1. JAPAN (i) Preparations for settlement with Japan 90. It was decided at the end of February that if Australia were to play the primary part in the Japanese peace settlement her position and record as a belligerent in the recent war demands it would be necessary to prepare complete and authoritative documentation covering all aspects of the forthcoming Pacific Settlement and Australia's interests in it.
91. In the past two or three years a considerable amount of work on problems connected with the future of Japan has been done in the Department. It was necessary, however, to make special provision for an overall study of the problems involved. A Preparatory Working Committee for the Pacific Settlement was therefore established at my direction. This committee at present consists of:-
92. Sir Frederic Eggleston (chairman), Professor Copland, Australian Minister in China, Mr. Macmahon Ball, Head of Australian Mission in Japan and member representing jointly United Kingdom, Australia, New Zealand and India on the Allied Council for Japan, the Australian Representative on the Far Eastern Commission (Hon. N.J.O. Makin), the Secretary of the Department of External Affairs, and the Head of the Pacific Division in the Department as Secretary of the Committee. 
93. Arrangements were made for an officer of the Department to deal with administrative matters connected with the work of the Committee and a full-time research officer was appointed to undertake research under the direction of the Committee.  At the first meeting of the Committee, held on March 11th, the method of preparing papers locally was agreed upon, and it was decided to ask various posts abroad to draw up additional draft papers.
94. Since March 11th, a number of meetings have been held. In the light of indications that a Japanese Peace Conference might be proposed at comparatively short notice, the work of documentation has been expedited. A series of information and policy papers has been prepared and are constantly being added to. Based on these documents a preliminary draft of the outline of contents of a treaty with Japan was drawn up in the Department. This draft, including the special section on control or supervision, has since been considered in detail by the Committee at its meetings in Canberra, and has also been forwarded to the other members abroad.
Arrangements were also made to obtain New Zealand's comment on the draft.
95. For some time it has been our intention to propose British Commonwealth consultation in advance of any peace negotiations.
Having regard to the special position of Australia and New Zealand in the Pacific Settlement and to Australia's representation of common British interests in Japan, I felt that the British countries concerned should meet in the Pacific to discuss both procedure and substance with regard to the settlement.
Negotiations to this end are not yet completed, but the New Zealand Prime Minister prefers a Canberra venue, Canada appears to favour Washington, South Africa shows little interest, while India is indifferent as to the place of meeting.
96. An outline working draft of the treaty has been drawn up in the Department by the officers working with the Preparatory Committee and is at present receiving my consideration.  Special stress has been laid on the setting up of a body to be known as the Supervisory Commission for Japan. The proposal is for this Commission to supervise the implementation of the terms of the Peace Treaty, setting up for the purpose special machinery of control and inspection. It would consist of representatives of the following Governments: Australia, Canada, China, France, India, Netherlands, New Zealand, Philippines, U.S.S.R., U.K., U.S.A.
Small garrisons of the Supervisory Commission for Japan would replace the present SCAP occupation forces.
97. Among the Articles of the proposed treaty which are being considered by the Australian Preparatory Committee are those providing for enforcement of sentences against war criminals, surveillance of purged officials, disestablishment of State Shinto, permanent dissolution of the Zaibatsu, complete disarmament, banning of secret police and secret societies, exaction of just reparations and the banning of Japanese whaling in the Antarctic.
98. Among the constructive articles particular stress is laid on those dealing with review of the constitution and measures for the democratization of Japan, including the encouragement of trade unions, reform of the educational system and a reform of the system of land tenure more drastic than that instituted by SCAP.