PRESENT
Admiral Sir Ragnar Colvin, Chief of the Naval Staff
Lt Gen V. A. H. Sturdee, Chief of the General Staff
Air Commodore W. D. Bostock, Deputy Chief of the Air Staff
Essington Lewis, Director-General of Munitions
F. R. Sinclair, Assistant Secretary of Department of Defence Co-
ordination
The following were also present:

Sir Walter Massy-Greene, leader of the Australian delegation to
the Eastern Group Supply Conference
Maj Gen J. Northcott, Deputy Chief of the General Staff
N. K. S. Brodribb, Deputy Director-General of Munitions

AGENDUM No. 68/1940 (SUPPLEMENT No. 2) [1]

ESTABLISHMENT OF EASTERN GROUP SUPPLY COUNCIL
The Defence Committee considered the recommendation of the Eastern
Group Conference, summarised in cablegrams of 28th November [2]
and 11th December [3] from the War Board, New Delhi, in regard to
the co-ordination of supply arrangements and the establishment of
an Eastern Group Supply Council, and also Dominions Office
Cablegram 467 of 4th December [4], in which it is advised that the
United Kingdom Government are prepared to accept in principle the
setting up of the Council.

2. The recommendations of the Conference for the co-ordination of
supply in the Eastern Group are summarised in the attached
statement. [5] The following is an outline of the proposals
regarding the establishment of an Eastern Group Supply Council:-

The Eastern Group Supply Council is to consist of:A Chairman
appointed by the United Kingdom Government Representatives of
Australia, New Zealand, South Africa and India The representative
of the Chief of the Imperial General Staff, in charge of a Central
Provision Office, which is to be established in India.

The Council will deal primarily with demands for military
provisions placed by the Central Provision Office. It is to have
power to purchase, to hold stocks, and to call for information
with respect to the supply position in participating countries. If
possible, it is also to have power to make arrangements for new
production. Outside the field of military provisions, it will act
as a clearing house of information on supply matters, and should
be prepared to advise about problems of essential civil needs. It
will need authority to incur financial commitments for forward
buying, purchase and storage of output of small suppliers and
purchase and storage of goods for stock. Such funds should be
provided by the United Kingdom Government in the first instance,
subject to recovery from participating Governments.

Basis of Proposals of Conference
3. Sir Walter Massy-Greene submitted to the Committee the
following information as to the discussions and conclusions of the
Conference regarding the co-ordination of supply arrangements:-

(a) Discussions at the Conference had revealed that there was a
pressing need for the co-ordination of supply arrangements in
Eastern Group countries, primarily to ensure that the requirements
of the Military forces in the actual and possible theatres of war
in the Group were promptly and adequately met and the best use was
made of the available resources. At present, each country was
working on its own initiative with little or no co-ordination and
there was endless confusion and waste of effort. It was proposed
to set up five separate Military provision offices in the Group,
one for each possible theatre of war, which, for the purposes of
provision, are defined as follow[s]:-

(1) South African Group including Kenya and Uganda
(2) Sudan, Egypt, Palestine and Syria
(3) Iraq, India and Burma
(4) Malaya
(5) Hong Kong
Each provision office is to be responsible for formulating its
demands and sending them to a Central Provision Office, which is
to be established in India.

(b) The internal provision offices of Australia and New Zealand
will continue to arrange their own internal requirements and have
a first call on their production. They will indent on the Central
Provision Office only for such articles as cannot be supplied
locally.

(c) The Conference considered it essential that the requirements
of all the theatres of war should be collected by one central
authority, who will be in a position to know the total
requirements of the fighting forces in the Group. It is for this
reason, primarily, that a Central Provision Office is being set
up. The Office will be in charge of a representative of the Chief
of the Imperial General Staff and will be entirely independent of
the Government of India.

(d) The Central Provision Office will place firm demands for both
immediate and future requirements on the Eastern Group Supply
Council, which, as the Supply authority, will arrange to have them
met through the Supply Departments of the individual countries or
from sources outside the Eastern Group. (Note: The constitution
and functions of the Council are summarised in paragraph 2 above.)
The Central Provision Office and the Council are to be separate
organisations, but the Military Officer in charge of the Central
Provision Office is to be a member of the Council. This will
ensure effective liaison between the two organisations. (e) There
are a number of matters in respect of which a definite
understanding had still to be arrived at, e.g:-

(a) Drawing upon surpluses
(b) Initiating new production
(c) Placing orders outside the Eastern Group
(d) Finance
It was agreed at the Conference that these could be settled by
mutual agreement between the participating Governments.

4. Sir Walter Massy-Greene considered that Australia would have
everything to gain and nothing to lose by participation in the
proposed organisation. The staffing of the organisation will
present some difficulty and in his view the success or failure of
the whole scheme depended largely on the provision of an efficient
staff As some time must elapse before the organisation could
function effectively, it was important that a nucleus staff should
be provided immediately so that preliminary work could be
undertaken at once, and the outstanding matters resolved as soon
as possible.

Conclusions of Defence Committee
5. The Defence Committee recommend that the Government agree in
principle to the setting up of an Eastern Group Supply Council. As
stated in Dominions Office telegram 467, however, the precise
scope of the Council's responsibilities and methods of operation
require further consideration by the participating Governments and
the United Kingdom Government.

6. There are a number of important questions of principle involved
in the matters not finally determined (see paragraph 3 (e)), but
the Committee note and accept the view of the United Kingdom
Government that, whatever may be the outcome of the consideration
of these matters, there will be a wide field in which the Council
could effectively operate. The need for early action for the
establishment of a nucleus organisation is evident, and the
Committee would emphasise, in this connection, the importance of
the provision of a competent staff which, as mentioned by Sir
Walter Massy-Greene, might very well be the determining factor in
the success or failure of the whole scheme. [6]