As contracting parties to the United Nations Declaration of 1
January 1942 [1], the Governments of the United States of America
and the Commonwealth of Australia pledged themselves to employ
their full resources, military and economic, against those nations
with which they are at war.

With regard to the arrangements for mutual aid between our two
Governments, I refer to the agreement signed at Washington on
February 23, 1942, between the Governments of the United States of
America and the United Kingdom, on principles applying to mutual
aid in the present war authorised and provided for by the Act of
Congress of March 11, 1941, and have the honour to inform you that
the Government of the Commonwealth of Australia accepts the
principles there-in contained as governing the provision of mutual
aid between itself and the Government of the United States of
America.

It is the understanding of the Government of the Commonwealth of
Australia that the general principle to be followed in providing
such aid is that the war production and war resources of both
nations should be used by the armed forces of each, in the ways
which most effectively utilise available materials, manpower,
production facilities and shipping space.

I now set forth the understanding of the Government of the
Commonwealth of Australia of the principles and procedure
applicable to the provision of aid by the Government of the
Commonwealth of Australia to the armed forces of the United States
and the manner in which such aid will be correlated with the
maintenance of those forces by the United States Government. [2]

1. While each Government retains the right of final decision, in
the light of its own potentialities and responsibilities,
decisions as to the most effective use of resources shall, so far
as possible, be made in common, pursuant to common plans for
winning the war.

2. As to financing the provision of such aid, within the fields
mentioned below, it is my understanding that the general principle
to be applied, to the point at which the common war effort is most
effective, is that as large a portion as possible of the articles
and services which each Government may authorise to be provided to
the other shall be in the form of reciprocal aid so that the need
of each Government for the currency of the other may be reduced to
a minimum.

It is accordingly my understanding that the United States
Government will provide, in accordance with the provisions of, and
to the extent authorised under, the Act of March 11, 1941, the
share of its war production made available to Australia. The
Government of Australia will provide on the same terms and as
reciprocal aid so much of its war production made available to the
United States as it authorises in accordance with the principles
enunciated in this note.

3. The Government of Australia will provide as reciprocal aid the
following types of assistance to the armed forces of the United
States in Australia or its territories and in such other cases as
may be determined by common agreement in the light of the
development of the War:-

(a) Military equipment, ammunition and military and naval stores.

(b) Other supplies, material, facilities and services for the
United States forces except for the pay and allowances of such
forces, administrative expenses, and such local purchases as its
official establishments may make other than through the official
establishments of the Australian Government as specified in
paragraph 4.

(c) Supplies, materials and services needed in the construction of
military projects, tasks and similar capital works required for
the common war effort in Australia and in such other places as may
be determined, except for the wages and salaries of United States
citizens.

4. The practical application of the principles formulated in this
note, including the procedure by which requests for aid by either
Government are made and acted upon, shall be worked out as
occasion may require by agreement between the two Governments,
acting when possible through their appropriate military or
civilian administrative authorities. Requests by the United States
Government for such aid will be presented by duly authorised
authorities of the United States to official agencies of the
Commonwealth of Australia which will be designated or established
in Canberra and in the areas where United States forces are
located for the purpose of facilitating the provision of
reciprocal aid.

5. It is my understanding that all such aid accepted by the
President of the United States or his authorised representatives
from the Government of Australia will be received as a benefit to
the United States under the Act of March 11, 1941. Insofar as
circumstances will permit, appropriate record of aid received
under this arrangement, except for miscellaneous facilities and
services, will be kept by each Government.

If the Government of the United States concurs in the foregoing, I
would suggest that the present note and your reply to that effect
be regarded as placing on record the understanding of our two
Governments in this matter. [3]

OWEN DIXON