Basing of Royal Naval Forces on Australia.

You will be aware that following upon the Prime Minister's
discussions in London and the deliberations of the Quebec
Conference, the United Kingdom Government has decided to base
Royal Naval Forces (including Fleet Air Arm) on Australia. [1] The
United Kingdom Government has been advised that the Commonwealth
will be glad to co-operate to the fullest possible extent in the
execution of the necessary works and other preparations arising
out of these proposals. [2] At the same time attention has been
drawn to our difficulties arising from the acute shortage of
manpower and materials.

2. It is assumed you will have seen Dominions Office cablegrams
Nos. 271 [3], 299, 300 and 301 [4] and our replies Nos. 269 and
298. [5] In addition to the requirements listed in the Dominions
Office cablegrams, requests are being received through A.C.N.B.

[6] for the implementation of other projects.

3. The Defence Committee is examining the Naval outline plan as
varied by advices from the Admiralty, with the object of arriving
at the total requirements thereunder and assessing the extent to
which Australia can meet such requirements and the extent to which
it will be necessary for United Kingdom to provide its own needs.

4. Although our acute position in regard to manpower and materials
has been stressed to the United Kingdom Government and attention
drawn to the action rendered necessary to effect releases from the
Services for high priority industry, you will observe from
Dominions Office cablegram No. 301 that Australia is being asked
to meet direct labour requirements to the extent of 4,875 in
respect of supply items and 5,000 plus 3,700, total 8,700, in
respect of maintenance and repair of Royal Naval vessels. There is
a further [7] request received through A.C.N.B. for Australian
Service personnel to the extent of 3,860 to be provided for shore
facilities for aircraft of the Royal Navy. These requests are
additional to extensive demands being made on our labour resources
for works.

5. Having regard to our cablegram No. 269 of 16th October, and the
demands being made on our labour resources, you will appreciate
our fear that it appears the Admiralty has not fully realised the
seriousness of our advices in regard to manpower. A recent review
[8] of the over-all manpower position made by War Cabinet
indicated that, after apportioning the 45,000 special releases
from the Services referred to in cablegram No. 269, and allowing
for absorption in industry of routine discharges, there would
remain at 30th June, 1945, a deficiency of approximately 50,000
manpower units for high priority requirements, without taking into
account any appreciable contribution for the United Kingdom Forces
to be based on Australia.

6. You will recall that, during the Conference of Prime Ministers,
I stated our position at some length and outlined the difficulties
that were being encountered in rebalancing the War Effort in order
to remove certain strains and stresses which had arisen from the
excessive diversion of manpower to the fighting forces and the
direct civilian War Effort when we were in grave danger. [9] The
solution of these difficulties was the purpose of my discussions
with Mr. Churchill, President Roosevelt and the Combined Chiefs of
Staff. There is a possibility that the Admiralty is viewing this
matter from a different angle, viz. that their requirements should
be met, to the greatest extent practicable, from Australian
production, even if this involves curtailment of our other high
priority commitments. You will not overlook the possibility as to
whether United Kingdom manpower or Board of Trade policies in the
post-war period are exercising some influence on the extent of the
demands being made on the Commonwealth.

7. Without in any way retracting from our assurance that the
Government intends to make as full a contribution as practicable
to the needs of the United Kingdom Forces based on Australia, it
is felt that liability to misunderstanding of the extent of our
available capacity could be removed and advantages generally
accrue, if you could discuss this subject with the United Kingdom
authorities.

CURTIN