Thank you very much for allowing me to see the papers which you sent to me with your letter of 21st July and which I am now returning. You invite me in your second paragraph to express an opinion on the adequacy of the security measures they outline.
2. It seems to me that the papers indicate a considerable recent improvement of the preventive security situation in Australia and that this improvement is the result of sound security planning. I appreciate that this is largely a manifestation of many years of work on the part of yourself and others who have all along seen the need for security. So far as recent developments go, however, I was greatly impressed by the copy of your letter of 30th June 1949 to Mr. Gray and by the progress report which you attached to it. This indicates advances in all the main aspects of preventive security, namely:
(a) General education in the awareness of the need for security;
(b) The issue of a revised edition of security instructions;
(c) The security checking of those having access to secret work;
(d) The physical security of departments and buildings where secrets are handled; and (e) The security of communications.
4. It seems to me that the rate of progress of security in Australia must now depend largely upon the new Security Service and upon the Commonwealth Investigation Service so long as it continues to carry out its present vetting functions. I say this because it is clear that preventive security on the lines set out above can only be fully effective if the investigating machinery of the Security Service operates efficiently and is thus able to exclude known undesirables from secret work and to detect espionage agents. I am convinced that the new Service is designed on sound lines and I am doing all I can to support it and further its progress.
5. I was sorry to learn that your Washington visit did not have the immediate result for which we hoped. It appeared possible that the Americans would take the view that the continuation of the embargo was a positive benefit to the other side and that the improvements in security which you described to them would justify them in lifting it. As, however, they apparently regard the clearing up of the situation of which we know as a prerequisite to the lifting of the embargo, it seems to me that the next move is with the new Security Service. I can assure you that I am giving all possible assistance in this matter.