Repeated to Prime Minister of New Zealand [1], Wellington No. 155.

Your telegram No. 298 [2], 3rd paragraph, indicating suggestions
of discontent in French Pacific islands.

Following upon visit of Military Mission to Noumea, Ballard [3]
recently returned to Australia accompanied by Captain Dubois of
Free French Forces for discussions with War Cabinet. [4] Whole
question of assistance to New Caledonia fully reviewed and
following decisions were taken:-

(1) Defence Measures
Commonwealth Government decided to make available certain supplies
of arms, clothing and equipment to enable approximately one
battalion (900 to 1,000 men) to operate effectively. Arrangements
have also been made for the despatch of the Expeditionary Force
limited to 600 men (300 from New Caledonia and 300 from Tahiti)
from New Caledonia to Australia early in May, and the Commonwealth
Government decided that this Force should be conveyed to the
Middle East in an Australian convoy as soon as necessary
arrangements could be made. In addition, arrangements are being
made for installation of coast defence battery of two 6" guns at
Noumea. New Zealand Government is providing guns and installation
will be arranged by Australian personnel, who, after completion of
training of local personnel, will return to Australia. Twelve Free
French personnel are to be sent to Australia for instruction. It
was also decided to establish an air advance operational base,
including an aerodrome and flying boat base in New Caledonia.

R.A.A.F. will be responsible for all aspects of administration and
personnel located at the base and some 30 R.A.A.F. personnel as
permanent base staff will be located in New Caledonia. Captain
Dubois assured Commonwealth Government that no objection would be
raised by New Caledonian Government, but it was agreed that
official confirmation of the arrangement would be obtained from
Sautot [5] with the concurrence of de Gaulle. [6]

As regards supply of arms, clothing and equipment to Tahiti, it
was decided that this question would be taken up by Commonwealth
Government with Government of New Zealand. As regards expenditure
incurred in connection with defence, Commonwealth Government would
make finance available in first instance and expenditure involved
would be merged in general account with Free French Movement. All
questions relating to settlement of this advance to be
subsequently adjusted between Governments of United Kingdom,
Commonwealth and New Zealand and ultimately with Free French
authorities.

(2) Economic Questions
Commonwealth Government decided that New Caledonia should be
accorded the same treatment as Australian State or Territory in so
far as purchase by New Caledonia of its requirements from
Australia is concerned. It was decided also that outstanding
economic questions should be settled as soon as possible. Specific
economic questions considered were as follows:-

(a) Coffee: Purchase of whole crop had already been approved by
Commonwealth Government and only outstanding questions relate to
machinery and procedure.

(b) Copra: As you are aware arrangements have been made for
disposal of accumulated stocks of copra towards end of May, and
consideration will be given to question of compensation, ex 'Suva'
incident [7], when details as to price are received.

(c) Nickel: Position in relation to nickel seems to be
satisfactory, and it is expected that market will be found for
full production of approximately 10,000 tons matte by bringing
into use third furnace.

(d) Chrome: Small miners producing between 12,000 and 14,000 tons
require to be provided for. Lafleur, largest of small producers,
recently visited Australia and said he could sell output to United
States if shipping could be made available. This matter is being
pursued, but if necessary shipping cannot shortly be produced it
will be necessary for Commonwealth Government to purchase output.

(e) Ballard had conversations with Treasury regarding exchange
position. You have been advised on this aspect in my telegram No.

257. [8]