1. I have received your very secret message of 14th January conveyed to me by the High Commissioner. We fully appreciate the great difficulties you have experienced in all negotiations with the Soviet Government. We, too, have been giving very anxious consideration to the world situation.
2. First, I must stress frankly that the Australian Government cannot undertake to support the United Kingdom or the United Kingdom and United States Governments in any policy decided upon without the fullest prior consultation and agreement by us at every stage of consideration of that policy. We are very concerned to see developments in United Kingdom Government policy in Greece and the Middle East undertaken and practically crystallised before we were even informed. The conversations between the United Kingdom and United States Governments referred to by you recently were not even mentioned to Dr. Evatt, although he was in New York in the closest co-operation with Mr. McNeil.
3. Generally speaking, the Australian people, who have far less sympathy for extreme policies, such as Communist and Fascist movements, than most other peoples, are not convinced of the desirability of giving support to any decision to form a western alliance directed against the Soviet, particularly when that alliance is to include such undemocratic governments as exist at present in Spain and in Greece. With regard to Spain, the United Kingdom Government at New York supported a resolution directed against Franco.
4. We consider you are over-optimistic in relying upon the organisation of 'ethical and spiritual forces of Western Europe backed by the power and resources of the Commonwealth and of the Americas'. It should be realised that spiritual forces are being further weakened each day, not by Communist infiltration only, but equally by failure to provide stability and the necessities of life for the people of Western Europe. American behaviour in this respect is at times most discouraging. These spiritual forces, based as they are on hopes of peace, will suffer a further severe rebuff if at this stage the initiative is taken by the western powers to institute any definitive alliance, still more 'an offensive alliance directed against the Soviet Union'.
5. It is also quite over-optimistic, in our view, to count on the support of the resources of the Americas. On the contrary, our fear is that the United Kingdom Government will be left to carry out a United States policy which the United States itself is not prepared or not able, for constitutional reasons, to carry through. The United Kingdom Government is not, in our opinion, in a position to do this.
6. Our approach would be more positive. In Greece, we must admit the existence of an undemocratic government, which could not command the full support of the democracies. The Greek dispute is not an issue on which we can ask our people to take a step which might lead to war. As pointed out in London by Dr. Evatt and by me, we prefer not to allow considerations of strategy to influence our considerations of disputes which can only be settled permanently on a basis of justice. Similarly, with respect to Palestine we try not to allow decisions on strategy to influence our support for United Nations decisions. In other words, we consider foreign policy, if it is a policy based on strategy and not permanent settlement of disputes, tends to become a policy of despair bringing about just those situations it should be designed to avoid. From the point of view of obtaining the support of our peoples and of organising 'spiritual forces', this view cannot be too greatly stressed.
7. In our view, the Council of Foreign Ministers should not have broken up when it did: our information leads us to the view that discussions were broken off without due consideration of the effects. Indeed, there is some reason to believe that the United States wanted the conference to break up. Unfortunately, as we predicted when it was formed, the Council, lacking the broader approach of a larger body, has made really very little contribution to the peace settlements or to peace. Once established, however, it was, in our view, unfair to the nations which had accepted it to bring about its breakdown in circumstances which, in the eyes of our peoples at least, did not clearly justify such action. Reparations issues are obviously issues for independent tribunals.
8. Suspicion and hostility between Russia and the western powers present before the war, and not wholly removed by war-time co-operation, have led to a situation which can again lead to war. It is no solution to confirm this suspicion by making an offensive alliance against Russia. Such an alliance would appear to give justification for the policy she has been pursuing ever since the end of the war: it will be argued with effect that this is what was feared. It is almost hopeless to mobilise moral and material force in these circumstances unless the aggressive acts come clearly from Russia.
9. In these circumstances, especially in the absence of closer consultation, we cannot promise support to your proposals at this stage. Rather, we would endeavour to mobilise moral and material forces by always upholding the United Nations and principles of justice rather than policies of strategy and expedience: we would recognize the undemocratic nature of the Greek Government and seek early reforms and elections: we would insist on Arab support of United Nations decision on Palestine, especially as they have and will receive great treaty benefits from the United Kingdom: we would refrain from encouraging the Chinese Government in its reactionary and dishonest policies: we would refrain from 'secret' alliances which always seem to be fully reflected in the press: we would not welcome support for the remaining fascist governments: we would not use economic power and relief to determine forms of government. But, when justice demanded, we would agree that the strongest action should be taken through the United Nations against the Soviet or any other power in order to uphold the United Nations Charter. The success, and it is a success, of our intervention in Indonesia has demonstrated the value of standing by principle despite seemingly strategic or other doubtful interests.
10. Finally, as a test of good faith, we would endeavour to extend the policy we ourselves adopt in respect of trade in munitions of war. Our policy is to refuse to sell munitions to any country. If the United States and Russia were both asked to follow a similar policy, subject to appeal to a small United Nations commission of representatives of small powers, their responses would demonstrate the true position: and, if trade in munitions could be stopped effectively, the situation in Greece, the Middle East and China would be no longer a threat to the peace. The United States is itself in a position of tremendous advantage and has therefore not encouraged limitation of armaments. That advantage is being lost because arms are becoming less and less important in the struggle in Europe. Meanwhile, moral support for the democracies is being prejudiced by continued supply of munitions to small European countries.
11. I wish to make it quite clear that the Australian Government believes its interests very much bound up in the Pacific area: in the event of European conflict, our whole manpower might well have to be devoted to the protection of our position and interests in this area. There is no government in the South East Asia or Pacific areas which is stable: every government can be prevailed upon to adopt a policy hostile to us if it so suited powers engaged in a European conflict.
12. I believe that, at the right time, Australia may be well placed to act as mediator in the broader dispute which already exists between western powers and the Soviet. We are watching the position carefully from this point of view. In the meantime, we do not wish our position to be prejudiced by association direct or indirect with any anti-Soviet alliance. A last chance to preserve peace might in that way be destroyed. To this end, in the event of any statement as contemplated in your message, it may be necessary for us to indicate that we have not been consulted as to the formulation of this policy.