NEW CALEDONIA-REPORT OF MILITARY MISSION-ASSISTANCE BY
COMMONWEALTH GOVERNMENT

With reference to the discussion which took place at the meeting
of the War Cabinet in Melbourne on 17th April, 1941, on the above
subject, I am forwarding for your information, copy of Minute No.

(959) [1] which has been confirmed by me, recording the decision
of the War Cabinet on the questions that were then discussed.

You will recollect that during the course of the discussion which
took place at this meeting, the Commonwealth Government
representative in New Caledonia (Mr. B. C. Ballard) was emphatic
as to the necessity, in viewing the political situation in New
Caledonia, of linking this with the economic life of the
community, and that it was desirable that if the present political
stability of the community in favour of the Free French Movement
was to be maintained, the outstanding economic questions which are
at present the subject of discussion between New Caledonia and
Australia should be decided at the earliest possible date.

As you were at the meeting, you will be aware that the feeling of
War Cabinet was that, in view of the relative importance of the
preservation of the integrity of New Caledonia to the defence of
the Commonwealth of Australia, it was desirable that in the
adjustment of these outstanding economic questions, the
Commonwealth should not adopt a bargaining attitude but should
approach the problem in a generous spirit even if such would mean
the final acceptance by the Commonwealth Government of some
financial liability in connection with these problems.

I should be glad to have from you at an early date your views as
to the attitude that should be adopted in regard to the several
outstanding matters referred to in the War Cabinet Minute.

In view of the present international situation and the moral
effect that the position in Greece and in the Mediterranean
generally may have had in communities which have had confidence in
an ultimate British victory, I am particularly concerned that the
people of New Caledonia should have no cause to feel that the
Commonwealth Government has broken faith with them.

Would you also please arrange for instructions to be issued to Mr.

Ballard to forward a quarterly report of any developments that may
have taken place affecting the considerations outlined in the War
Cabinet Minute No. (959), and for this to be presented to War
Cabinet for its information. It would, of course, be expected
that, should developments occur within a quarter which vitally
affect the situation, Mr. Ballard will present a Special Report
which you would forward for War Cabinet consideration.

A. FADDEN