In my following telegram [1] is contained text of telegram
received by Churchill from Roosevelt, setting out completely new
proposals for general conduct of whole World War. In the absence
of any other reply to your telegram 166 [2] which was despatched
to Roosevelt by Churchill as advised in my P. 61 [3], this seems
to me, though not expressly stated, to be meant to cover the
substance of telegram 166.

2. To remove complexity and simplify responsibility the President
suggests that the World War theatre should be divided into three
areas:

(a) the Atlantic under joint British and American responsibility;

(b) the Indian, Middle East and Mediterranean areas under British
responsibility;

(c) the Pacific, including China, under United States operational
responsibility.

The Pacific area includes Australia and New Zealand. Its western
boundary, though not stated by the President, would be the
boundary indicated in your telegram 41 [4] [for] [5] the Anzac
Area and agreed by the Pacific War Council.

3. This proposal places the whole responsibility for all
operational decisions in the Pacific area in the hands of the
United States Chiefs of Staff, subject to the overriding proviso
that the grand strategy of actual operations in the three areas
would remain, as they are to-day, the subject of study and
decisions of the Combined Chiefs of Staff both in Washington and
London. The joint committees on raw materials, shipping and
munitions would continue to function as they do now, all subject
to joint approval of Churchill and Roosevelt.

[4. Churchill, who will send full telegram containing his views
tomorrow [6], favours in principle the American proposals. He
thinks that there should be in London an active Pacific War
Council following the whole course of the war, and especially
making certain that the problems of every constituent country are
seen in proper perspective and making recommendations to both the
United States and British Chiefs of Staff with regard to
operations which deal with zones adjoining the boundary line. It
is felt that decisions for many activities along this region may
have to be made by either body or jointly.] Churchill is replying
to the President saying that his proposals are being considered by
the Pacific War Council and are being forwarded to the respective
Governments immediately.

5. The Dutch Government feels that the proposals have the merit of
greatly simplifying procedure, but are very keen on the Pacific
War Council functioning vigorously in London. They point out that
the idea of the original agreement between the Prime Minister and
President envisaged twin control, in which balance was held
between Washington and London, and that, to keep the centre of
gravity right, the Pacific War Council must continue to function
in London especially in view of the possibility that the course of
recovery of the territory ravished by Japan maybe from the
western, just as well as from the eastern side, and [control] of
both offensives will need to be closely coordinated.

6. The initial offensive through China must be through territory
under British responsibility and China also feels that there
should be a live representative body in London. Both countries
would welcome as well the suggested advisory representation in
Washington.