Your telegram 2nd January No. 2. [1]

We are grateful for this very full expression of your views which
we have read with great interest. We were particularly glad to
have text of statement made by Evatt in House of Representatives
on September 3rd which so largely corresponds with our own views.

We entirely share your view as to the importance of the issues
raised by the colonial question and agree that the fullest
possible discussion with the United States Administration is the
essential preliminary to any statement on the subject.

As regards, however, your suggestion that question of any public
statement might be held over until it has been possible to carry
through a general discussion of the question of the post-war
settlement, we feel this delay impracticable in view of the
present state of United States opinion, which [may] [2] well
poison the prospects of future co-operation between us and the
United States.

Moreover, Mr. Hull has definitely raised the question with the
idea of a possible immediate declaration in view, and within the
last few days has again expressed to Lord Halifax his desire for
early discussion. We feel, therefore, that we must pursue the
matter with him on this basis without more delay.

Course of these discussions, as to which we will certainly keep
Dominion Governments fully informed, will show whether it would be
better to begin with two-party United Kingdom-United States
Declaration or whether an attempt should be made to try to bring
in from the beginning other colonial powers.

We agree, of course, as to the importance of avoiding any
misunderstanding with them in the matter. We are glad to note that
the general line of your suggestions in paragraph 7 of your
telegram corresponds very closely with what we have in mind as
regards the contents of the suggested declaration.

On one point, however, we have, after very full consideration,
come to the conclusion that we are not prepared to contemplate the
setting up of an International Colonial Commission on the lines
corresponding to that of the former Permanent Mandates Commission
to which parent states could be held responsible.

We do not think that such a measure would be practicable and our
concern has rather been to secure full consultation and co-
operation, on a regional basis, of those States which have a
definite interest in the area concerned.

As regards paragraph 8 we agree that Colonial security would be a
corollary of a general security system, but we have felt it
necessary to introduce at this stage the defence aspect in
relation to Colonial policy, since the burden of complaint against
us in the Far East is that of failure adequately to defend the
Colonial Empire.

It seems to us that any declaration as to future policy which bore
no reference to this aspect of the matter would appear lacking in
realism. We feel, too, that so far from prejudicing post-war
general security arrangements, the reference to defence which we
now contemplate putting forward in the proposed declaration would
be helpful from the wider point of view.

As regards paragraph 9 of your telegram we have asked Mr. Bruce to
repeat to you the replies from other Dominion Governments. [3]

In all the circumstances the Cabinet, after full consideration of
all the issues involved and in the light of your views [and] those
of other Dominion Governments, are disposed to authorise Lord
Halifax to approach Mr. Hull on the basis of the revised draft
statement, the text of which is set out in my immediately
following telegram D.14. [4]

Should be very grateful if you would telegraph any further
comments at earliest possible moment.

Matter is now becoming extremely urgent and we should like to send
instructions to Washington early next week, Lord Halifax having
promised Mr. Hull another conversation at an early date.