Your 1118. [1] Lend Lease Stage II.

1. You may agree to proposal for a separate Australian section of
the Agreement and inclusion of a paragraph to the following
effect-'The Australian Government, in accordance with the terms of
the Reciprocal Aid Agreement concluded with the Government of the
United States of America on the 3rd September, 1942 [2], will
continue to supply to the United States Forces, as Reciprocal Aid,
such goods and services as it now furnishes and which are locally
available.'
2. This is a simple and clear undertaking to continue R.L.L. which
can be readily understood. It covers substance of second sentence
of your suggested paragraph which Treasurer feels is unnecessary
to repeat in detail and may be misunderstood here.

3. If United States authorities are not satisfied with wording of
proposed paragraph and desire amendment of existing agreement as
to area, you should advise that Australia has implemented
agreement in a very liberal manner to limit of her capacity and
granted aid to areas outside South-west Pacific Area and will
similarly examine any further requests having regard to
availability. We feel this should adequately meet United States
and you should press this strongly.

4. If, in spite of paragraph 3, they still press for specific
commitment to an extended area in the proposed agreement you
should reply that this is a matter upon which direct
representations should be made on Government to Government basis.

You can add that such a request would receive immediate
consideration of Commonwealth Government which will be meeting
next week.