Your 122. [1] Pacific Bases.

We have consistently raised objection to any proposals such as
those put forward by the United States authorities involving
surrender of the control over any British Pacific islands,
including the cession of the share of the Condominium over Canton
and Enderbury. We have always regarded United States claims to
sovereignty in the disputed islands as frivolous, and feel that
they should not be allowed to use their doubtful claims as
bargaining points.

2. At the same time we are reluctant to abandon entirely the idea
that a regional security arrangement for the South and South-West
Pacific area should be worked out in co-operation with the United
States.

3. It seems, however, that there is at present little immediate
prospect of achieving any such regional scheme as that we
envisaged in view of lessening importance attached apparently by
the United States to regional defence arrangements in the South
Pacific, chiefly as a result of their establishment in the former
Japanese Mandates. In the circumstances, we concur in the United
Kingdom proposals, subject to the considerations in paragraph 1
and 2 above and provided also that Australia's civil and military
aviation rights in Canton and Christmas Islands are fully
safeguarded at all times, including time of war in which U.S.A. is
Neutral.

4. The question of the administration of Canton is a matter of
primary importance to Australia in view of the Australian
Government's operation of airlines, and we take it we shall have
an opportunity of discussing this.

5. We would suggest adding request for rights of access to air
staging facilities in Guam as well as in Philippines.