two first phases has been fabulous, almost fantastic'.
4. MacArthur went on to say that the third stage, the economic, presented much greater difficulties because it depended on the willingness of allied Governments to do the right thing. Since the economic measures necessary presented problems which were civilian and not military and since he felt it would be essential to go ahead with the third stage immediately he believed the peace conference should be held as soon as possible.
5. I said 'Do you think it should be possible to have a peace conference before the end of this year?' MacArthur replied 'That seems to me a very pessimistic view. We must let these foreign ministers get on with their work in Moscow but I shall be very disappointed if the peace conference for Japan cannot be convoked by July of this year.' MacArthur went on to say that he felt the peace conference should be held in Tokyo. I remarked that historically victor nations seemed to like to hold peace conferences in their own countries. I said I had imagined that this conference would be held in Washington or perhaps in San Francisco. MacArthur replied that he did not mind where the peace treaty was signed-it could be signed in Washington-but he felt that the preliminary work and the real work of the people engaged in the conference should be done in Tokyo.
6. MacArthur expressed the following views on the kind of controls that it would be necessary to exercise after the conference. He said he did not believe that a military occupation would be necessary and so far as he personally was concerned he wanted to get home once the peace treaty was signed. He felt the control of Japan should be exercised within Japan by civilian experts who would be able to inspect everything that was going on here.
Insofar as military control was necessary he felt that this should be exercised from outside. He referred specifically to the importance of an air base on Okinawa.
7. I asked MacArthur what he had in mind when in his recently published message to the Senate he said that the present scale of military occupation was the minimum consistent with safety.  He had referred earlier in conversation to the danger of Russian moves into Japan. Accordingly I asked him whether in stating that it was necessary to maintain the present strength of military occupation, he was not thinking more of Russian danger than Japanese danger. He replied-'I was thinking of both'. He explained that this was partly a psychological question. So long as Japan was a military area, it was necessary to make a show. After the peace treaty it would be possible to withdraw virtually all troops from Japan proper. Moreover, when he had said that military forces now in Japan were the minimum necessary he had not been thinking specifically of B.C.O.F. forces. If British Commonwealth countries felt it desirable to make some reduction in their forces here he would certainly not protest.
8. I asked MacArthur what picture he had of the actual machinery for controlling Japan after the peace treaty. He said that he felt it should be United Nations controlled. I remarked that there were a great many United Nations and that it would perhaps not be very helpful to have South American or Balkan Governments represented on the Control Commission for Japan. MacArthur said that he fully agreed that the nations controlling Japan should be only those nations which had played an active part in the Pacific war, but he hoped that it would be possible for the United Nations to delegate to some sort of Regional Commission the responsibility for the control of Japan after the treaty.
9. MacArthur indicated that he would welcome the early demise of the Far Eastern Commission and the Allied Council. At the same time he felt that the Allied Council had done a good [deal of]  useful work. Some of the recommendations of members had been most valuable and questions raised on the Council had been a stimulus to S.C.A.P. MacArthur reminded me that he had never tried to conceal his view that it was a mistake to establish a Council. 'It was a Gyp', he said. He went on to speak to the Council in what seemed to all a very patronizing way. I said quietly that he had made his attitude towards the Council very clear and that this had often placed members of the Council in a very humiliating position. I said I felt personally that if he himself had not built up such a permanent reservoir of good will by all he had done for Australia these last five years, it would have been very difficult for any Australian to have put up with the contemptuous way in which S.C.A.P. had so often treated the Council. At this MacArthur laughed in a friendly way and said he was sorry, if his men had sometimes been a bit tough with the Council but the fact was he distrusted Derevyanko. MacArthur said that if I knew the full story of all the trouble Derevyanko had caused in Japan I would understand better the firm and perhaps sometimes rather rough line that his representatives had taken on the Council. I replied that I was not wanting to express any sort of bitterness or resentment for what had happened here in the past and I felt the important thing was to forget past Council irritations in order that we could co-operate in the closest way in our work on the peace settlement.
10. MacArthur then said that during his time in the Pacific he had never had any kind of political differences with the Australian Government; that he deplored the view that because a country had only seven million people it was a small power; that in the Pacific Australia with New Zealand was a very important power;
that he fully agreed with your view that Australia should take a principal part in the Pacific settlement; that he was sorry you had not come to Japan; that whenever you wish to express your views to him or to discover his views he was extremely happy to consult you in the spirit of comradeship that had characterised the American-Australian effort throughout the war.
11. MacArthur said he felt that no country in the world in relation to its resources had played a finer or more gallant part than Australia and he looked for-ward to the closest collaboration with Australia in planning the treaty with Japan.
12. MacArthur emphasised throughout that he was talking to me informally and expressing his personal views.