JOINT INTELLIGENCE ORGANISATION

It has not been possible to reply earlier to your letter of 15th
August owing to various other matters, including attendance at the
recent Conference on the Japanese Peace Treaty.

An Alternative Plan
2. I would refer to the following passage in your letter:-

'It is true that, at the Prime Ministers' Conference at London, it
was agreed that we should move forward along the lines you are
suggesting. Since that time, however, there have been remarkable,
and even dramatic, changes in international affairs, and, in
particular, in British Commonwealth relations. The inclusion of
two new dominions in India and of Ceylon and Burma in the British
Commonwealth Organisation is sufficient reason for reconsidering
British Commonwealth defence arrangements.'

3. Viewing the international position from the defence aspect, I
would say that the Government's recent statement on Defence policy
fully confirms the importance of proceeding with this project as
originally approved.

4. I do not understand what bearing the creation of the Dominions
in India, Pakistan, Burma and Ceylon, has on this proposal, beyond
the general aspect of requiring co-operation in British
Commonwealth Defence to be established between a greater number of
parties than previously.

5. Your statement about an independent intelligence organisation
indicates a lack of knowledge of the evolution of the development
of the sovereign control of Australian Defence Policy concurrently
with the development of measures for greater co-operation in
British Commonwealth Defence. This Policy dates from the
establishment of a Royal Australian Navy and an Australian Citizen
Army in 1910, and is too long a story to be traversed in a letter.

However, I enclose a memorandum on Co-operation in British
Commonwealth Defence which received the endorsement of War Cabinet
in December 1945, and which commences from the Imperial Conference
of 1923.

6. To bring the enclosure up to date, it is necessary to include
the statement by the Prime Minister in London in 1946 that
Australia must take a greater share in the burden of British
Commonwealth defence in the Pacific, and that the responsibility
for the development of regional defence in the Pacific must be
assigned to the Australian Government Machinery. To provide
liaison between the Australian Defence Machinery and that of the
other parts of the Empire, invitations have been extended to the
United Kingdom, Canada, New Zealand, South Africa, India and
Pakistan, to accredit Service Liaison Officers to the Defence
Department. Consideration will no doubt be given later to
extending similar invitations to Burma and Ceylon when the
question of the mutual relation of defence measures arises. The
trend of Australian Defence Policy and the machinery for its
administrative control has always been, and still is, in full
accord with the constitutional considerations in British
Commonwealth relations to which you refer.

7. In accordance with the Prime Minister's statement to undertake
a greater commitment in British Commonwealth Defence in the
Pacific, it was agreed that Australia would establish a Joint
Intelligence Bureau for the Pacific Area. It is part of the
Australian Government Machinery and will be entirely controlled by
Australia. The area covered by its activities does not embrace
India, Pakistan, Burma or Ceylon, and I do not see how they come
into the picture.

8. The Defence Signals Bureau is a Centre in Melbourne, and a
series of Intercept and Direction Finding Stations which are part
of the British Commonwealth Global Organisation, of which the main
Centre is in London. With our limited resources, it could not
function on any other basis, and with the mutual exchange of
information, we will get the benefits of the whole organisation.

It will be a self-contained unit so far as the main tasks on which
it is engaged, are concerned. It could be expanded rapidly in an
emergency to take the work of another Centre, if needed. [1]

9. It is noted that your Department would find the greatest
difficulty in fully cooperating in a joint scheme as at present
proposed. The primary consideration in this scheme is the defence
and security of Australia and the British Commonwealth. The
importance of intelligence organised on these lines was
demonstrated during the war to be vital to victory, and it is a
matter for decision, in the last resort, by those who are
responsible to the Australian people for their security.

Scope of the Joint Intelligence Bureau
10. My comments are:-

(a) We have already made it clear that the Joint Intelligence
Bureau is not to be a political reporting agency, that it will not
disseminate political intelligence, and that political
appreciations are not within its province; further, that we rely
on External Affairs to supply the Joint Intelligence Bureau with
such information on current political developments as it requires.

Presumably, it is the function and custom of External Affairs to
keep other Departments informed, as necessary, of current overseas
political developments, and surely there can be no 'great danger'
in this.

(b) It is not the function or intention of the Joint Intelligence
Organisation to inform other members of the British Commonwealth
of 'our own judgment of current political developments in
countries in this area'. The only political information contained
in Joint Intelligence Bureau publications will be in respect of
aspects of constitutional and political structure of various
countries, some knowledge of which is necessary, for military
purposes. This information is not secret, and we have already said
we look to External Affairs to produce it for us.

Instructions and Regulations
11. As Permanent Head of the Defence Department, it seemed
reasonable to me to comply with the formalities relating to
security, if I wanted information about the organisation and its
work, and I did so. [2] The Instructions and Regulations are
explanatory and general instructions and regulations, to ensure
the security of Signal Intelligence. From my experience in the
requirements of safeguarding secret information, I consider them
reasonable, and they are being reviewed for Australian
application. It seems obvious: that we can only share in the
results of this world organisation if we agree to be bound by the
common security principles designed to protect the existence and
source of Signal Intelligence.

Communications
12. From your comments, it would appear that you have the
impression that the Joint Intelligence Bureau will be entirely
pre-occupied with current political reporting, which is not its
function. The great bulk of material we expect to get from British
sources will deal with aspects of Military Geography, Topography,
Ports, Harbours, Airfields, Communications, etc.

13. As regards means of communication, I cannot comment on the
need of External Affairs for its own system of communications,
which is entirely another matter. It is pointed out, in relation
to Signal Intelligence communications, that:-

(a) Signal Intelligence is essentially a specialised Signal
Organisation with a directing and processing centre.

(b) [3] It would not be practicable to use an Australian
governmental system for this purpose.

(c) The Signal Intelligence Organisation is not setting up a new
and independent system of overseas radio communications, as you
seem to imply. It will use available groupage or channels on
existing or projected Empire Service circuits.

(d) I cannot agree that a decision on the Signal Intelligence
Organisation can or should await a review of governmental
communications, which is another matter.

Location
14. An intelligence organisation exists as an essential source of
information for those responsible for planning in peace and for
the control of operations in war. Since the Defence and Service
Departments are in Melbourne, the intelligence organisation must
be there. As the Departments to which you refer are in Canberra,
it would negate the primary purpose and use of the intelligence
organisation to locate it in Canberra, to be alongside Departments
which are sources of intelligence information. While it is obvious
that it would be better for all concerned to be located in the one
place, the fact is that they are not.

General Comment
15. I would refer to the following passage in your letter:-

'We are entering into a phase in international relations when, for
security reasons, we must pursue positive policies, and, in my
view, the proposals as put for-ward will embarrass the Government
in doing this.'
I know of no more positive policy that the Government is pursuing
for security reasons, than its recently announced Defence Policy,
of which the Joint Intelligence Organisation is an important and
integral part. You do not offer any explanation as to how it will
embarrass the Government in any other direction. I am afraid that
you have not given sufficient weight to the fact that the Joint
intelligence Organisation is concerned with military intelligence
and not political intelligence. Your fear that it will intrude
into the latter field, is, in my opinion, groundless.