1. PACIFIC. Discussions on the Pacific have been satisfactory and
our general point of view on bases as adopted by Cabinet in
Australia has been accepted by the United Kingdom Government. This
is a great advance on the position in January when United Kingdom
was prepared to hand over certain Pacific Territories and bases
without a corresponding obligation on the part of the United
States of America. It is now agreed that United Kingdom, Australia
and New Zealand should approach the United States Government with
a suggestion for a, conference at which regional arrangements
would be discussed, including obligations which each country
should undertake and as part of these arrangements the joint use
of certain bases. The present position is that as a next step
Bevin will discuss our propositions with Byrnes while in Paris.

2. DEFENCE. While there has been no finalisation and we have
emphasised that Australian Cabinet must consider all proposals, we
have given approval to four propositions in relation to the
organisation of Commonwealth Defence.

(A) A fundamental of a system of Commonwealth Defence is that
United Kingdom should maintain a mission in each Dominion and each
Dominion should maintain similar missions in London or any other
Dominion if they so wish.

(B) Such a system would overcome the difficulties of a centralised
system which is unacceptable as it restricts freedom of action of
any member of the British (Commonwealth to make bilateral
arrangements with Allies outside the British Commonwealth.

(C) Such a system provides for co-ordination while at the same
time is based on National Defence Organisations which the United
Kingdom and each of the Dominions should maintain.

(D) It will take time to bring this decentralised system into
operation, but provided all parties work on the basis of the above
three propositions the necessary framework will soon be developed.

3. Besides Pacific and Defence matters, there have been informal
discussions on several matters of International concern,
particularly in relation to present discussions of the Council of
Foreign Ministers. These have been informative and tentative. On
Italian Colonies we expressed the view that-
(A) Colonies should not be returned to Italy.

(B) Russia's proposal for its Trusteeship over Tripolitania was
unjustified.

(C) Because of importance of U.N.O. and America's co-operation,
plan should be adopted for placing Colonies under United Nations
Trusteeship. On Palestine report we have emphasised necessity for
United States and United Kingdom to have joint policy and joint
responsibility both in adoption and implementation of plan.

4. You will, no doubt, make it clear that the whole of the matters
mentioned are strictly confidential. Most of the matters are as
yet tentative and provisional and publicity may actually defeat
our objects.