Yesterday I had a further conference with Byrnes, Secretary of
State, in relation to Manus and the general question of Pacific
bases. I am very pleased to report that he now favours an
acceptance of the principle that there should be reciprocal use of
facilities. In other words, that in return for America's right to
use facilities at Manus, they are prepared to afford Australia
facilities at some place, or places, to be determined, which are
under United States control.

I pointed out to Byrnes quite frankly our arrangement to co-
operate with Britain and New Zealand, and he was quite
understanding of the position. He will communicate with Bevin on
the general principle in the expectation that at Paris the three
of us will be able to carry the proposal forward to a further
point of practical completion. I think it is remarkable to find
this acceptance of the principle for which we have contended,
namely that the United States, in return for the use of facilities
which they have created at Manus, will be prepared to confer upon
us a right to similar facilities in a territory or territories
which they themselves control. We have carefully avoided any
detailed discussion on the actual facilities and bases where the
facilities are situated, although I have suggested Guam as an
obvious place corresponding to Manus. I visualise an arrangement
by which not only Australia, but Britain and New Zealand will be
able to use facilities at Guam, provided the United States were
able to use facilities not only at Manus, but on other South
Pacific bases controlled by the United Kingdom and New Zealand. In
short, there should be an effective pooling of facilities.

It may be that the arrangement will not in the first period be as
extensive and cover so many places as might ultimately be desired,
but it would establish a working principle of reciprocity and
mutuality and I believe it would, as your cable itself suggested,
constitute a practical business-like regional arrangement of
decisive importance to Australia.

If we can succeed in maintaining the position I reached yesterday,
and I am now confident we can, we will be able to explain to the
Australian people that we are making an arrangement of a joint and
reciprocal character, in which Australia will not only be giving
something, but getting an equivalent return of value to our
defence system in the Pacific, and benefiting not only Australia
and the United States, but the United Kingdom and New Zealand as
well.

Of course I have not made any definitive arrangement, but I hope
that before July 30th you will have the report of the Defence
Committee [1], and will be able to tell me in Paris that you
approve in principle the new approach which, as I explained
before, was made by me when it became obvious that by some new
approach we might obtain an arrangement of the general character
we desired. My own feeling is that such a practical arrangement as
is now suggested might in the long run be far preferable to mere
undertakings which would be probably indefinitely delayed through
political differences in the United States, and which might add
little in the long run to the obligations already resting upon the
United States and ourselves as members of the United Nations.

2. In a word, I think it now looks practically certain that we
will get an arrangement which will be a crushing answer to those
in Australia who would give away control or use of Australian
territories without getting anything in return. The United States
would not respect us if we were prepared to do that. The truth is
that we are one of the leading Nations outside of the major powers
themselves. The United States is treating us in that way, and
Australia's self-respect as well as her vital defence interests in
British Commonwealth would be assisted by the new proposal. No
question of finance for upkeep of facilities has been raised by
me, but my idea is that if Bevin agrees on the general principle
we should, subject to your approval, refer the detailed terms of
use for conversations amongst the technical experts, Naval or
financial.

3. Frankly, I am surprised, but also delighted at the turn in the
negotiations and I feel we owe a great deal to Admiral Nimitz who
is a great friend of Australia.